Financial Accounting: IFRS, 3rd Edition

CHAPTER 1 Accounting in Action

FEATURE STORY

Knowing the Numbers

Many students who take this course do not plan to be accountants. If you are in that group, you might be thinking, “If I’m not going to be an accountant, why do I need to know accounting?” In response, consider the quote from Harold Geneen, the former chairman of a major international company: “To be good at your business, you have to know the numbers—cold.”

Success in any business comes back to the numbers. You will rely on them to make decisions, and managers will use them to evaluate your performance. That is true whether your job involves marketing, production, management, or information systems.

In business, accounting is the means for communicating the numbers. If you don’t know how to read financial statements, you cannot really know your business.

Many companies spend significant resources teaching their employees basic accounting so that they can read financial statements and understand how their actions affect the company’s financial results. Employers need managers in all areas of the company to be “financially literate.”

Taking this course will go a long way to making you financially literate. In this book, you will learn how to read and prepare financial statements, and how to use basic tools to evaluate financial results.

Appendices A, B, and C of this textbook provide real financial statements of three companies from different countries that report using International Financial Reporting Standards ...