Estimating retirement benefits with spreadsheets: new computer software makes it easier to account for uncertainty
Article Abstract:
Management accountants who are involved in the accounting of retirement benefits can make their work easier by relying on computer spreadsheet technology. Projections from spreadsheets allow management accountants to incorporate magnitude and cost-timing uncertainties that are inherent in retiree benefits plans in the accounting process. As a result, a wide range of potential values for cash flows can be generated. Software products that feature add-in programs for including uncertainty include Microsoft Excel, Lotus 1-2-3 and FuziCalc. Despite the benefits of spreadsheets, however, management accountants should take note that multiple changes in assumptions do not necessarily mean that all possible combinations are considered. In addition, they should realize that the most likely estimate may be obscured if many combinations are tried.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1995
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Tools for dealing with uncertainty
Article Abstract:
Advanced spreadsheet software can be used to replace traditional capital budgeting tools in predicting the likely performance of capital investments. The most common tools, including the compounding formula, the internal rate of return and net present value calculations, assume that their variables are fixed or known numbers and do not allow for variability to incorporate uncertainties, which typify capital investments. A better alternative to these traditional tools is the spreadsheet, which performs sensitivity analysis to help financial managers deal with uncertainty. Through probability distribution, these spreadsheet tools can predict the future performance of capital investments more accurately because it reflects the actual situation more closely.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1997
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Document that spreadsheet!
Article Abstract:
Documentation of spreadsheet models help provide descriptive information on the purpose and use of a given model. It can also serve as a record of the model's history, as a debugging aid, and as a revision aid. Two types of documentation are typically needed: information about the model as a whole and more specific information on key parts of the model. Documentation must be tailored to the needs of the user, the scope of the model, and the possibility of future revision.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1991
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