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Financial reporting system is any system that compiles financial data and presents it to management in a meaningful format. There are different types of such systems, depending on the system's purpose. So a company can have a one system to assist with financial accounting, and another that delivers managerial accounting outputs. A system that delivers financial statements needs to use generally accepted accounting principles (GAAP), so there is little choice with respect to formatting, only the rules that the company choses to adhere to.
With managerial accounting, however, there are a number of different systems that can be used. This is where the design of the reporting system comes into play, because the design of the system is what ensures that management will receive from the system the information that it needs. Each systems contains different components, including methods of reporting, different measures that are used, and methods of presentation. These differences reflect the different types of data that are recorded, how...
As a couple of examples, there is an activity-based budget and there is an operating budget.
The operating budget is a fairly basic form of budget document. Tatum (2013) notes that an operating budget is one that "focuses on managing current expenses" but that it also might contain provisions for future expenses, since as with all budgets it is a forward-looking document. The operating budget is aggregate for the entire organization, and seeks to determine the funding level that the organization needs for a future period. The operating budget can then also be used to determine ways to reduce expenses, and to identify areas where expenses are growing at an undue rate.
An activity-based budget is a "method of budgeting in which the activities that incur costs in every functional area are recorded and their relationships are defined and analyzed" (Investopedia, 2013). What this means is instead of budgeting for the entire organization, each activity…
Works Cited
Tatum, M. (2013). What is an operating budget? WiseGeek. Retrieved February 28, 2013 from http://www.wisegeek.com/what-is-an-operating-budget.htm
Investopedia. (2013). Activity-based budgeting. Investopedia. Retrieved February 28, 2013 from http://www.investopedia.com/terms/a/abb.asp#axzz2MDztY2yw
Therefore, the fixed overhead charge would otherwise be applied to other orders in their system. The order utilizes the capacity and contributes a positive net cash flow of $2,500, even though the overhead charge renders it unprofitable in the accounting sense. In determining whether or not Sport Cardz should take the order, they must consider cash flow rather than accounting profit. If they did not take the order, the overhead
Bush, who declared that corporations which jeopardized the investments and jobs of millions of individuals should pay their dues. The United States Senate and the House of Representatives also became involved and proposed numerous modifications. The pillar of the changes occurred in financial reporting after the accounting scandals is based on increased transparency and more support in conducting audit operations. The XBRL system for instance will allow the Securities and
SAP'S EXTERNAL FINANCIAL REPORTING SAP External Financial Reporting SAP's external financial reporting History of SAP SAP has a proud 40-year history that is founded on their mantra of innovation. Their success has come from their innovative culture. The company was founded in 1972 when five like-minded former IBM employees came together and created a company with the vision of providing clients with technological innovations. The company was called Systemanalyse und Programmentwicklung (SAP) which was
S. GAAP," 2012). In other circumstances, IFRS requires the combination of two or more transactions when they are linked in a manner that the commercial impact can only be understood through referring to the transactions as a whole. Customer Loyalty Programs: Under IFRS accounting standards, loyalty or award programs in which a customer earns credit depending on their purchase of goods and/or services should be accounted for as multiple-element arrangements. Therefore, these
International Financial Reporting Standards (IFRS) Generally Accepted Accounting Principles (U.S. GAAP) US GAAP is the general accounting principles, standard, and procedures that the U.S. companies follow to prepare their financial statements. GAAP has combination of accepted standards that the companies should follow when recording and reporting their accounting information. For example, GAAP has set up the rules that companies should follow when preparing the financial data such as balance sheet, revenue recognition,
Ebay financial reporting eBay Corporation: Financial Reporting The current market trend in the American business world shows that many businesses are making the switch to the fair market value of accounting for employee stock options. The Journal of Accounting Research defines fair market accounting as accounting for the fair value, or price, of an asset or liability based on the current market price of that asset or liability, or for similar assets