Book description
Financial Accounting for Management: An Analytical Perspective, 5e, has been substantially revised to capture new provisions of statutory requirements. A greater emphasis has been laid on simplifying concepts and increasing the usefulness of the text for the students. This has been achieved by introducing new chapters, rewriting certain initial chapters, introducing simpler and smaller illustrations, and including new exercises in all the chapters.
Table of contents
- Cover
- Title Page
- Contents
- Preface
- About The Author
-
PART 1: THE FOUNDATION
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Chapter 1 Measurement of Profit and Financial Position: I Business Transactions to Recording in Journal
- Introduction
- IndiaâThe Place of Origin of Modern Accounting
- The Anatomy of Business
- Assets
- Liabilities
- Financial Position
- Income
- Expenses
- Financial Performance
- The Accounting Process
- Analysis, Documentation and Recording of Business Transactions
- Analysis
- Wonderland of Debit and Credit
- Dual Aspect Concept
- Accrual Concept/Mercantile System of Accounting
- Documentation: Voucher
- Recording: Journal
- Application of Other Fundamental Accounting Concepts
- A. Dual Aspect Concept
- B. Business Entity Concept
- C. Accrual Conceptt
- Application of Other Fundamental Accounting Concepts
- Cost Concept
- Business Entity Concept Further Illustrated
- Concluding Remarks
- Keywords
- References
- Exercises
-
Chapter 2 Measurement of Profit and Financial Position: II Journal to Trial Balance
- Introduction
- Classifying Business Transactions
- Summarising Business Transactions
- Application of Other Fundamental Accounting Concepts
- Realisation Concept
- Money Measurement Concept
- Further Illustration of Some Fundamental Accounting Concepts
- Note on Computerized Accounting System
- Alternative Presentation of Ledger Using Tally
- Concluding Remarks
- Keywords
- Exercises, Cases
-
Chapter 3 Measurement of Profit and Financial Position: III Trial Balance to Balance Sheet and Profit and Loss Account: Non-corporate Entities
- Introduction
- Measurement of Business Income and Financial Position
- Trial Balance to Balance Sheet and Profit and Loss Account
- Analysis of Trial Balance
- Need for Adjustments
- Inventory Valuation
- Construction of Balance Sheet and Profit and Loss Account
- General Instructions and Observations for Preparing the Two Financial Statements
- Brief Analysis of the Financial Statements of Bharat Scientific Products Enterprise
- Recap of Fundamental Accounting Concepts
- Recap of Adjustments
- Concluding Remarks
- Keywords
- Exercises, Cases
-
Chapter 4 Measurement of Profit and Financial Position: IV Corporate Entities
- Introduction
- Basic Features of the Company form of Business Organization
- Registration Under the Companies Act
- Types of Companies
- Preliminary Expenses
- Board of Directors
- Financial Statements of Companies
- Share Capital
- Public Issue Expenses
- Accounting Treatment of Share Capital
- Form of Financial Statements
- Some Features of Financial Statements
- Issue of Shares at a Premium
- Bonus Shares
- Recap of Adjustments
- Concluding Remarks
- Keywords
- References
- Exercises
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Chapter 5 Vertical Financial Statements of Corporate Entities
- Introduction
- Vertical Form of Financial Statements
- Key Distinctive Features of the New Format
- Process of Construction of Financial Statements in the New Form
- Vertical Financial Statements of Shashaank Industries Ltd.
- Merits and Demerits of Vertical Format
- Treatment of âMiscellaneous Expenditure Not W/Oâ and âDebit Balance of Statement of Profit and Lossâ
- Treatment of Tax Expenses
- Concluding Remarks
- Keywords
- References
- Exercises
- Chapter 6 Specific Day Books
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Chapter 1 Measurement of Profit and Financial Position: I Business Transactions to Recording in Journal
-
PART 2: CONCEPTS AND PRINCIPLES
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Chapter 7 Conceptual Framework of Financial Statements
- Introduction
- Purpose of the Framework
- Scope and Coverage
- Components of Financial Statements
- Research in Financial Reporting
- Objective of Financial Statements
- Users and Their Information Needs
- Assumptions Underlying Preparation of Financial Statements
- Qualitative Characteristics of Financial Statements
- Constraints on Qualitative Characteristics
- True and Fair View
- Definitions, Characteristics, Recognition and Measurement of the Elements of Financial Statements
- Concepts of Capital and Capital Maintenance
- Concluding Remarks
- Keywords
- References
- Exercises
-
Chapter 8 Generally Accepted Accounting Principles
- Introduction
- Sources of GAAPs
- Conceptual Framework of Financial Statements
- Accounting Concepts and Principles Other than Those Covered by the Framework
- Requirements of the Companies Act
- Vertical Financial Statements of Nestle India Ltd.
- Accounting Standards Formulated by ICAI
- Convergence with International Financial Reporting Standards (IFRSs)
- Requirements of SEBI
- Requirements of Income Tax Act
- ICAIâs Standard on Accounting Policies: The Mother Standard
- AS-5: Net Profit or Loss for the Period, Prior Period and Changes in Accounting Policies
- Research in Financial Reporting
- Concluding Remarks
- Keywords
- References
- Exercises
-
Chapter 7 Conceptual Framework of Financial Statements
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PART 3: ASSET VALUATION
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Chapter 9 Valuation of Tangible Fixed Assets
- Introduction
- Valuation of Fixed Assets
- Meaning, Identification and Significance of Fixed Assets
- Research in Financial Reporting
- Scope and Coverage
- Principles and Norms of Standard Accounting Treatment
- Determinants of Value of Fixed Assets
- Valuation of Fixed Assets in Special Cases
- Identification of Certain Specific Fixed Assets
- Revaluation of Fixed Assets
- Retirements and Disposals
- Disclosures in Financial Statements
- Impact of Government Grants and Borrowing Costs on Fixed Assets Valuation
- Accounting for Government Grants
- Borrowing Costs
- Corporate Financial Practices
- Valuation of Wasting, Non-Regenerative, Assets
- Corporate Financial Practices
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 10 Depreciation on Fixed Assets
- Introduction
- Depreciation Accounting
- Meaning and Significance of Depreciation
- Research in Financial Reporting
- Scope and Coverage
- Principles and Norms of Standard Accounting Treatment
- Determinants of Depreciation
- Methods of Depreciation
- Statutory Requirements and Compliance
- Book Profit and Taxable Profit
- MAT and Deferred Tax
- Consistency Principle: Change in Method
- Depreciation Charge in Special Cases
- Revaluation of Fixed Assets and Depreciation
- Profit/Loss on Disposal of Fixed Assets
- Disclosures in Financial Statements
- Corporate Financial Practices
- Depletion of Wasting, Non-regenerative, Assets
- Corporate Financial Practices
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 11 Valuation of Assets under Finance Lease and Intangible Assets, Amortization and Asset Impairment
- Introduction
- Assets Under Finance Lease
- Meaning of Lease and Finance Lease
- Substance over Form
- Principles and Norms of Standard Accounting Treatment
- Disclosures in Financial Statements
- Corporate Financial Practices
- Position Under the Income Tax Act
- Intangible Assets and Their Amortisation
- Goodwill
- Meaning and Significance of Intangible Assets
- Principles and Norms of Standard Accounting Treatment
- Rates of Depreciation as Per Appendix IâRule 5 of the Income Tax Rules
- Disclosures in Financial Statements
- Corporate Financial Practices
- Impairment of Assets
- Meaning and Significance
- Principles and Norms of Standard Accounting Treatment
- Disclosures in Financial Statements
- Corporate Financial Practices
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 12 Valuation of Inventories
- Introduction
- Valuation of Inventories
- Meaning and Significance of Inventories
- Research in Financial Reporting
- Scope and Coverage
- Construction Contracts
- Service Providers
- Shares etc. held as Stock-in-Trade
- Livestock and Agricultural etc. Products
- Principles and Norms of Standard Accounting Treatment
- Valuation Policy
- Cost of Inventories
- Cost Formulas
- Illustrations on the Methods of Valuation
- FIFO
- LIFO
- WAC
- Impact of the Three Methods of Valuation on COGs, Gross Profit and Net Profit: A Comparison
- Impact on COGS and Gross Profit
- Impact on Net Profit
- Techniques for the Measurement of Cost
- Net Realisable Value
- NRV and ITS Impact on Valuation of Inventory, COGs, Gross Profit and Net Profit
- Disclosures in Financial Statements
- Corporate Financial Practices
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 13 Valuation of Investments
- Introduction
- Valuation of Investments
- Meaning and Significance of Investments
- Research in Financial Reporting
- Scope and Coverage
- Forms of Investments and Establishment of their Market Values
- Active Market or Absence Thereof
- Principles and Norms of Standard Accounting Treatment
- Classification of Investments
- Cost of Investments
- Valuation/Carrying Amount of Investments in the Balance Sheet
- Reclassification of Investments
- Determination of Cost of Investments in Cases of Rights Issue
- Disposal of Investments
- Shares and Other Securities held as Stock-in-Trade
- Disclosures in Financial Statements
- Investments in Subsidiary/Associate Companies
- Corporate Financial Practices
- Investments in Jointly Controlled Entities
- Corporate Financial Practices
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 9 Valuation of Tangible Fixed Assets
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PART 4: UNDERSTANDING THE ANNUAL REPORT
-
Chapter 14 Corporate Financial Statements of Nestle India Ltd Along With Notes to Accounts and Significant Accounting Policies
- Introduction
- Brief Profile of Nestle India Ltd.
- Financial Statements of Nestle India Ltd.
- Balance Sheet
- Statement of Profit and Loss
- Features of the Financial Statements
- Understanding the Inter-Linkage of the Financial Statements
- Understanding the Various Accounts of Balance Sheet and Notes Thereto
- Shareholdersâ Funds
- Current Liabilities
- Non-current Assets
- Current Assets
- Understanding the Various Accounts of the Statement of Profit and Loss and Notes Thereto
- Revenue from Operations
- Cost of Materials Consumed
- Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade
- Employee Benefits Expense
- Depreciation
- Impairment loss on Fixed Assets
- Profit from Operations
- Other Income
- Finance Costs
- Employee Benefit Expense Due to Passage of Time
- Net Provision for Contingencies (Others)
- Profit before Corporate Social Responsibility Expenses, Exceptional Items and Taxation
- Corporate Social Responsibility Expenses
- Exceptional Items
- Profit before Taxation
- Tax Expense
- Profit after Taxation
- Earnings per Share
- A Brief on Deferred Tax Assets and Liabilities
- Purpose Served by AS-22
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
- Appendix
- Employee Stock Option Plans
-
Chapter 15 Other Mandatory Financial Reports
- Introduction
- Auditorsâ Report
- Requirements of the Companies Act
- Companies (Auditorsâ Report) Order, 2003 or CARO
- Corporate Financial Practices
- Review of the Auditorsâ Report of Nestlé
- Directorsâ Report
- Requirements of the Companies Act
- Corporate Financial Practices
- Review of the Directorsâ Report of Nestlé
- Corporate Governance Report
- Objective and Importance of Corporate Governance
- Suggested List of Items for Corporate Governance Report
- Non-mandatory Requirements
- Review of Nestléâs Report on Corporate Governance
- Management Discussion and Analysis Report
- Report and Its Contents
- Significance of MD&Amp;A
- Review of Nestléâs MD&A Report
- Report on Corporate Social Responsibility (CSR) Activities
- Requirements of the Companies Act, 2013
- Review of Nestléâs Report on CSR Activities
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 14 Corporate Financial Statements of Nestle India Ltd Along With Notes to Accounts and Significant Accounting Policies
-
PART 5: FINANCIAL STATEMENT ANALYSIS
-
Chapter 16 Quality of Earnings: Window Dressing,Creative Financial Practices and Issues Related to Quality of Disclosures in Reported Earnings
- Introduction
- Quality of Earnings
- Limitations of Financial Statements
- Leverage Provided by GAAPs
- Window Dressing
- Creative Accounting/Creative Financial Practices
- Non-provision of Diminution in the Value of Long-term Investments
- Changes in Accounting Policies
- Extending the Accounting Year
- Non-provisioning of Expenses and Doubtful/Disputed Debts
- Contingent Liabilities Not Provided for
- Impact of Other Income and Exceptional/ Extraordinary Items
- Some More Cases
- Beating Window Dressing
- Further Care in Analysis
- Regulatory Efforts in Ensuring Quality of Earnings
- ICAI Awards for Excellence in Financial Reporting
- Background
- Objective
- Categories of the Awards
- Awards to be Distributed
- Important Factors for Selection of Awardees
- Award Winners
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 17 Financial Statement Analysis and the Tool Kit of the Analyst: I Multi-step, Horizontal, Vertical and Trend Analyses and Analytical Balance Sheet
- Introduction
- Objectives of Analysis
- Various Stakeholders and Their Interests
- Tool Kit of the Financial Analyst
- Tools and Techniques
- Multi-step Statement of Profit and Loss
- The Tool
- Format of Multi-step Statement of Profit and Loss
- Analysis of Multi-step Income Statement of Bajaj Auto Ltd.
- Horizontal Analysis
- The Tool
- Horizontal Analysis of Bajaj Auto Ltd.
- Balance Sheet
- Overall Assessment
- Common-sized Analysis
- The Tool
- Comparative Common-sized Analysis of Bajaj Auto Ltd. and TVS Motor Company Ltd.
- Statement of Profit and Loss
- Balance Sheet
- Overall Assessment
- Trend Analysis
- The Tool
- Trend Analysis of Liberty
- Quantitative Details
- Position at The Year End
- Overall Assessment
- Analytical Balance Sheet
- The Tool
- Review of Analytical Balance Sheet of Shopperâs Stop Ltd.
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 18 Financial Statement Analysis and the Tool Kit of the Analyst: II Earnings Per Share (EPS) Analysis
- Introduction
- Earnings Per Share
- Significance of EPS
- Scope and Coverage
- Principles and Norms of Standard Accounting Treatment
- Presentation of BEPS and DEPS
- Measurement of BEPS
- Measurement of DEPS
- An Illustration Now Follows to Clarify the Above Discussion
- Restatement of EPS Consequent to Issue of Non-resource Generating Equity Shares After the Balance Sheet Date
- Per Share Information Other Than BEPS and DEPS
- Disclosures in Financial Statements
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 19 Financial Statement Analysis and the Tool Kit of the Analyst: III Ratio Analysis
- Introduction
- Ratio Analysis
- Classification of Ratios
- Structure of Discussion of Ratios
- Background Note on Innovative Approach towards Deriving Various Ratios
- Return on Investment (ROI) Ratios
- ROI Ratios of Grasim Industries Ltd.
- Solvency Ratios
- Solvency Ratios of Grasim Industries Ltd.
- Liquidity Ratios
- Liquidity Ratios of Grasim Industries Ltd.
- Resourcesâ Efficiency or Turnover Ratios
- Resources Efficiency Ratios of Grasim Industries Ltd.
- Profitability/Profit Margin Ratios
- Multi-step Profit Margin(s) to Net Revenue from Operations Ratios of Grasim Industries Ltd.
- Ratios of Individual âOther Expensesâ to Net Revenue from Operations (%) of Grasim Industries Ltd.
- Ratios of Other Income (non-operating), Exceptional/Extra-ordinary Items and Effective Tax Rate to PBT of Grasim Industries Ltd.
- DU Pont Analysis
- DU Pont Analysis of Grasim Industries Ltd.
- Valuation or Capital Market Ratios
- Valuation Ratios of Grasim Industries Ltd.
- Overall Ratio Analysis of Grasim Industries Ltd.
- Industry Benchmarking
- Analysis of Grasim vis-Ã -vis industry
- Core Ratios
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 20 Construction and Analysis of Corporate Cash Flow Statement
- Introduction
- Features of Cash Flow Statement Nestle
- Reporting Cash Flow Statement
- Meaning and Significance of Cash Flow Statement
- Scope and Coverage
- Principles and Norms of Standard Accounting Treatment
- Cash and Cash Equivalents and Accounting Policy on Their Composition
- Basis for Classification of Activities
- Operating Activities
- Investing Activities
- Financing Activities
- Methods of Reporting Cash Flows
- Issues Requiring Special Considerations
- Non-cash Investing and Financing Transactions
- Restricted Cash and Cash Equivalents
- Additional Information
- Disclosures in Cash Flow Statement
- Construction of Cash Flow Statement from Abridged Balance Sheet When No Additional Information is Provided: Indirect Method
- Construction of Cash Flow Statement from The Abridged Balance Sheet When More Notes and Additional Information is Provided: Indirect Method
- Analysis of Cash Flow Statements
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
- Chapter 21 Model for Strategic and Integrated Managerial Financial Analysis of Annual Report
-
Chapter 16 Quality of Earnings: Window Dressing,Creative Financial Practices and Issues Related to Quality of Disclosures in Reported Earnings
-
PART 6: MORE ON FINANCIAL REPORTING AND ANALYSIS Chapter 22 Analysis of Information from Sources Other than Annual Reports and Inter-company Comparison
-
Chapter 22 Analysis of Information from Sources Other than Annual Reports and Inter-company Comparison
- Introduction
- Significance of Other Sources
- Details of Other Sources of Financial Information
- Study of Some Samples
- Research Report from Capital Market
- News Items from The Economic Times
- CFDS Portal: Corporate Filing and Dissemination System
- Inter-Company Comparative Analysis and Analysis Against Industry Aggregates
- Concluding Remarks
- Keywords
- References
- Exercises, Cases
-
Chapter 23 Analysis of Group Performance: Consolidated Financial Reporting
- Introduction
- Consolidation of Subsidiaries
- Consolidated Financial Statements
- Meaning of Consolidated Financial Statements
- Significance of Consolidated Financial Statements
- Scope and Coverage
- Parent, Subsidiary and Group
- Control
- Principles and Norms of Standard Accounting Treatment
- Global Consolidation
- The Process of Consolidation
- Minority Interest as on 31-03-2007
- Status of the Consolidated Financial Statements
- Application of Other Accounting Standards
- Disclosures in Financial Statements
- Consolidation of Associates
- Accounting for Investments in Associates in Consolidated Financial Statements
- Associate and Significant Influence
- Principles and Norms of Standard Accounting Treatment
- The Equity Method
- Further Issues
- Disclosures in Consolidated Financial Statements
- Consolidation of Joint Ventures
- Financial Reporting of Interests in Joint Ventures
- Types of Joint Ventures
- Jointly Controlled Operations
- Nature of the Joint Venture
- Principles and Norms of Standard Accounting Treatment
- Jointly Controlled Assets
- Nature of the Joint Venture
- Principles and Norms of Standard Accounting Treatment
- Jointly Controlled Entities
- Nature of the Joint Venture
- Principles and Norms of Standard Accounting Treatment
- Disclosures in Financial Statements
- Associates and Joint Ventures
- Analysis of Performance of ICICI Bank Ltd. As a Group
- Concluding Remarks
- Keywords
- References
- Exercise
-
24 Emerging Dimensions in Voluntary Financial Reporting: Contemporary Analytical Techniques
- Introduction
- Need for Voluntary Information
- Growing Complexity of Financial Statements
- Emergence of Contemporary Techniques
- Value Reportingâ¢
- The Value ReportingTM paradigm
- The Value ReportingTM Disclosure Model
- Intangible Assets Score Sheet
- Intangible Assets
- Human Resources
- Intellectual Property Assets
- Internal Assets
- External Assets
- The Score Sheet
- Analysis (As Per Annual Report)
- Infosys Intangible Assets Score Sheet
- Human Resources Valuation
- Value-added Statement
- Brand Valuation
- The Strength of the Invisible
- Valuing the Brand
- Methodology
- Brand Valuation
- Balance Sheet (Including Intangible Assets)
- Current-cost-adjusted Financial Statements
- Balance Sheet
- Profit and Loss Account
- Economic Value-added (EVA®) Statement
- Economic Value-added Analysis
- Concluding Remarks
- Keywords
- References
- Exercises
- Appendix 1 Present Value of An Annuity of Rupee 1 Paid at The Year End
- Appendix 2 Present Value Factor of A Lump Sum (PVF) of Re
-
Chapter 22 Analysis of Information from Sources Other than Annual Reports and Inter-company Comparison
- Index
- Copyright
Product information
- Title: Financial Accounting for Management, 5th Edition
- Author(s):
- Release date: March 2016
- Publisher(s): Pearson Education India
- ISBN: 9789332578913
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