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Manac 1 - Introduction

The document discusses the end of the bull market and the shift from growth to value investing, highlighting the performance of growth versus value stocks from March 2009 to November 2021. It outlines the course on Management Accounting, detailing its contents, evaluation methods, and study approach, as well as the fundamental accounting principles. Additionally, it presents practical decision-making scenarios for a company like Apple regarding product pricing and operational strategies.

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pgp40364
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8 views

Manac 1 - Introduction

The document discusses the end of the bull market and the shift from growth to value investing, highlighting the performance of growth versus value stocks from March 2009 to November 2021. It outlines the course on Management Accounting, detailing its contents, evaluation methods, and study approach, as well as the fundamental accounting principles. Additionally, it presents practical decision-making scenarios for a company like Apple regarding product pricing and operational strategies.

Uploaded by

pgp40364
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 8

09-10-2024

Management Accounting
Dr. Vinit S. Chauhan
IIM Lucknow

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The End of Cheap Money

The End of the Long Bull Market

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India VC deals

Value Beats Growth


• Value investors did not do well in the bull run

• Stocks had a weaker relationship to underlying earnings or assets

• This was combined by excessive risk taking fueled by low interest rates

• The fashion was for “growth” stocks, promising explosive future profits

• March 2009 to November 2021


• MSCI Index of Growth Stocks 640%
• MSCI Index of Value Stocks 251%

• With the end of ‘growth’, value is making a comeback

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Apple’s Final Accounts - Decisions


• What should the target price of the iPhone 16 be in India?

• Where is it more profitable for us to build iPods – Taiwan, China, or India?

• Should we tie up with telecoms to provide 2- or 3-year plans for handsets?

• How much money should we set aside to cover warranty costs on the
Macbook?

• Is it cheaper to give customers an adaptor or should we change from


Lightning to USB-C?

The uses of Management Accounting

• Planning

• Decision Making

• Monitoring Operations

• Control

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About the Course

Course Contents
• Accounting / Cost Concepts and classifications
• Overheads
• Activity Based Costing
• Job & Contract Costing
• Process Costing
• Service Costing
• Target Costing
• Cost Volume Profit Analysis
• Operating, Cash and Flexible Budgets; Profit Planning
• Relevant Costing and Decision Making, Pricing Decisions
• Standard Costing
• Reporting Variances

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Course Evaluation

• Assignments 10 marks
• Quizzes 20 Marks
• Mid-term Examination 30 Marks
• End-term Examination 40 Marks

Total 100 Marks

How to Study this Course


• A practical approach
• Take notes and read. The powerpoints are only a high-level list of contents
• Ask any questions and clarify all doubts
• Attendance is less important than Attention and Attitude
• Reverse Hotel California: you can’t check in anytime you like, but you can
always leave. Don’t be late for class.

• Drop by: visiting hours are 3 – 6 PM, with prior email


• No re-quizzes or mark revisions

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Let’s Revise

The Basics

1. The five types of accounts and their treatment

2. The final accounts

3. Accounting principles

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Accounting Principles
1. Monetary unit principle (Money Measurement principle)
2. Dual-aspect concept
3. Economic entity principle
4. Going concern principle
5. Cost principle
6. Time period principle
7. Accrual principle
8. Revenue recognition principle (Realization principle)
9. Matching principle

Accounting Principles
10. Conservatism principle

11. Consistency principle

12. Full disclosure principle

13. Reliability principle

14. The principle of substance over form

15. Materiality principle

16. Cost benefit constraint

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