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MGT 207

The document discusses financial accounting and management accounting. It defines financial accounting as identifying, measuring and communicating economic information to others for decision making. It also defines management accounting as measuring and reporting economic activity within organizations for use in planning, performance evaluation and operational control.

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Alkhair Sangcopan
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29 views

MGT 207

The document discusses financial accounting and management accounting. It defines financial accounting as identifying, measuring and communicating economic information to others for decision making. It also defines management accounting as measuring and reporting economic activity within organizations for use in planning, performance evaluation and operational control.

Uploaded by

Alkhair Sangcopan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FINANCIAL &

MANAGEMENT
ACCOUNTING AND
REPORTING AS THE BASIS
OF FINANCIAL
MANAGEMENT

Presented by
Alianah M. Hassanali
2 FINANCIAL ACCOUNTING

The process of identifying, measuring, and


communicating economic information to
others so that they may make decisions on the
basis of that information and assess the
stewardship of the entity's management.
3 USERS AND THEIR INFORMATION NEEDS

• To decide when to buy, hold or sell an equity investment.


• To assess the stewardship or accountability of management.
• To assess an entity’s ability to pay and provide other benefits
to employees.
• To assess security for amounts lent to the entity.
• To determine taxation policies.
• To determine distributable profits and dividends.
• To prepare and use national income statistics.
• To regulate the activities of entities.
4 ENTITY

▪ COMPANIES
▪ OTHER FORMS OF
ORGANIZATION, SUCH
AS PARTNERSHIP
5 FINANCIAL STATEMENTS

The principal means of


providing financial information
to external users is the annual
financial statements. Financial
statements provide a summary
of the performance of an entity
over a particular period and of
A complete set of financial statements
prepared under IFRS comprises:

• The statement of financial position.


• The statement of financial performance.
• The statement of changes in equity.
• The statement of cash flows.
• Notes to the financial statements.
REQUIREMENT TO PRODUCE FINANCIAL
7 STATEMENTS

IFRS
LIMITED (International
National
LIABILITY Financial
Legislation
COMPANIES Reporting
Standards)
8 FINANCIAL REPORTING STANDARDS

• IASB (International
Accounting Standards Board
IFRS
• FASB (Financial Accounting
GAAP Standards Board)

• IFRS (International Financial


Reporting Standards)
SEC rule
• GAAP (Generally Accepted
Accounting Principles
9
4 MANAGEMENT ACCOUNTING

Management Accounting, also referred


to as managerial accounting, is the
process of measuring and reporting
information about economic activity
within organizations, for use by
managers in planning, performance
evaluation, and operational control.
PERFORMANCE OPERATIONAL
PLANNING
EVALUATION CONTROL
•For example, deciding what products to •Evaluating the profitability of individual •For example, knowing how much work-
make, and where and when to make products and product lines. in-process is on the factory floor, and
them. Determining the materials, labor Determining the relative contribution of at what stages of completion, to assist
and other resources that are needed to different managers and different parts the line manager in identifying
achieve desired output. In not-for-profit of the organization. In not-for-profit bottlenecks and maintaining a smooth
organizations, deciding which programs organizations, evaluating the flow of production.
to fund. effectiveness of managers,
departments and programs.
OBJECTIVES:
To help management by providing
information that is used to plan, set
goals and evaluate these goals.
AUDIENCE:
Used within an organization, by
managers and employees.
OPTIONAL?
Not legally required.
FOCUS:
Focuses on the present and forecasts
for the future.
FORMAT:
Format is informal and is on a per
department/company basis as
needed.
RULES:
Managerial accounting reports are
only used internally within the
organization; so they are not subject
to the legal requirements that
financial accounts are.
Thank you!
Any questions?

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