财务报告the statement of financial performance
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Understand and apply key concepts in management accounting, working capital management and managing corporate financial risk, including long term decision making and the time value of money
Statement of Financial Performance: content and format
Relationship with the Statement of Financial Position
Revenue Recognition Cost of sales and inventory valuation Matching: accruals, prepayments, depreciation
Post Trial Balance Adjustments
Once the Trial Balance has been created, financial statements can be created, but adjustments are usually made to it first.
For example, recording an allowance for doubtful debts
Debit Allowance for doubtful debt expense £2,000
Credit Allowance for doubtful debts
£2,000
To record an allowance for doubtful accounts receivable
Accounting for Decision Makers Lecture 3
The Statement of Financial Performance
Learning outcomes
Understand key accounting concepts and principles and the steps required to produce financial statements
Interpret and analyse corporate financial statements, including the Statement of Financial Position, Statement of Financial Performance, and Statement of Cash Flows.
6
Preparation of financial statements from a Trial Balance
Account balances for expenses and income accounts are transferred from the Trial Balance to the Statement of Financial Performance.
Analyse financial statements using appropriate tools (e.g. ratio analysis)
Explain the reasons for International Financial Reporting Standards and other current issues in financial reporting
Refresher on the Trial Balance
A Trial Balance
This is a list of the balances on all the accounts balances at the end of the Reporting Period.
Trial balance: Debits = Credits; the accounting equation balances
A. True
66%
B. False
34%
True False
Examples of Financial Statements
See the six Annual Reports in the side-bar menu.
Earnings Management and Adjustments
Today’s Topics
Trial Balance, Statement of Financial Position (Balance sheet) and Statement of Financial Performance (Income statement)
The Trial Balance states the profit
These “period-end adjustments”Bad and Doubtful Debts Inventory Accruals, Provisions, and Prepayments Depreciation
‘Journal Entries’ are used to do this
Account balances for assets, liabilities, and equity are transferred from the Trial Balance to the Statement of Financial Position.
The difference between the expenses and income in the Statement of Financial Performance represents ‘net profit’, which is then transferred to Equity in the Statement of Financial Position.
Statement of Financial Performance: content and format
Relationship with the Statement of Financial Position
Revenue Recognition Cost of sales and inventory valuation Matching: accruals, prepayments, depreciation
Post Trial Balance Adjustments
Once the Trial Balance has been created, financial statements can be created, but adjustments are usually made to it first.
For example, recording an allowance for doubtful debts
Debit Allowance for doubtful debt expense £2,000
Credit Allowance for doubtful debts
£2,000
To record an allowance for doubtful accounts receivable
Accounting for Decision Makers Lecture 3
The Statement of Financial Performance
Learning outcomes
Understand key accounting concepts and principles and the steps required to produce financial statements
Interpret and analyse corporate financial statements, including the Statement of Financial Position, Statement of Financial Performance, and Statement of Cash Flows.
6
Preparation of financial statements from a Trial Balance
Account balances for expenses and income accounts are transferred from the Trial Balance to the Statement of Financial Performance.
Analyse financial statements using appropriate tools (e.g. ratio analysis)
Explain the reasons for International Financial Reporting Standards and other current issues in financial reporting
Refresher on the Trial Balance
A Trial Balance
This is a list of the balances on all the accounts balances at the end of the Reporting Period.
Trial balance: Debits = Credits; the accounting equation balances
A. True
66%
B. False
34%
True False
Examples of Financial Statements
See the six Annual Reports in the side-bar menu.
Earnings Management and Adjustments
Today’s Topics
Trial Balance, Statement of Financial Position (Balance sheet) and Statement of Financial Performance (Income statement)
The Trial Balance states the profit
These “period-end adjustments”Bad and Doubtful Debts Inventory Accruals, Provisions, and Prepayments Depreciation
‘Journal Entries’ are used to do this
Account balances for assets, liabilities, and equity are transferred from the Trial Balance to the Statement of Financial Position.
The difference between the expenses and income in the Statement of Financial Performance represents ‘net profit’, which is then transferred to Equity in the Statement of Financial Position.