企业财务管理的经典实用课件管理会计教案本量利分析.docx

企业财务管理的经典实用课件管理会计教案本量利分析.docx

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企业财务管理的经典实用课件管理会计教案本量利分析

企业财务管理经典实用课件：

管理会计教案——本量利分析

Learningoutcomes

Youshouldbeableto:

Prepareanincomestatement

Discussthenatureandpurposeoftheincomestatement3>.

Explainthemainaccountingprinciplesrelatedtotheincomestatement.

Discussthemainmeasurementissuesthatmustbeconsideredwhenpreparinganincomestatement.

Lecture2:

Measuringandreportingfinancialperformance

Theincomestatement

Thepurposeoftheincomestatement（orprofitandlossaccount）istomeasureandreporthowmuchprofit/lossthebusinesshasgeneratedoveraperiod.

Profit（loss）fortheperiod=totalrevenuefortheperiodlesstotalexpensesincurredingeneratingtherevenue.

Revenue

‘Revenue’isameasureoftheinflowofeconomicbenefitsarisingfromtheordinaryactivitiesofabusiness.

Thesebenefitswillresultinanincreaseincurrentassets（cashoreasilyconvertibletocash‘TradeReceivables’）.

Therecognitionofrevenue

Itisprobablethattheeconomicbenefitswillbereceived.

Theamountofrevenuecanbemeasuredreliably.

Basiccriteriathatmustbemetbeforerevenueisrecognised:

Anadditionalcriteriontobeappliedwheretherevenuecomesfromthesaleofgoods:

Ownershipandcontroloftheitemshouldpasstothebuyer.

Expenses

‘Expenses’representtheoutflowofeconomicbenefitsarisingfromtheordinaryactivitiesofabusiness

Thesebenefitswillresultineitheradecreaseinasset（cash）oranincreaseinliabilities‘TradePayable’.

Tosummarise

Revenuesdonotnecessarilyrepresentcashreceipts.

Also,notalltheexpensesarepaidincash.

Therefore,profitisameasurementofachievement,ratherthanofcashgenerated.

ThesearetheconceptsofAccrualsAccounting.

Balancesheetandincomestatementsarepreparedonthebasisofaccrualsaccounting.

Cashflowstatementsfollowcashbasisofaccounting.

Thematchingconvention

Expensesshouldbematchedtotherevenuetheyhelptogenerate.

Forexample:

anincomestatementshouldincludeallexpensesincurredingeneratingthereportedrevenue.

Thismeansthattheexpensereportedmaynotbethesameasthecashexpendedonthatexpenseinanaccountingperiod.

Whentheexpenseismorethanthecashpaid

Afirmpays2%salescommissiontostaff.

Totalsalesforyearare?

300,000

Commissionstobepaid=0.02x300,000=?

6,000

However,atyearend,only?

5,000hasbeenpaid…

Recognizingexpenses:

Accountingforsalescommission

Salescommissionexpense?

6,000

Incomestatement（profitandlossaccount）

Balancesheetatyearend

Cash?

5,000

ACPayable?

1,000

Cash-?

5000

Cashflowstatement

Whentheamountpaidduringtheyearis

morethanthefullexpenseoftheperiod

Afirmpaysitsrentquarterlyinadvance（1stJan;1stApril,1stJulyand1stOct）.

Onthelastdayofitsaccountingyear（31stDecember）,itpaysthenextquarter’srent（?

4,000）tothefollowing31March,whichwasadayearlierthanrequired.

Tosummarise…

Rentfor4quarters=4X?

4,000=?

16,000.

Cashpayments=5X?

4,000=?

20,000.

Whentheamountpaidduringtheyearismorethanthefullexpenseoftheperiod:

Accountingforrentpayable

Rentpayableexpense?

16,000

Incomestatement

Balancesheetatyearend

Cash?

20,000

Prepaidexpense?

4,000

Cash-?

20,000

Cashflowstatement

Incomestatementlayout

25,500

Profitfortheyear

（1,100）

Loaninterest

2,000

Interestreceivedfrominvestments

24,600

Operatingprofit

（600）

Depreciation–motorvan

（1,000）

Depreciation–fixturesandfittings

（3,400）

Motorvehiclerunningexpenses

（1,000）

Insurance

（1,200）

Telephoneandpostage

（7,500）

Heatandlight

（14,200）

Rentandrates

（24,500）

Salariesandwages

78,000

Gross/Tradingprofit

154,000

Costofsales

232,000

Salesrevenue

?

Thecalculationofdepreciation

Tocalculateadepreciationchargeforaperiod,fourfactorshavetobeconsidered:

Theusefullifeoftheasset

Theresidualvalueoftheasset

Thecostoftheasset

Thedepreciationmethod.

WhatisDepreciation?

Depreciationisanon-cashexpensethatreducesthevalueofanassetovertime.Assetsdepreciatefortworeasons:

Wearandtear.Forexample,anautowilldecreaseinvaluebecauseofthemileage,wearontires,andotherfactorsrelatedtotheuseofthevehicle.

Obsolescence.Assetsalsodecreaseinvalueastheyarereplacedbynewermodels.Lastyear'scarmodelislessvaluablebecausethereisanewermodelinthemarketplace.

Calculationofdepreciation

Thecostofanasset

Includesallcostsincurredbythebusinesstobringtheassettoitsrequiredlocationandtomakeitreadyforuse.

Includescostofasset,deliverycostsandinstallationcosts.

Theusefullifeoftheasset

Physicallifeandeconomiclife.

Economiclifeisaffectedbytechnologicalprogress.

Economiclifemaybemuchshorterthanphysicallife.

Forchargeofdepreciation,economiclifeisconsidered.

Theresidualvalueoftheasset

Disposalvalueoftheassetattheendofitseconomiclife.

Depreciationmethods

Thereareanumberofdepreciationmethods.

Onceadepreciationmethodisadopted,itcannotbechangedwithoutavalidreason（consistencyandcomparability）.

Methods:

1.Straightlinemethod（thesameamountisdeductedeachyear）

2.Reducingbalancemethod（ahighannualdepreciationchargeintheearlyyearsofanasset'slifebuttheannualdepreciationchargereducesprogressivelyastheassetages）.

Depreciationmethods

Expenserecogniseddependson:

Cost（C）

Usefullife（N）

Scraporresidualvalue（S）

Depreciationmethod:

Straight-linemethod

DepreciationCharge=（C–S）

N

ReducingBalancemethod

DepreciationCharge=constantpercentageonthedecreasingbalance,beginningwiththeoriginalcostandreducingittoscrapvalue.

Straight-linemethod

Equipment

Purchase?

75,000（C）

Life5years（N）

Scrapvalue?

5,000（S）

DepreciationCharge=（75,000–5,000）/5=?

14,000

Reducefixedasset,andincreaseexpenses

Depreciationasaperiodcost

（70,000）

（70,000）

Total

（5000）

5,000

Sale

（14,000）

（14,000）

5,000

Year5

（14,000）

（14,000）

19,000

Year4

（14,000）

（14,000）

33,000

Year3

（14,000）

（14,000）

47,000

Year2

（14,000）

（14,000）

61,000

Year1

75,000

（75,000）

Jan1

Rev-Exps

Equipment

Cash

Reducingbalancemethod

Appliesafixedpercentageofdepreciationonthedecreasingbalance,beginningwiththeoriginalcostandreducingittoscrapvalue.

Higherannualdepreciationchargesintheinitialyears,andlowerchargesinlateryears

Depreciation=

Reducingbalancemethod

Costofmachine?

40,000.Usefullife4years.Estimatedresidualvalueattheendof4years?

1,024

Depreciation%=60%everyyear

Reducingbalancemethod

Selectionofdeprecationmethod

Themostappropriatemethodistheonethatbestmatchesexpensetoeconomicbenefits.

Forassetsevenlyconsumedovertime（e.g.buildings）,straight-linemethodmaybeapplicable.

Forassetsthatlosetheirefficiencyovertime（e.g.machinery）,reducingbalancemethodmaybeapplicable.

Taximplications

Costinginventories

Inventory（stock）comprises:

rawmaterials,workinprogressandfinishedgoods.

Importance

Affectpatternofprofit.

Information

Costofsales–P&L.

Unsoldandunusedstock–BalanceSheet.

Calculationofcostofsales

Case

（1）:

PricesareNOTchanging:

Costofsales（COS）orcostofgoodssold（COGS）inaperiod=

openingstock+purchases–closingstock

Example:

Afirmhas?

2,000ofstockat1stJanuary2009;itbuys?

14,000ofstockovertheyearandhas?

3,000ofstockleftat31stDec.

COGS=2,000+14,000-3,000=?

13,000

Lastin,firstout（LIFO）

Weightedaveragecost（AVCO）

Firstin,firstout（FIFO）

Commonassumptionsusedare:

Case

（2）:

Inventorycostingwhenpricesarechanging?

Example

Calculatecostofsalesandclosingstockgiventheinformationbelow:

1JanNostock

1FebBuy1,000@15=15000

1MarBuy500@18=9000

1MaySell500@30=15000

1JulyBuy1,000@2020000

1NovSell400@35=14000

2,50044000

900=29000

FIFO

Closingstock=100@?

15+500@?

18+1000@?

20=?

30,500

13,500

44,000

1600

30,500

6,000

（400）@?

15

1Nov

36,500

20,000

1000@?

20

1July

16,500

7,500

（500）@?

15

1May

24,000

9,000

500@?

18

1Mar

15,000

15,000

1000@?

15

1Feb

Balance

StockA/C

Costof

Sales

Purchase

Cost

LIFO

Closingstock=1000@?

15+600@?

20=?

27,000

17,000

44,000

1600

27,000

8,000

（400）@?

20

1Nov

35,000

20,000

1000@?

20

1July

15,000

9,000

（500）@?

18

1May

24,000

9,000

500@?

18

1Mar

15,000

15,000

1000@?

15

1Feb

Balance

StockA/C

Costof

Sales

Purchase

Cost

AVCO

Closingstock=1,600@?

18=?

28,800

15,200

44,000

1600

28,800

7,200

（400）@?

18

1Nov

36,000

20,000

1000@?

20

1July

16,000

8,000

（500）@?

16

1May

24,000

9,000

500@?

18

1Mar

15,000

15,000

1000@?

15

1Feb

Balance

StockA/C

Costof

Sales

Purchase

Cost

AVCO:

Notes

On1stMarch

Costofstock=24,000

Stockunits=1,000+500=1,500

AVCO=24,000/1,500=?

16

On1stJuly

Costofstock=36,000

Stockunits=1,000+500–500+1000=2,000

AVCO=36,000/2,000=?

18

Summary

28,800

27,000

30,500

Closingstock

13,800

12,000

15,500

Profit

15,200

17,000

13,500

Costofsales

29,000

29,000

29,000

Sales

AVCO

LIFO

FIFO