The SSAP: source of strength or sapper of it?

Article Abstract:

Accountancy has emphasized the validity of financial numbers, as exemplified by the Statements of Standard Accounting Practice (SSAPs), often to the neglect of issues and strategies involved in success and growth. Conformance to the SSAPs may adversely affect the performance of a company. SSAP 16 on inflation was voted out of existence because of its subjectivity. The SSAP on research and development was very conservative and would not allow for much research and development capitalization if there were no immediate, quantifiable benefits. The measurement of goodwill is the inherent value of a company, but the SSAP on this subject concerned only its stringent measurement.

Standards, Professions

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More or less true, quite fair

Article Abstract:

The figuring of profit on a balance sheet is not an objective, reliable measure. Different UK companies and auditors use different definitions of 'a true and fair view' of a company's profits. The United States accounting profession has established a set of Generally Accepted Accounting Principles, but Great Britain does not have such a statement of principles. The current accounting practices fail to show a company's financial strengths and weaknesses, market share, customer satisfaction, and management's goodwill.

United Kingdom, Analysis, Financial statements, Book value (Accounting), Corporations, British

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Increase profit through improved added value

Article Abstract:

Added value (ADV) is the difference between bought out items and sales and is computed by adding four elements: labor costs, depreciation, interest charges and profit before tax. Another way of looking at it is as wealth of the company based on labour, equipment and capital. While some find it a difficult technique to use, largely because of difficulties of stock adjustment, others find it useful information and a tool in industrial relations.

Methods, Measurement, Profits, Value added, Corporate profits

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