Current value accounting - a concept whose time has come
Article Abstract:
Traditionally, assets and liabilities appearing on corporate balance sheets have been stated at their historical cost values. However, historical cost methods misrepresent a company's financial position in times of inflation (when costs continue to rise, but are not shown as such). Cost accounting techniques used to value assets during inflationary times are discussed and explained, including: last-in, first-out (LIFO) inventory valuation methods, as opposed to first-in, first-out (FIFO) methods; discounted cash flow methods; assessment of current replacement expenses; use of qualified appraisals when valuing assets; and capitalization applied to historical or future earnings. Current value accounting states asset values according to market worth in the current market; for example, the business facility is stated at its retail value (as if it were up for sale), rather than at its original cost value (the price the company paid for the facility), which is seen as more accurate given the real estate industry's rising prices.
Publication Name: FE: the Magazine for Financial Executives
Subject: Business
ISSN: 0883-7481
Year: 1985
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Cost accounting in the 1990s: Can production executives and financial executives learn to keep in touch?
Article Abstract:
Technological innovations and automated manufacturing techniques will require financial executives in the manufacturing industries to develop new cost accounting methods. These methods should continue to focus on minimizing production costs; however, to achieve this goal the accounting methods developed will need to assess: quality-related costs, cost-benefit analyses of proposed automation projects, product pricing based upon production costs, and overall factory performance evaluations. Each of these four areas of cost accounting is discussed in detail. In the future, cost accountants will have to understand the new manufacturing techniques if they are going to account for the impact of these techniques on corporate profitability. Cost accountants will therefore have to become more familiar with shop floor activities, rather than continuing to 'number crunch.'
Publication Name: FE: the Magazine for Financial Executives
Subject: Business
ISSN: 0883-7481
Year: 1986
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A prognosis for the new CFO: nineteen critical concerns that are changing the job
Article Abstract:
The chief financial officer (CFO) of the future will have to respond to such changes as new government and tax regulations, revised financing requirements and new interest rates on loans, and increased competitive pressures. In addition to these changes, chief financial officers will have to take a more active role in the company's operations, be more involved in cash flow management, and become familiar with information management technologies. This last requirement may be met by the creation of chief information officers at the corporate level.
Publication Name: FE: the Magazine for Financial Executives
Subject: Business
ISSN: 0883-7481
Year: 1986
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