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Accounting - process of identifying, measuring, and reporting financial information of an entity Accounting Equation - assets = liabilities + equity Accounts Payable - money owed to creditors, vendors, etc. Accounts Receivable - money owed to a business, i.e.: credit sales Accrual Accounting - a method in which income is recorded when it is earned and expenses are recorded when they are incurred Asset - property with a cash value that is owned by a business or individual Balance Sheet - summary of a company's financial status, including assets, liabilities, and equity Bookkeeping - recording financial information Cash-Basis Accounting - a method in which income and expenses are recorded when they are paid. Chart of Accounts - a listing of a company's accounts and their corresponding numbers Cost Accounting - a type of accounting that focuses on recording, defining, and reporting costs associated with specific operating functions Credit - an account entry with a negative value for assets, and positive value for liabilities and equity. Debit - an account entry with a positive value for assets, and negative value for liabilities and equity. Depreciation - recognizing the decrease in the value of an asset due to age and use Double-Entry Bookkeeping - system of accounting in which every transaction has a corresponding positive and negative entry (debits and credits) Equity - money owed to the owner or owners of a company, also known as "owner's equity" Financial Accounting - accounting focused on reporting an entity's activities to an external party; ie: shareholders Financial Statement - a record containing the balance sheet and the income statement Fixed Asset - long-term tangible property; building, land, computers, etc. General Ledger - a record of all financial transactions within an entity Income Statement - a summary of income and expenses Job Costing - system of tracking costs associated with a job or project (labor, equipment, etc) and comparing with forecasted costs Journal - a record where transactions are recorded, also known as an "account" Liability - money owed to creditors, vendors, etc Liquid Asset - cash or other property that can be easily converted to cash Loan - money borrowed from a lender and usually repaid with interest Net Income - money remaining after all expenses and taxes have been paid Non-operating Income - income generated from non-recurring transactions; ie: sale of an old building Note - a written agreement to repay borrowed money; sometimes used in place of "loan" Operating Income - income generated from regular business operations Payroll - a list of employees and their wages Profit - see "net income" Profit/Loss Statement - see "income statement" Revenue - total income before expenses. Single-Entry Bookkeeping - system of accounting in which transactions are entered into one account و انتظرالمزيد بأذن الله وسئل الله التوفيق للجميع

كنت أقرا في عنوان كتاب جاء كلاتي : People The New Asset of Balance Sheet . في بداية الأمر لم يعجبني الموضوع ولكن فكرت لو انا كنت اصل في الشركة هل سوف اكون من ضمن الأصول المعنوية او الغير معنوية " أصول ملموسه او غير ملموسه وهل انا مستهلك ام غير مستهلك مع أن الأنسان بطبيعته التي خلقها الله عليه له نهاية ومصيره الموت يعني Slavage life للأصل موجودة في الأنسان هل يتم معاملتي مثل software حيث ان طبيعة عملي سوف تكون خدمات وانا ممكن أحقق إيراد للشركة من سوف يدخل ضمن التقييم من الموظفين ضمن الأصول الثابتة لشركة وما هو أساس التقييم هل هو الراتب الشهري ×مضروب في السنة وما هو سعر التكلفة التي يتوجب إظهار الموظف فيها في الميزانية - ما هي هو المقياس الذي سوف يعتبر به الموظف ضمن أصول الشركة Human Asset هل هو المسمى الوظيفي - هل هو الأيراد او المبيعات التي يحققها هل هو حجم وتقييم الموظف على نطاق الدولة وهل سوف يتم عمل مخصص لي في النهاية . لا تستغرب هذا هناك إشخاص الشركات قائمة عليهم ولو تركوا لنهارت الشركات من بائعين مدراء وموظفين وحيث ان الكتاب جاء من People – The New Asset on the Balance Sheet Joseph A. DiVanna and Jay Rogers إذا كان هذا تصور هؤلاء Humand Asset ماذا نقول نحن على كل بعد ما اقر الكتاب هذا واقوم بتلخيصه سوف نكمل ويكون لنا في الحديث بقية .... فكر معي وقول ما رأيك في الموضوع

السلام عليكم شحااالكم ؟؟ ابي مسااعدتكم .... عندي برووجكت ولازم اختااار شركتين وانا مش عااارفه اختااار الشركااات فأتمنى حد يقرأ البرووجكت واعطوني اقترااحاتكم شون الشركتين اللي اختارهن ... لو سمحت ضرووووووري ... تسليم البرووجكت الاسبووع القادم Project No. (1) Task: Search the internet for financial reports of two firms, copy and paste their Income Statements (I.S.), Balance Sheets (B.S.) and related notes in your word document project report. You are asked to discuss, professionally, the main differences between the two firms in the structure of their I.S. and B.S. In choosing the two firms involved, you are can select one of the following options: 1. One manufacturing firm (e.g. Mercedes Bens) and another merchandising firm (e.g. GAP). 2. One international manufacturing firm and another local/regional manufacturing firm operating in the same industry type. The length of discussion, excluding the financial statements, should not exceed 3000 words. Submission deadline: 15th October 2008 Assessment of group project 1. Each group member gets the same mark if all the group members participate equally, but if the group reports a malingerer, he or she gets a yellow card and his/her mark is reduced by 10%. If there is no improvement, the student (malingerer) will get a red card which means a zero mark. 2. The department has zero tolerance towards plagiarism. Always refer to your source of information in citation. Also, If a group’s report is taken from another group’s report, both groups members will be awarded ZERO. Assessment criteria are presented in the following marking sheet. You must print it off, after completing students’ names and ID nos., and attach it as a cover sheet to your report.

http://www.ziddu.com/download/2211015/June2003.zip.html http://www.ziddu.com/download/2210991/balance.zip.html http://www.ziddu.com/download/2210984/control.zip.html control.zip balance.zip June2003.zip

لدينا المسألة التالية أرجوا من المتخصصين مساعدتي في فهمها و حلها Yasmeen has been recently appointed as accounting manager in the famous Abou Sina Pharmaceutical Company, a small family business run by Abou Sina himself. Its main activity is the distribution of pharmaceuticals acting as a liaison between factories and pharmacies. Yasmeen’s first assignment is to prepare the budget for the last four months of 2008. The usual form used for the cash flow budget is shown below but you can amend it as needed or even use you own if you prefer Cash Budget Sep Oct Nov Dec Estimated Cash Receipts From Credit Customers From Cash Sales Proceeds from fixed asset disposals = Total Cash Receipts Estimated Cash Payments Suppliers Wages and Salaries Fixed Asset Purchases Rent and Rates Other Overheads Loan Repayments = Total Cash Payments = Net Surplus (or deficit) Opening Cash Balance 1.100.000 = Closing Cash Balance After going through the files of her predecessors and after some discussions with her colleagues, Yasmeen was able to collect the following information, which she considers reliable enough: * Expected Sales: 1.000.000 SYP every month except September (Ramadan) when the sales doubles. Usually 40% of sales are on cash basis and the usual credit terms are 30 days. Except in Ramadan, where 75% of sales are cash! * The company puts a 35% mark-up on its purchases from its suppliers, who insist on a 25% downpayment when placing the order one month ahead of delivery, and the balance 75% is payable on delivery. It is the company’s policy to keep at all time in stock 500.000 SYP worth of goods (selling price). * The owner, Mr. Abou Sina, has a very beautiful secretary and rumour has it that Abou Sina is planning to leave his wife Im Sina and only son, Sina, and marry his secretary in October just after the Fitr Holidays. He is planning to buy her a solitaire for 550.000 SYP as a wedding present. * It is also expected that one of the used vans of the company be sold in November for 600.000 SYP and replaced in December with a new one paid cash 1.500.000 SYP * The monthly salaries of all the employees in the firm, including the very beautiful secretary, are 150.000 SYP and Abou Sina usually gives an end-of-year bonus equal to the monthly salary to all the employees, including the very beautiful secretary. The monthly rent is 20.000 SYP but it is paid every three months. The last payment was on June 15. * A loan from the bank for 1.250.000 SYP is due on Nov 23. * On average, Abou Sina’s expenses are about 30.000 SYP per month * In last year’s financial reports, it is stated that the depreciation of the machines and equipment is 120.000 SYP per annum. 1- Can you help Yasmeen prepare the budget on time, bearing in mind that some of the information she collected is not really necessary to prepare that budget but is just office gossip!!! 2- Also please prepare the budgeted income statement for the same period. 3- Write what Yasmeen could have written to her boss in the form of an office memo that would accompany the prepared budgets including her notes and comments on both budgets and what could be in order to minimize the risk of being unable to pay the liabilities on time. ارجوا أرسال الحلول الى mhdramadan@gmail.com

أرجوا المساعدة في حلها من أهل الأختصاص Yasmeen has been recently appointed as accounting manager in the famous Abou Sina Pharmaceutical Company, a small family business run by Abou Sina himself. Its main activity is the distribution of pharmaceuticals acting as a liaison between factories and pharmacies. Yasmeen’s first assignment is to prepare the budget for the last four months of 2008. The usual form used for the cash flow budget is shown below but you can amend it as needed or even use you own if you prefer Cash Budget Sep Oct Nov Dec Estimated Cash Receipts From Credit Customers From Cash Sales Proceeds from fixed asset disposals = Total Cash Receipts Estimated Cash Payments Suppliers Wages and Salaries Fixed Asset Purchases Rent and Rates Other Overheads Loan Repayments = Total Cash Payments = Net Surplus (or deficit) Opening Cash Balance 1.100.000 = Closing Cash Balance After going through the files of her predecessors and after some discussions with her colleagues, Yasmeen was able to collect the following information, which she considers reliable enough: * Expected Sales: 1.000.000 SYP every month except September (Ramadan) when the sales doubles. Usually 40% of sales are on cash basis and the usual credit terms are 30 days. Except in Ramadan, where 75% of sales are cash! * The company puts a 35% mark-up on its purchases from its suppliers, who insist on a 25% downpayment when placing the order one month ahead of delivery, and the balance 75% is payable on delivery. It is the company’s policy to keep at all time in stock 500.000 SYP worth of goods (selling price). * The owner, Mr. Abou Sina, has a very beautiful secretary and rumour has it that Abou Sina is planning to leave his wife Im Sina and only son, Sina, and marry his secretary in October just after the Fitr Holidays. He is planning to buy her a solitaire for 550.000 SYP as a wedding present. * It is also expected that one of the used vans of the company be sold in November for 600.000 SYP and replaced in December with a new one paid cash 1.500.000 SYP * The monthly salaries of all the employees in the firm, including the very beautiful secretary, are 150.000 SYP and Abou Sina usually gives an end-of-year bonus equal to the monthly salary to all the employees, including the very beautiful secretary. The monthly rent is 20.000 SYP but it is paid every three months. The last payment was on June 15. * A loan from the bank for 1.250.000 SYP is due on Nov 23. * On average, Abou Sina’s expenses are about 30.000 SYP per month * In last year’s financial reports, it is stated that the depreciation of the machines and equipment is 120.000 SYP per annum. 1- Can you help Yasmeen prepare the budget on time, bearing in mind that some of the information she collected is not really necessary to prepare that budget but is just office gossip!!! 2- Also please prepare the budgeted income statement for the same period. 3- Write what Yasmeen could have written to her boss in the form of an office memo that would accompany the prepared budgets including her notes and comments on both budgets and what could be in order to minimize the risk of being unable to pay the liabilities on time. أرجوا أرسال الحلول الى mhdramadan@gmail.com

أرجوا منكم مساعدة على حل مثل هذه المسأل أو أرشادي لموقع يمكن فهم و حل مثل هذه المسألة Yasmeen has been recently appointed as accounting manager in the famous Abou Sina Pharmaceutical Company, a small family business run by Abou Sina himself. Its main activity is the distribution of pharmaceuticals acting as a liaison between factories and pharmacies. Yasmeen’s first assignment is to prepare the budget for the last four months of 2008. The usual form used for the cash flow budget is shown below but you can amend it as needed or even use you own if you prefer Cash Budget Sep Oct Nov Dec Estimated Cash Receipts From Credit Customers From Cash Sales Proceeds from fixed asset disposals = Total Cash Receipts Estimated Cash Payments Suppliers Wages and Salaries Fixed Asset Purchases Rent and Rates Other Overheads Loan Repayments = Total Cash Payments = Net Surplus (or deficit) Opening Cash Balance 1.100.000 = Closing Cash Balance After going through the files of her predecessors and after some discussions with her colleagues, Yasmeen was able to collect the following information, which she considers reliable enough: * Expected Sales: 1.000.000 SYP every month except September (Ramadan) when the sales doubles. Usually 40% of sales are on cash basis and the usual credit terms are 30 days. Except in Ramadan, where 75% of sales are cash! * The company puts a 35% mark-up on its purchases from its suppliers, who insist on a 25% downpayment when placing the order one month ahead of delivery, and the balance 75% is payable on delivery. It is the company’s policy to keep at all time in stock 500.000 SYP worth of goods (selling price). * The owner, Mr. Abou Sina, has a very beautiful secretary and rumour has it that Abou Sina is planning to leave his wife Im Sina and only son, Sina, and marry his secretary in October just after the Fitr Holidays. He is planning to buy her a solitaire for 550.000 SYP as a wedding present. * It is also expected that one of the used vans of the company be sold in November for 600.000 SYP and replaced in December with a new one paid cash 1.500.000 SYP * The monthly salaries of all the employees in the firm, including the very beautiful secretary, are 150.000 SYP and Abou Sina usually gives an end-of-year bonus equal to the monthly salary to all the employees, including the very beautiful secretary. The monthly rent is 20.000 SYP but it is paid every three months. The last payment was on June 15. * A loan from the bank for 1.250.000 SYP is due on Nov 23. * On average, Abou Sina’s expenses are about 30.000 SYP per month * In last year’s financial reports, it is stated that the depreciation of the machines and equipment is 120.000 SYP per annum. 1- Can you help Yasmeen prepare the budget on time, bearing in mind that some of the information she collected is not really necessary to prepare that budget but is just office gossip!!! 2- Also please prepare the budgeted income statement for the same period. 3- Write what Yasmeen could have written to her boss in the form of an office memo that would accompany the prepared budgets including her notes and comments on both budgets and what could be in order to minimize the risk of being unable to pay the liabilities on time.

سؤالي هو: the cashbook of abusiness shows a balance of $1125 over drawn at 31 may 2006. it is subsequently discovered that a direct debit of $60 has not been recorded in the cashbook and that a dishonoured cheque receipt of $140 has been entered on the wrong side of the cashbook. outstanding cheqes at 31 May2006 amounted to $540 what is the balance per the bank statement as at 31 May 2006 شكرا جزيلا لكم اريد الحل مع الشرح.. واريد توضيح bank reconciliation بالشرح

السلام عليكم ورحمة الله وبركاته مطلوب مني تحليل قوائم شركة ومن ضمن المطلوب هو : Calculate the projected (pro forma) Income Statement and Balance Sheet وأيضاً: ) Forecast future performance of the firm. الرجاء توضيح هاتان النقطتان وماذا تعني

السلام عليكم أخوانى وزملائى يسرنى ويشرفنى ان اكون عضوا فى هذا المنتدى الموقر لعل الله ان يعم الفائده علينا جميعا فى البدايه اعرفكم بنفسي انا يوسف الفهد وعمرى 24 عاما خريج حديث وتخصصي هو المحاسبه باللغه الانجليزيه ولم اعمل بالمحاسبه بشكل عملي . مبدئيا لدى استفسار اتمنى ان يساعدنى احد فيه : انا مقبل على اختبار وظيفى بخصوص المحاسبه وحاليا استعد لهذا الاختبار وأسئلتى هى : (1)مالمقصود بالــReserves & Provisins ?? واين توجد وباى قائمه ماليه ؟؟ (2) لماذا يجب ان تكون الميزانيه العموميه Balance sheet متساويه فى طرفيها دائما ؟؟ (3)ما الصيغه الاصح والاكثر شيوعا واستخداما لقائمه الربح والخساره Income statement ؟؟ واذا اى شخص لديه فكره عن نوعيه الاسئله التى تسئل لشخص لم يعمل بالمحاسبه (عمليا) اى ليس لديه خبره بمجالها ان يزودنى بفكرته عن هذه الاسئله وجعله الله فى ميزان حسناتكم تقبلوا تحيات اخوكم يوسف الفهد.

الاخوة الاعزاء الف سلام وتحية ان اكثر مايؤرقني كمحاسب هذة الايام ونحن نستشرف بداية عام مالي جديد مايسمي بقائمة المركز المالي والتي قمت باعدادها كماهو متعارف علية سنويا وفق الاسس والمعايير المطلوبة ولكن..... هل قائمة المركز المالي فعلا هي قائمة تدل علي المركز المالي؟ وهل الاسم الاجنبي لها BALANCE SHEETيعني المركز المالي؟ اعتقد غير ذلك...... اني احس ان قائمة المركز المالي لاتمثل المركز المالي الحقيقي للشركة الا كارقام فقط واكثر مايزيد حيرتي هو الاتجاة العالمي نحو قائمة التدفق النقدي CASH FLOWوالتي يعتبرها الكثير من المراقبين بانها الاهم والاجدي.

Learning objectives On completion of this chapter you will be able to: · explain and appraise the meaning of an income statement which identifies Discontinued operations, prior period adjustments and non-current assets held For resale • explain how adjustments are made for changes in accounting policy and prior period errors • disclose assets 'held for sale' · present information regarding discontinued operations • identify how companies provide a segmental analysis of their results · explain the purpose of segmental information and appraise its usefulness 1 lAS 8: Accounting policies, changes in accounting Estimates and errors Changes in accounting policy and prior period errors should be dealt with retrospectively . Changes in accounting estimates should be dealt with prospectively. 1.1 Accounting policies Accounting policies are the specific principles. bases conventions. rules and practices adopted by an entity in preparing and presenting financial statements Accounting pclicier determined pv applying the relevant IFRS or IFRIC and considering any relevant implementation Guidance issued bythe IASB forthat lFFlS’lFRlC. Vi/here there is no appucahle IFRS or lFl;ilC management should use its judgement in developing and applying an accounting policy that results in information that is relevant and reliable. Management should refer to. (al The requirements and guidance in lFRSs and lFRlCs dealing with similar and related issues ‘ lb) The definitions, recognition criteria and measurement concepts for assets, liabilities and expenses in the Framework Management may also consider the most recent pronouncements of other standard setting bodies that use ¤ s ·**lar conceptual framework to develop standards. other accounting literature and accepted industry practices if these do not conflict with the sources above. An entity must select and apply its accounting policies for a period consistently for similar transactions, other events and conditions, unless an lFFtS or an lFltlC specifically requires or permits categorisation of items for which ditlereot policies may he appropriate ll an lFFiS or an lFRlC requires or permits categorisation ol items, an appropriate accounting policy must be selected and applied consistently to each category. 1.2 Changes in accounting policies The same accounting policies are usually adopted from period to period, to allow users to analyse trends over time in profit, cash flows and financial position. Changes in accounting policy will therefore be rare and should be made only if required by one of three things. (a) By statute ( By an accounting standard setting body © if the change will result in a more appropriate presentation of events or transactions in the financial statements of the entity The standard highlights two types of event which do not constitute changes in accounting policy. (a) Adopting an accounting policy for a new type of transaction or event not dealt with previously by the entity. ( Adopting a new accounting policy for a transaction or event which has not occurred in the past or which was not material. in the case of tangible non-current assets, if a policy of revaluation is adopted for the first time then this is treated, not as a change of accounting policy under IAS 8, but as a revaluation under IAS 16 Property, plant and equipment (see Chapter 8). The following paragraphs do not therefore apply to a change in policy to adopt revaluations. IAS 8 requires retrospective application, unless it is impracticable to determine the cumulative amount of charge. Any resulting adjustment should be reported as an adjustment to the opening balance of retained earnings. Comparative information should be restated unless it is impracticable to do so. This means that all comparative information must be restated as if the new policy had always been in force, with amounts relating to earlier periods reflected in an adjustment to opening reserves of the earliest period presented. Prospective application is allowed only when it is impracticable to determine the cumulative effect of the change. Certain disclosures are required when a change in accounting policy has a material effect on the current period or any prior period presented, or when it may have a material effect in subsequent periods. (a) Reasons for the change ( Amount of the adjustment for the current period and for each period presented © Amount of the adjustment relating to periods prior to those included in the comparative information (d) The fact that comparative information has been restated or that it is lmpracticable to do so An entity should also disclose information relevant to assessing the impact of new IFRS on the financial statements where these have not yet come into force. 1.3 Changes in accounting estimates Estimates arise in relation to business activities because of the uncertainties inhcrent within them. Judgements are made based on the most up to date information and the use of such estimates is a necessary part of the preparation of financial statements. it does not undermine their reliability. Here are some examples of accounting estimates. (a) A necessary bad debt allowance ( Useful lives of depreciable assets © Allowance for obsolescence of inventory The rule here is that the effect of a change in an accounting estimate should be included in the determination of net profit or loss in one of: (a) The period of the change, if the change affects that period only ( The period of the change and future periods, if the change affects both Changes may occur in the circumstances which were in force at the time the estimate was calculated or perhaps additional information or subsequent developments have come to light. An example of a change in accounting estimate which affects only the current period is the bad debt estimate. However, a revision in the life over which an asset is depreciated would affect both the current and future periods, in the amount of the depreciation expense. Reasonably enough, the effect of a change in an accounting estimate should be included in the same income statement classification as was used previously for the estimate. This rule helps to ensure consistency between the financial statements of different periods. The materiality of the change is also relevant. The nature and amount of a change in an accounting estimate that has a material effect in the current period (or which is expected to have a material effect in subsequent periods) should be disclosed. If it is not possible to quantify the amount, this impracticability should be disclosed. 1.4 Errors Errors discovered during a current period which relate to a prior period may arise through: (a) Mathematical mistakes ( Mistakes in the application of accounting policies © Misinterpretation of facts (d) Oversights (e) Fraud most of the time these errors can be corrected through net profit or loss for the current period. Where they are material prior period errors. however, this is not appropriate. The standard considers two possible treatments. Prior period errors: correct retrospectively. This involves: (a) Either restatrng the comparative amounts for the prior period(s) in which the error occurred. ( Or, when the error occurred before the earliest prior period presented. restating the opening balances of assets abilities and equity for that period so that the financial statements are presented as if the error had never occurred. Only where it is impracticable to determine the cumulative effect of an error on prior periods can an entity correct an error prospectively. Various disclosures are required. providing information about the nature of the error and its effect on the financial results. 2 IFRS 5: Non-current assets held for sale and discontinued operations IFRS 5 requires assets 'held for sale` to be presented separately on the face of the balance sheet. 2.1 Background IFRS 5 is the result of a short-term convergence project with the US Financial Accounting Standards Board (FASB). IFRS 5 requires assets and groups of assets that are ‘held for sale’ to be presented separately on the face of the balance sheet and the results of discontinued operations to be presented separately in the income statement. This is required so that users of financial statements will be better able to make projections about the financial position, profits and cash flows of the entity. IFRS 5 does not apply to certain assets covered by other accounting standards including: • Deferred tax assets (IAS 12) • Investment properties accounted for in accordance with the fair value model (IAS 40) 2.2 Classification of assets held for sale A non-current asset (or disposal group) should be classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. A number of detailed criteria must be met: (a) The asset must be available for immediate sale in its present condition. ( Its sale must be highly probable (ie , significantly more likely than not). Disposal group: a group of assets to be disposed of. By sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. I (in practice a disposal group could be a subsidiary. a cash-generating unit or a single operation within an entity.) For the sale to be highly probable, the following must apply. (a) Management must be committed to a plan to sell the asset ( There must be an active programme to locate a buyer. © The asset must be marketed for sale at a price that is reasonable in relation to its current fair value. · (d) The sale should be expected to take place within one year from the date of classification. (e) It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. An asset (or disposal group) can still be classified as held for sale, even if the sale has not actually taken place within one year. However, the delay must have been caused by events or circumstances beyond the entity's control and there must be sufficient evidence that the entity is still committed to sell the asset or disposal group. Otherwise the entity must cease to classify the asset as held for sale lf an entity acquires a disposal group (eg . a subsidiary) exclusively with a view to its subsequent disposal it can classify the asset as held for sale only if the sale is expected to take place within one year and it is highly probable that all the other criteria will be met within a short time (normally three months). An asset that is to be abandoned should not be classified as held for sale. This is because its carrying amount will be recovered principally through continuing use. However, a disposal group to be abandoned may meet the definition of a discontinued operation and therefore separate disclosure may be required (see below) On l December 20x3. a company became committed to a plan to sell a manufacturing facility and has already found a cotential buyer. The company does not intend to discontinue the operations currently carried out in the facility. At 31 December 20X3 there is a backlog of uncompleted customer orders.The company will not be able to transfer the facility to the buyer until after it ceases to operate the facility and has eliminated the backlog of uncompleted customer orders. This is not expected to occur until spring.20X4. Required Can the manufacturing facility be classified as 'held for sale‘ at 31 December 2OX3? 2.3 Measurement of assets held for sale · Fair value: the amount for which an asset could be exchanged, or a liability settled, between knowleggeable,willing parties in an arm’s length transaction. • Costs to sell: the incremental costs directly attributable to the disposal of an asset (or disposal group). excluding finance costs and income tax expense. • Recoverable amount: the higher of an asset’s fair value less costs to sell and its value in use. • Value in use: the present value of estimated future cash flows expected to arise from the Continuing use of an asset and from its disposal at the end of its useful life. A non-current asset (or disposal group) that is held for sale should be measured at the lower of its carrying amount and fair value less costs to sell. Fair value less costs to sell is equivalent to net realisable value. An impairment loss should be recognised where fair value less costs to sell is lower than carrying amount. (see Chaptar8) Non-current assets held for sale should not be depreciated, even if they are still being used by the entity A non-current assets (or disposal group) that is no longer classified as held for sale (for example, because the sale has not taken place within a one year) is measured at the lower of: (a) its carrying amount before it was classified as held for sale, adjusted for any depreciation that would have been charged had the asset not been held for sale ( its recoverable amount at the date of the decision not to sell 2.4 Presentation of a non-current asset or disposal group classified as held for sale Non-current assets and disposal groups classified as held for sale should be presented separately from other assets in the balance sheet The liabilities of a disposal group should be presented separately from other liabilities in IME balance sheet.

مساهمة في الموضوع المطروح مني اليوم ابدأ ب multiple currencu accounting Prof. Timo Salm0i A Comparative Review of the Finnish Expenditure-Revenue Accounting Based on a Working Paper 78-2. European Institute for Advanced Studies in Management, Brussels, January 1978. Rewritten for electronic publication in 1993. Technically revised in 1996. ISBN 951-683-724-7. Copyright © 1978 and 1996 by Timo Salmi. CONTENTS  Abstract 1. Purpose 2. Accounting for the Entire Life-Span of the Firm 21. Fundamental Concepts 211. Adoption of the Total Period 212. Expenditures, Revenues, and Financing 213. Determination of Total Profit 214. Entity, Money Measurement and Cost Conventions 215. Summary 22. The Accounting Process 221. Expenditure, Revenue, and Financing Accounts 222. Cash Basis 223. Accrual Basis 3. Accounting for Segments of the Total Period 21. Segmenting a Total Period 311. Reason for Segmenting 312. The Congruence Principle 313. Discussion on the Causal Relation between Annual and Total Profits 22. Principles of Annual Income Determination 321. Annual Closing of Accounts 322. Expenses and Unexpired Expenditures 323. The Matching Convention 23. Special Topics 331. Priority Order of Matching 332. Realization Depreciation 24. Treatment of Expenditure, Revenue, and Financial Accounts in Closing 4. Recapitulation  Footnotes and References Please use the following reference to this publication: Salmi, T. (1993), "A Comparative Review of the Finnish Expenditure-Revenue Accounting [online]", available from World Wide Web: <URL:http://www.uwasa.fi/~ts/comp/comp.html>. ISBN 951-683-724-7. Timo Salmi Professor of Accounting and Finance A Comparative Review of the Finnish Expenditure-Revenue Accounting ABSTRACT: In Finland the accounting theory put forward by Professor Martti Saario (in 1958, 1959, and partly 1945) is dominant in accounting legislation, teaching and research. This paper reviews the theory, states the unstated economic assumptions on which the theory must be based, and compares the accounting conventions inherent in the application of this theory with the conventions in the generally accepted accounting principles (GAAP). At the same time it is the purpose to subject this theory to an international forum, since this has not been done so far. KEY WORDS: Accounting theory; Accounting principles; Financial accounting; Accounting model; Finland Timo Salmi (1993), "A Comparative Review of the Finnish Expenditure-Revenue Accounting", published on the World Wide Web as http://www.uwasa.fi/~ts/comp/comp.html at the University of Vaasa, Finland. 1. Purpose Accounting has, aptly, often been called the language of business. General accounting concepts are used in communication between researchers in the accounting field in different countries. The accounting rules, conventions and practices as well as accounting legislation vary, however, in some degree from country to country. The concepts used in teaching financial accounting to business students may also differ in a fundamental manner. The purpose of this paper in the area of comparative accounting is to facilitate communication about Finnish accounting research and the concepts used in teaching financial accounting in Finland. This is done by reviewing the "expenditure-revenue-accounting" model applied in Finland. This accounting model is of general interest because it is an example of taking an unconventional approach to the going concern convention, and developing the accounting model starting from the income statement concepts rather than the internationally more common expansion from the balance sheet concepts. The expenditure-revenue accounting model as propounded in the Finnish language is attributed solely to late professor Martti Saario _1/. This accounting theory has been the dominant basis of financial accounting legislation and teaching in Finland. The the financial accounting practices based on the expenditure-revenue accounting theory resemble in many respects the accounting practices based on the American Generally accepted accounting principles, the GAAP. It will be assumed throughout this paper that the reader is reasonably familiar with the GAAP. This paper is a review of Professor Saario's accounting theory. The presentation is based on my own interpretation of expenditure-revenue accounting and GAAP. An attempt is made not to express any personal preferences concerning the choice of the accounting concepts. The evaluation of the potential merits or dismerits of Professor Saario's expenditure-revenue accounting as a background for financial accounting practices and teaching, as compared with accounting practices based on GAAP, will be the reader's. 2. Accounting for the Entire Life-Span of the Firm 21. Fundamental Concepts 211. Adoption of the Total Period Income determination is taken as the underlying purpose of expenditure-revenue accounting. This basic premise should continuously be borne in mind throughout this paper. The fundamental difference between the Finnish expenditure-revenue accounting and GAAP is discarding the going-concern convention in the former. _2/ Instead, the total period from the firm's foundation to its liquidation will first have to taken under observation in order to define the total profit for the entire life-span of the firm. 212. Expenditures, Revenues, and Financing In expenditure-revenue accounting the fundamental objective of the entrepreneur is taken to be earning a profit, because it provides the desired purchasing power. The objective of the business firm is assumed to be the same. In order to earn a profit the firm must commit expenditures as a prerequisite of revenues. Thus, in principle, there is a fundamental association between expenditures _3/ and revenues _4/. For the entire life-span of the firm the sum of the receipts exceeds the sum of the disbursements if the revenues for the total period exceed the expenditures, provided that distributions of profits have not exceeded the profit for the total period. Expenditures, however, precede corresponding revenues. It is this discrepancy in timing that gives rise to the need of outside financing. Two mutually exclusive, comprehensive sources of outside financing are defined. The first is paid-in capital from the owners. The second is debt. The life-span of the firm, i.e. the total period thus entails: 1. Acquiring outside financing a. paid-in capital from owners b. debt 2. Expenditures 3. Revenues 4. Repaying outside financing a. debt b. paid-in capital to owners Furthermore, the financial flows through the firm, as will be illustrated by Figure 1, include the distribution of profits among creditors, government, and owners; in other words interest, taxes, and dividends. 213. Determination of Total Profit The expenditure-revenue accounting approach was developed taking the total period under observation. When the going-concern convention is thus discarded and the total period from the firm's foundation to its liquidation is under observation, the matching problem automatically becomes solved and income determination trivial, in principle. For the total period all expenditures have to expire and become expenses, because no more revenues to match against exist, per definition, after the firm has been dissolved. Hence, the TOTAL income _5/ is the difference between the TOTAL revenues and TOTAL expenditures. The aim of expenditure-revenue accounting is solely the determination of income. The evaluation and further usage of the observed income is strictly separated from income determination, and is limited outside expenditure-revenue accounting. 214. Entity, Money Measurement and Cost Conventions Finnish accounting text-books introducing expenditure-revenue accounting usually elucidate financial accounting with the help of some version of Figure 1. Figure 1. The Financial and Material Flows through the Firm CAPITAL MARKET paid-in and debt capital : distribution : of profits : repayment -interest : : -taxes : : -dividends : +------+ (expen- ) : : (ditures) : : (revenues) payments +--------------+--+---------------+ payments for inputs ! : : ! from outputs {----------+- accounts {- cash {- accounts {-+-------------- ! payable receivable ! financial process ................................................................... ! production flow ! physical process ---------} ! ------------------------------} ! -----------------} physical ! ! physical output input flow +---------------------------------+ flow INPUT MARKET OUTPUT MARKET In accordance with the entity convention the firm in Figure 1 is the relevant entity. It acquires a set of "physical" inputs, transforms the inputs into outputs in the production process and sells the resultant outputs. This physical process is reflected in the financial process as depicted by Figure 1. Financial accounting (in our case expenditure-revenue accounting) is defined as a description of the financial process of the business entity under observation. Figure 1 emphasizes the central conceptual role assumed for cash in expenditure-revenue accounting. _6/ Money measurement convention is used in registering the flows of the financial process. This is natural because, per definition, monetary flows are under observation. The measurement of the flows of the financial process is made according to the (historical) cost convention (c.f. "stable dollar" assumption). Thus, in comparison with accounting based on the GAAP, no changes are made in entity, money measurement, or cost conventions in accounting based on the expenditure-revenue accounting model. 215. Summary To recapitulate, I denote r(i) = the i:th revenue observed from the financial process d(j) = the j:th expenditure observed from the financial process P = total income I = the total set of revenue indices J = the total set of expenditure indices then (1) P = sum r(i) - sum d(j) . icI jcJ 22. The Accounting Process 221. Expenditure, Revenue, and Financing Accounts Three sets of accounts are defined for recording purposes in expenditure-revenue accounting. They are 1. Financing accounts 2. Expenditure accounts (not "expense" accounts) 3. Revenue accounts All transactions arising in financial accounting for the firm can be recorded on accounts belonging to the above three categories. The following subcategorization of financing accounts can be used. • cash • receivables and payables • capital o debt capital o owners' capital o distribution of profits 222. Cash Basis For instructive reasons first consider the recording of transactions on cash basis. _7/ Figure 2 depicts the recording of the basic transactions on T-accounts. Figure 2. Recording Transactions . . . . . . . . . . . . . . . . Sources of cash . Sinks of cash . . . +-------------.--------------+ . : Financing . accounts : . : . : . Revenue : Capital . C a s h : Expenditure . accounts : accounts . + - : accounts . ========= : ========= . --------- : =========== 1a . ! : ! -----+----} ! : ! b . ! : ! -----+----} ! : ! 2 . ! : ! . ! ---------------} ! 3 . ! ------------+------+----} ! : ! 4a . ! : {-+------+------+-- : ! b . ! : {-+------+------+-- : ! . : ! +-------------.--------------+ ! : . : . : . . .:. . . . . . . . . . . . : : : : Total income : : ------------ : +------------------------!--} : {--!-------------------------+ ! As is seen in Figure 2, the total income is the difference of the balances of the (total) revenue accounts and expenditure accounts. All the rules needed for recording various transactions can be deduced from the following convention of expenditure-revenue accounting, which corresponds to the dual aspect convention of the GAAP. Every transaction is recorded as a debit and equal credit. An increase in cash is recorded as a debit on cash account. For example, it can be deduced with the help of Figure 2 that a revenue is credited on the relevant revenue account, whereas an expenditure is debited (charged) on the relevant expenditure account. The details of recording different transactions in accordance with the expenditure-revenue accounting model have naturally been described in great detail in Finnish accounting text-books. The position of the cash account in Figure 2 (and later in Figure 3) reflects the central conceptual role of cash. In expenditure-revenue accounting cash is used as the reference account instead of owners' equity, which is the reference account for accounting based on GAAP. It must be stressed, however, that this does not imply a suggestion for cash-flow accounting. The rules for recording transactions do not differ from GAAP rules, since the equation "assets = liabilities + owners' equity" can be derived as a corollary of the "debit equals credit, and increase in cash is a debit"- convention. Figure 2 shows that for closing purposes an additional account is needed outside the financing / expenditure / revenue accounts classification. Such additional accounts are called closing accounts. _8/ There are exactly two of them. One is the income statement ("total income" in Figure 2), the other is the balance sheet. When the total period is under observation, the balance sheet is not relevant, because in liquidation at the end of the total period the balance sheet becomes an empty set. Note that no distinction has yet been made between expenditures and expenses. 223. Accrual Basis Accrual basis is applied in the Finland just as it is applied in the USA. It is applied in accordance with the realization convention. Thus expenditure-revenue accounting is not any different in this respect from accounting based on the GAAP. In order to accommodate for the application of the accrual basis, accounts receivable and accounts payable are augmented. This is elucidated by Figure 3. Figure 3. Accrual Basis in Recording Transactions Revenue Accounts C a s h Accounts Expenditure accounts receivable + - payable accounts ========= ---------- ------- --------- =========== 1 ! ! ! ! ---------} ! 2 ! ! ! --------} ! ! 3 ! --------} ! ! ! ! 4 ! ! ---------} ! ! ! The transactions depicted in Figure 3 are 1. Purchase on credit 2. Settlement of this credit 3. Credit sales 4. Payment for the credit sales is received. 3. Accounting for Segments of the Total Period _9/ 31. Segmenting a Total Period 311. Reason for Segmenting It is obvious that income determination is trivial if the total period is under observation. Income must, however, be determined for periods which usually are much shorter than the total period. The total period must therefore be segmented into time intervals called accounting periods. In financial accounting this accounting period almost always is one year. In expenditure-revenue accounting the stated reason for the need of yearly income determination is assessing annual distributable profit. Originally, nothing was said or assumed of managerial reasons for income determination. 312. The Congruence Principle The adoption of the congruence principle is a central issue of Professor Saario's expenditure-revenue accounting: Per definition, the sum of annual profits (for accounting periods making up the total period) is equivalent to the total profit (providing that no mistakes are made). Thus in expenditure-revenue accounting the annual profits are considered nothing more than logically dependent slices of the total profit. The purpose of accounting is consequently defined as splitting the total profit into annual profits of the right size. My ensuing interpretation is the following. In expenditure-revenue accounting the timing of the annual profits is considered inconsequential providing that it does not affect the distribution of profits. Thus early annual profits are not assumed to be preferred to later annual profits, since only the total profit is assumed to count. This means an implicit assumption of zero cost of capital to the owner (entrepreneur), i.e. there is no time value of money in the expenditure-revenue accounting thinking. To recapitulate, I define p(t) = annual profit in year t P = total profit (same as total income Formula (1)) f = the year of the foundation of the firm t(o) = the year of the latest accounting period q = the year of liquidation then in expenditure-revenue accounting we obviously must have t(o) q The sum of (2a) sum p(t) + sum p(t) = P if t(o) annual profits t=f t=t(o)+1 is less is defined by than q the total profit P, not vice versa. q (2b) sum p(t) = P if t(o) is at or beyond q t=f 313. Discussion on the Causal Relation between Annual and Total Profits As can seen from the above, my conclusion is that in expenditure-revenue accounting model the annual profits are dependent on the total profit, _10/ not vice versa! The total period ends when the firm has served its task in generating a total profit, i.e. the desired purchasing power for the entrepreneur. In my view the following counter argument, concerning the logic of the foundations of expenditure-revenue accounting, can be made at this point. If the annual income of the firm is positive, the firm is seldom liquidated. If, however, negative annual incomes are observed for a prolonged length of time, the firm is likely to be dissolved. _11/ Because the future is uncertain, the historical annual incomes are used by the management and other interested parties as (at least one) criterion in deciding whether to continue operations or dissolve the firm (assuming that the decision makers behave rationally). According to this practical reasoning, it would be the annual incomes that determine the length of the total period and the total income, rather than the other way round, as is assumed in the expenditure-revenue accounting model. Historical observations, which by necessity always are the basis for predicting future, would then be the determining factors rather than a completed profit earning task. The direction of the relationship between the total profit and the annual profits used in expenditure-revenue accounting seems to indicate an implicit assumption of perfect knowledge of the future. Otherwise income determination is inconsistent until the firm is dissolved. If the argument put forward is accepted that the firm is dissolved when annual incomes continuously remain negative, a circular reasoning results in expenditure- revenue accounting model. This controversy has remained ignored and unresolved for nearly to fifty decades by now. _12/ 32. Principles of Annual Income Determination 321. Annual Closing of Accounts In expenditure-revenue accounting the underlying function of the annual closing of accounts _13/ is taken to be the allocation of the relevant portion of the total profit to the accounting period under observation. In order to calculate the annual income, the realized revenues are first allocated to the pertinent accounting period. After that, the relevant expenditures are matched against these realized revenues as expenses. The realization convention applied for recognizing the realized revenues of the accounting period, is the same as in GAAP, and is therefore discussed no further. As will be seen, the matching convention applied is very similar to the GAAP convention. Differences occurring in the point of view result from the different assumption about the going-concern convention. 322. Expenses and Unexpired Expenditures In order to determine annual income, the expenditures have to be divided into two categories. The expenditures, which are deducted from the realized revenues of the current accounting period, are called expenses. The other part, which is not yet deducted from the realized revenues, is called unexpired expenditures. In the annual closing of accounts, the unexpired expenditures become assets._13/_14/ They always will be converted into expenses in the later accounting periods, latest by the end of the total period. Technically, the unexpired expenditures are transferred to the later accounting periods via the balance sheet. For expenditure-revenue accounting the balance sheet thus becomes necessary as an auxiliary account, when total profit has to be allocated to individual accounting periods for annual income determination. No accounting practice difference seems to exist here from accounting based on the GAAP, which includes the same dichotomy between assets and expenses. In American accounting literature, however, the sequence of reasoning is often given in a different order when compared with expenditure-revenue accounting. That is: "when incurred, expenditures represent assets, which then expire, either instantaneously or eventually, and thus become expenses". This is a noteworthy conceptual difference. 323. The Matching Convention Expenditures are matched, as expenses, against the realized revenues of the different accounting periods. Finally all the expenditures must be thus allocated, in the form of expenses, to the accounting periods making up the total period. The basis of matching in expenditure-revenue accounting is given by the association between expenditures and revenues, and the congruence principle discussed earlier. From the association principle ("expenditures are a prerequisite for revenues") it follows that expenditures expire only when the associated revenues are earned. From the congruence principle ("the sum of annual profits is equivalent to the total profit") it follows, if the principle is applied in a consistent manner, that no losses should be reported for individual accounting periods if the total income will be positive, i.e. a total profit occurs. _16/ The following principle has been propounded by Professor Saario in accordance with the reasoning above. "In periods with little or no realized revenues, little or no expenditures can become expenses". In actual practice it is seldom possible to establish the true _17/ association between expenditures and revenues. _18/ This fact gives rise to various pragmatic rules for assessing which of the expenditures have expired and should thus be written off as expenses (and which expenditures still are unexpired, and should consequently be entered on the balance sheet). For example, the relevant Finnish legislation has adopted the rule that all expenditures which are no more expected to produce revenues, are expenses. This rule can be regarded as a corollary of the association and congruence principles, when applied to matching. -- The role of expectations is in my opinion important here. If the underlying principle for watching were given as "expenditures which no more produce revenues have expired (since corresponding future revenues are known not to exist)", then, taken strictly, a perfect knowledge of the future would be required with respect to future revenues. Assumptions made about the knowledge of the future necessarily are critical in any accounting model, since by definition they should be based on historical transactions (ex post) rather than future transactions (ex ante). _19/ In the original presentation of expenditure-revenue accounting, it has been emphasized that in the framework of the dichotomy of expenditures ("expenses"/"unexpired expenditures = assets"), all assets valuation rules should be seen as nothing but matching rules for annual income determination. A point that will be taken up further on. 33. Special Topics This section reviews the ideas of priority order of matching and realization depreciation method, which are sidelines related to expenditure-revenue accounting. This part can be skipped without a loss of continuity. Because of space limitations, it will not be possible to analyze the underlying concepts at length, but the priority order of matching, and realization depreciation are nevertheless taken up here because they are interesting facets of the Finnish accounting research history. 331. Priority Order of Matching As has been seen, assuming a total profit, annual expenses must not exceed annual realized revenues according to the theory of expenditure-revenue accounting. This notion gives rise to the question of the manner in which the expenditures should be deducted from the revenues. The fact is that since expenditures precede corresponding revenues, the expenditures gradually become covered by the revenues as they are realized. It has been suggested that costs, and hence expenditures are covered by revenues, not proportionally, but in a definite priority order. The statement in the Finnish language of the relevant theory, in Finland called "The Priority Order Theory of Costs" is attributed to Professor Martti Saario _20/, and its later refinement to Professor Jaakko Honko. _21/ Two criteria were originally considered for determining a priority order of matching. The first was the length of time it takes an expenditure to cycle once. This criterion was, however, found unsatisfactory already in the original presentation. Instead a second criterion was put forward as the theoretically right one. This was the number of products or revenue items associated with the expenditure. The smaller this denominator, the higher the priority of the expenditure. The following illustration gives the original priority order of matching suggested. Direct labor Direct materials Variable overhead Administrative expenses Equipment and machinery Plant Land Entrepreneur 332. Realization Depreciation Depreciation is one of the most controversial issues in accounting. Depreciation is to allocate a "long-term" expenditure as expenses over the revenue-producing life-span of the expenditure. _22/ The most popular depreciation methods in company practice are the straight-line, double declining-balance, units-of-production, and the years'-digits _23/ methods. Double declining-balance and the years'-digits methods are accelerated depreciation methods, i.e. methods with decreasing depreciation charges. They often are advocated on the basis of an alleged diminishing revenue-earning power resulting from economic and physical age. _24/ An entirely different pattern of depreciation is suggested in "compound interest" (or "annuity") depreciation method. The revenues associated with the long-term expenditure are assumed to be made up by two parts. The first is the return (interest) on the long-term expenditure. The rest is the amount of the long-term expenditure recovered = depreciation. With the passage of time the part due to interest decreases, when the unrecovered portion of the expenditure gradually decreases. Consequently, the annual amount of the expenditure recovered increases. Thus,a depreciation method with increasing depreciation charges results. _25/ Next we discuss the idea of realization depreciation in more detail. The basic assumptions of expenditure-revenue accounting, discussed throughout this paper, originate from Professor Saario's doctoral dissertation in 1945 on the "realization principle and depreciation of fixed assets", and foremost from his papers in 1958 and 1959. _26/ In his dissertation and a later paper in 1961 _27/ he put forward the realization depreciation method: As was discussed earlier, from the association principle of expenditures and revenues it follows that expenditures expire (become expenses) only when associated revenues are realized. As we saw, from congruence principle it follows that losses are not consistent for any of the accounting periods if the net income for the total period is positive. Depreciation (an expense) is, consequently, strictly tied to the revenues produced by a long-term expenditure. _28/ Therefore, in accordance to this thinking, depreciation has absolutely nothing to do with physical aspects of the relevant assets. In periods of no revenues no expense is relevant, and no depreciation can thus be made then. The idea of realization depreciation is, on the basis of the principles above, that depreciation is directly dependent on the associated revenues, being thus a function of them. The relation is given by the internal-rate-of-return model. To illustrate, consider an extremely simple numerical example involving an expenditure of $100 at the beginning of the first year, and revenues of $57.6 at the end of the first and the second year. The internal rate of return on this investment is 10%, since $57.6/1.10 + $57.6/1.102 = $52.4 + $47.6 = $100. The depreciation for the first year is $52.4 and $47.6 for the second. Contrary to the compound-interest depreciation method, which is also based on the rate of return on the long-term expenditure, realization depreciation usually leads to an accelerated depreciation pattern. _29/ 34. Treatment of Expenditure, Revenue, and Financial Accounts in Closing Figure 4 illustrates the principle of the closing process by depicting the closing entries for expenditure-revenue bookkeeping. _30/ Figure 4. Closing Entries Expenditure Revenue Financing accounts accounts accounts =========== ========= ========= ! ! ! ! : : ! :: ! :: : : :: :: : : .....................::...:: : : : ...................::....: : : : : :: .........: : : : ::........ : : : : : : : Income : : : Balance :...... : : statement : : : sheet : : : account : : : account : : matching ------------------- : : : ------------------ : : o..} expenses ! revenues {.: : :.} cash ! : : : ! : ! payables {.: : : ! :...} receiv- ! : : ! ables ! : : ! ! capital {.....: :.............+...................} unexpired! ! expendi- ! ! tures ! ! ! profit {-+------------------------------+-} profit ! ! In order to calculate the annual net income all realized revenues and expenses of the accounting period are gathered from the books on the income statement account, which is the first closing account. The annual net income is given by the balance of the income statement account. Unexpired expenditures and financing accounts are closed on the balance sheet account, which is the second closing account. Undistributed profit is entered on the credit-side as retained earnings. _31/ Thus the concept of retained earnings, which is central in accounting based on the GAAP, does not come up in expenditure-revenue accounting at all before this stage. The function of the balance sheet is to transfer the ending balances of the unexpired expenditures and the financing accounts on to the next accounting period, where they become the beginning balances of the relevant accounts. The balance sheet does not have the same conceptual emphasis as a statement of the financial position of the firm as in accounting based on the GAAP. Income determination is the underlying purpose of expenditure-revenue accounting. As has been discussed at great length in this paper, matching naturally is the critical stage of annual income determination. All rules affecting matching through determination of expenses or unexpired expenditures affect the annual income. It was stated earlier in this paper that in expenditure-revenue accounting it is emphasized that all asset valuation rules are nothing but matching rules for annual income determination. In other words any valuation of the balance sheet items should be considered a valuation of the annual income. The reasoning is easily demonstrated by writing out the fundamental equation of matching elucidated by Figure 4. Expenditures = Expenses + Unexpired expenditures (income statement) (assets/balance sheet)

السلام عليكم انا طالبة في اول سنة لي في قسم المحاسبة انا حليت المسئلة بس قالوا لي ان الطريقة دي ماراح تنحسب لي لاني وضعت كلها في جدول واحد المشكلة اني مش عارفه ازاي احلها في جداول منفصلة زي دي الطريقة http://www.netmba.com/accounting/fin/process/ledger/ cash في جدول منفصل وال expenses في جدول منفصل قالت لي زي كده بس انا مش فاهمه ازاي تيجي اهم فقرة هي a لان عليها 40 درجة ارجو المساعدة بأقصى سرعة أريد الحل لان اخر فرصة بكرا ارجوكم ولكم جزيل الشكر ----------------------- Question Yoyo started business on 1 -May-2007. The company sells computer accessories. Transactions for the month were as follows: Date $ 1-May Commenced business with cash in bank 50,000 2-May Purchase goods on credit from Mita Ltd. 1,700 2-May Paid carriage on purchases 50 3-May Sold goods on credit to Bee Ltd. 2,000 6-May Paid by cheque cash purchases 500 7-May Sold goods on credit to OG Ltd. 1,600 8-May Received from Bee Ltd. 2,000 14-May Sold goods on credit to Bee Ltd. 1,900 15-May Paid Mita Ltd by cheque in full settlement 1,600 16-May Bee Ltd returned goods valued at 200 17-May Purchased goods from Siew Ltd on credit 2,000 19-May Sold goods on credit to OG Ltd. 1,100 20-May Received by cheque cash sales 3,000 23-May Received by cheque from OG Ltd. 1,500 after cash discount of 100 25-May Returned damaged goods to Siew Ltd. 120 26-May Paid rent by cheque 1,200 27-May Paid salaries by cheque 800 29-May Received interest 130 30-May Purchase office furniture by cheque 1,800 31-May Paid general office expenses by cheque 1,400 Required: (a) Record the above transaction in the Ledger accounts and closed the accounts at the end of the month. [40 marks] (. Prepare a Trial Balance as at 31st May 2007. [10 marks] © Prepare a Trading, profit and loss account for the month ended 31st May 2007. (Note: Assume a gross profit of 60% on net sales) [10 marks] (d) Prepare a Balance sheet as at 31St May 2007 [10 marks] (e) Explain with illustrations why adjusting entries are necessary and their effects on the financial statements. [30 marks]

الاستاذ محمد بشارة الاخوة الاعزاء السلام عليكم استفسر عن الميزانية الافتتاحية . ارجو من كل من لدية معلومة ان لايبخل علينا بها. 1/مكوناتها 2/تعريفها 3/ شكل الميزانية وطرق العرض

بسم الله الرحمن الرحيم السلام عليكم ورحمة الله وبركاتهـ اولا احب اشكر جميع الاعضاء على المواضيع الهادفه والمفيده وبكل صراحه انا كنت ادخل هالمنتدى بين فتره وفتره اخذ منه الاشياء المفيده لاني طالبه في كليات التقنيه. بس الحين واجهتني مشكله . . طبعا مافي حد مجبور او مغصوب انه يساعدني فيها مثل ماقلت الانسان يوم بيسوي خير بيسويه لوجه الله . . وانا ما بنساكم بالدعاء عندي بروجيكت عليه 30% واذا تقدرون تساعدوني فيه اكون لكم من الشاكرين لاني تعبت وانا ادور والله مالقيت شي .. وان شاء الله انا اعتمادي الاول بيكون على الله ثم على اخواني الاعضاء الموجودين 3 اسئله فقط لا اكثر ولا اقل:- 1. Explain why you think financial accounting is important in the UAE today. 2. State what the letters GAAP stand for; then explain what GAAP means; and why GAAP is necessary in the world (especially) today. 3. Using the Internet, obtain one of either a balance sheet, income statement, or statement of changes in equity, for a corporation, then select 5 items on the statement you have chosen and discuss them. اتمنى من اهل الخير والدكاتره الموجودين ما يقصرون وياي لاني والله العظيم محتاجته ضروري وتسليم البروجيكت يوم الاربعاء تاريخ 3/10/2007 ويعطيكم العافيه والسموحه منكم

أيها الأخوه أريد أي شيء عن بطاقة الأداء المتوازن أبحاث , كتب , مقالات في مجلات عالميه, أفيدوني أرجوكم للضروره جزاكم الله خير

Critics say a 30-year-old standard has enabled companies to leave hundreds of billions in debt off their balance sheets. أكثر...

السلام عليكم لقد قمت برفع بوست بعنوان INITIAL BALANCE SHEET ولم اره في قائمة اخر البوستات كما انه غير مرئي للاخوة الاساتذة والزملاء حتي يقوموا بالرد علية اريد ان اعرف مالحاصل. وشكرا جزيلا عاصم

[align=left:de25f35037]Task. Jayne started to trade as an agent for the sale of canal cruisers on 1 January. During her first month of trading she: sold boats for £53,000, comprising £10,000 for cash and the remainder on credit terms. introduced £20,000 of her own money into the business. An aunt lent her a further £10,000. rented premises on 1 January and paid £500 as two months rent in advance on that day. The costs of running her premises, including the wages of an assistant, were paid in cash on the last day of the month for the sum of £980. She was unable to pay her electricity bill as the meter had not been read, but estimated the cost for the month as £50. An insurance premium for a year's cover was paid on 1 January. It cost £1,200. During the month boats were purchased for £47,000, and so far £7,000 has been paid to the suppliers. Boats remaining unsold on 31 January had cost £15,000. Required: Calculate the profit Jayne made during January. Calculate how much money she has left in the business bank account. Prepare Jayne's balance sheet as at 31 January. Hint: start by identifying all cash receipts and payments and adjusting the bank balance accordingly. Do this by identifying cash transactions classifying as either income which increases the bank balance OR expenditure which decreases the bank balance Do not forget that you have to add together cash sales and credit sales to arrive at the sales figure in the Trading account[/align:de25f35037].[/align]

[align=left:e5fae15d2d]Financial Statement Basics Understanding of the 3 financial statements – (balance sheet, income statement and statement of cash flows). What does each financial statement represent? The Balance Sheet (BS) presents a firm’s investments and financing at a moment in time.  What is the financial position, or financial health, of a firm? The Income Statement indicates the net income for a period of time (profit margin = net income / revenues).  How profitable is the firm? The Statement of Cash Flow reports the net cash flows derived from operating, investing and financing activities for a time period  Is the firm generating sufficient cash flows from its customers to finance operations and to acquire buildings and equipment or must it seek new funds from lenders or owners? What is the structure of each statement? Balance Sheet Investing Financing Assets = Liabilities + Shareholders’ Equity Assets are economic resources with the ability or potential to provide future benefits to a firm. Current assets (e.g. cash, short term securities, accounts receivable, inventories) are consumed or turned into cash within one year of the date of the balance sheet. Liabilities are creditors’ claims on the assets of a firm and show the sources of the funds used to acquire the assets. Current liabilities require payment within one year, long-term debt within more than one year. Firms typically finance current assets with current liabilities and vice versa. Shareholders’ equity shows the amounts of funds owners have provided and their claims on the assets. Shareholders’ equity comprises contributed capital (e.g. common stock, additional paid in capital) and retained earnings. Income Statement Revenue – Expenses = Net Income Cash Flow Statement 3 sections: Operating Investing Financing What is the link between the three statements? Relation of Income Statement to Balance Sheet Income Statement links the balance sheet at the beginning of the period with the balance sheet at the end of the period. Balance sheet amount for retained earnings represents the sum of prior earnings of a firm in excess of dividends. The amount of net income helps explain the change in retained earnings for the period. Retained Earnings (Start of Period) + Net Income for Period – Dividends Declared and Paid = Retained Earnings (End of Period) Relation of Cash flow Statement to Income Statement and Balance Sheet CFS explains the change in cash between the beginning and the end of the period. The statement of cash flows also sets forth the major investing and financing activities for the period. Thus the statement of cash flows also helps explain changes in various items on the comparative balance sheet. The statement of cash flows parallels the income statement by showing the relationship between net income and cash flow from operations. Income can be rising but cash flow can still decline if the business does not collect cash from its customers. Summary Financial Position – Balance Sheet Profitability – Income Statement Cash generating ability – Statement of Cash Flows Understanding of the basic mechanics of financial accounting – (debits, credits, transaction journal entries, adjusting entries, closing entries, t-accounts, trial balances and financial statements) Accounting Process  Journalizing in General Journal  Periodic Posting to Appropriate Accounts  Preparation of unadjusted trial balance  Correction and adjustment of trial balance  Preparation of financial statements Typical Journal Entry Date Account Debited $Debit Account Credited $Credit Explanation of transaction or event being journalized e.g Date Cash $Debit Equipment $Credit Purchase equipment costing $X in cash. Posting happens periodically (e.g. weekly or monthly). Amounts from General Journal are posted to the General Ledger. T-Accounts are used. Trial Balance Preparation: Lists accounts in general ledger with a trial balance as of a particular date. Equality between sums of debit account balances and credit account balances helps check the accuracy of arithmetic. Trial Balance After Adjustment and Correction: Errors and omissions. Unrecorded events. E.g pre-paid items such as insurance, the costs of which are accrued over the life of the policy. Normally done by preparing a journal entry. Financial Statement Preparation: Can be done after corrections and adjustment. Balance sheet How are assets and liabilities valued on the balance sheet? Asset valuation Methods: Acquisition (historical) cost; current replacement cost, current net realizable value, present value. Monetary assets generally appear on the balance sheet at their net present value, their current cash or cash equiavalent value. E.g. cash, marketable securities, accounts receivable. Noncurrent monetary assets are therefore discounted. Nonmonetary assets (e.g. merchandise inventory, PPE) generally appear at acquisition cost, in some cases adjusted downward to reflect that the firm has consumed some of the assets‘ services and, in others, to recognize some declines in market value. Note impairments, depreciation or holdings losses or mark-to-market. Liability valuation Most liabilities are monetary. Those due within one year or less appear at the amount of cash the firm expects to pay to discharge the obligation. If long term (due in more than one year), e.g long term bonds appears at the present value of the future cash outflows. Nonmonetary liabilities: a liability that involves delivering goods or services other than cash. E.g. a warranty, cash advance. Such a liability appears on the balance sheet at the estimated cost, a cash advance appears at the amount of cash received. What are the components of stockholders’ equity section? Common Stock: amounts received equal to the par or stated share value Preferred Stock: amounts received for stock that has some preferences Additional Paid-in Capital: received amounts in excess of par or stated value Retained Earnings: increase in net assets due to generated earnings. Treasury Shares: the cost of shares reacquired by the firm itself. How is US GAAP different from other countries? Structure of the balance sheet US GAAP Other countries Current assets Noncurrent assets Noncurrent assets Current assets Current liabilities Long-term debt / liab. Shareholders equity Shareholders equity Long-term debt / liab. Current liabilities Terms used for accounts US Other countries - Property, Plant Equipment - Investment in securities - Accounts receivable - Cash - Common Stock - Additional paid-in capital - Retained earnings - Bonds payable - Notes payable to Banks - Accounts payable - Tangible Fixed Assets - Financial Assets - Trade receivables - Liquid funds - Subscribed capital - Capital reserve - Profit reserves, Net income available for distribution - Bonds - Due to Banks - Trade payables Mark to Market versus Historical Cost Some countries allow firms to mark fixed assets (PPE) to market whilst in the US this is only allowed for Marketable Securities (Trading Securities and Available for Sale). Income Statement What is the difference between cash and accrual accounting? Cash accounting: measures the performance of a business from the selling and provision of goods and services based on the cash received from customers. Problems with cash accounting:  Inadequately matches inflows and with the outflows and efforts associated with them.  Unnecessarily delays the recognition of revenues (revenue is recognized only when cash is received).  Provides opportunity to distort the measurement of operating performance (by delaying payments to suppliers at the end of an accounting period, for example) Hence, we use accrual accounting, which recognizes revenue when a firm sells goods or renders services. Expenses are measured using the matching principle, whereby cost expirations are matched to revenues (or economic benefits). When do I record revenues under accrual accounting? Revenues are recorded when they are earned and realizable. This is defined as follows: Earned: A firm has performed all, or most of, the services it expects to provide. Realizable: The firm has received cash or some other asset such as a receivable, whose cash equivalent can be measured with reasonable precision. The above is taken from Stickney and Weil. Another variation of the definition is that revenues are recognized when it is ‘realized or realizable and earned’. To achieve this standard the following criteria must be met:  Persuasive evidence of a sales agreement exists  Delivery has occurred or services have been rendered  The selling price is fixed or determinable  Collection is reasonably assured. The above points come from SEC Staff Accounting Bulletin 101, which was issued in 1999. When I record revenue should I record other things as well? If a firm recognizes revenues in a period before it receives cash it should also take the following factors into account in determining how much of the total revenue to recognized. Uncollectible accounts; i.e. some people will not pay – estimate how many will likely not pay based on previous experience. Sales Discounts and Allowances – Some customers may be provided with discounts for prompt or early payment. Sales returns – Some customers may return the goods for refund. Each of the above must be reliably estimated and the amount of revenue recognized is reduced as appropriate. When do I record expenses under accrual accounting? As assets provide future benefits to a firm, expenses measure the assets consumed in generating revenue. Expenses are ‘expired costs’ or gone assets. Criteria for expense recognition:  Matching principle – If particular revenue causes an asset to expire, that expiration becomes an expense in the period when the firm recognizes the revenue. This treatment – the matching principle – matches cost expirations with revenues.  If no particular revenue causes an asset to expire, that expense becomes an expense of the period in which the firm consumes the benefits of that asset in its operations. Examples… Product costs: Cost of goods sold is recognized as an expense when a firm sells the goods. A firm which buys raw materials and through its operations transforms them into a finished product only recognizes the direct material cost, direct labor cost and manufacturing overhead cost as expenses when the goods are sold, not when they are purchased and paid for. (Matching principle.) Marketing costs: Relate primarily to the revenues of the period and these are thus recognized as expenses in the period that they occur. They are thus referred to as period expenses. It could be argued that certain marketing costs (e.g. advertising) produce a future benefit and should thus be treated as an asset (AOL famously did this in the mid 1990’s and was later sued by the SEC). Hence most accountants have a problem to quantify the future benefit (if there is one at all), hence in normal situations marketing costs are recognized as expenses in the period in which they are incurred. They are normally classified under Sales and General Administrative Expenses (SG & A) by US listed companies. Administrative costs: E.g. presidents salary, accounting and IT system costs are recognized in the same way as marketing, i.e. as period expenses and are also generally classified under SG&A. When do I record asset impairment charges under accrual accounting? Asset impairment – GAAP require a three-step measurement process for measuring impairment on assets other than intangibles not requiring amortization. 1. Compare undiscounted future cash flows from the assets with their book value (e.g. a property which is rented out). The impairment loss is the amount of the book value, which exceeds their fair value (either present value of the future cash flows or market value). 2. Compare book value to market value. Impairment loss is the excess of book value over market value. 3. At the time the firm judges an impairment loss has occurred, the firm writes down the book value of the asset to fair value. Fair value being 1) market value or 2) if the firm cannot assess market value, the net present value of the expected future cash flows. The journalizing process is as follows: Date Accumulated depreciation $Total amount of Accumulated Depreciation attributed to the asset since acquisition Asset e.g. Building – (New Valuation) $New value of the building Loss on impairment $Difference between book value and fair value Asset e.g. Building – (Book Valuation) $Current book value of asset (normally acquisition cost of asset minus any impairment losses recognized previously) Effect on different statements: Balance Sheet Decreases assets by amount of impairment loss Decreases shareholders equity. (Retained earnings?) Income statement Appears a loss on income statement Cash flow statement Need to increase net income by amount of impairment loss since its not a cash flow When do I record restructuring charges under accrual accounting? Restructuring charges are constructive liabilities. A constructive liability arises not from an obligation but from management intent. For example, intent to close a plant, layoff employees and to make severance payments in amounts not yet determined. These are often referred to as restructuring charges and journalized as follows: When liability is recognized: Date Restructuring Charges $Total amount expected to be incurred in the event Liability for severance pay to employees $Total amount expected to be incurred in the event When liability is incurred (i.e. paid) Date Liability for severance pay to employees $Total amount consumed by the event Cash $Total amount consumed by the event Sometimes, a constructive liability may be overestimated. In that case, the following is done to reverse part of the initial charge. Date Liability for severance pay to employees $Total amount expected to be incurred in the event Reversal of Restructuring Charges $Total amount expected to be incurred in the event Reversal appears in income at the end of the year and is hence open to abuse by management. Some companies take a ‘big bath’ by overestimating restructuring charges associated with a planned event and afterwards reverse the amount not required in the restructure to boost income in a subsequent period. Analysts and investors hence do not like to see companies do this and are generally pleased to see a company make accurate estimates of restructuring charges. Effect on different statements of constructive liabilities can be summarized as follows: Statement At estimation of liability When liability is incurred At estimation of liability Balance Sheet Increase liabilities by amount estimated Decreases shareholders equity (through retained earnings) Decreases liabilities Decreases cash Decreases liabilities Decreases shareholders equity (through retained earnings) Income statement Appears a loss on income statement No effect (already accounted for as an expense when estimated) Increases net income Cash flow statement Need to increase net income by amount of estimated. Need to decrease net income by actual amounts of cash paid. Need to increase decrease net income by amount of reversal. [/align:e5fae15d2d]