Financial Accounting and Reporting for Management: a holistic approach

This book, ‘Contemporary Financial Accounting and Reporting for Management’ has been concep- tualized, developed and written as is appropriate for the current scenario and the perspectives which the subject of ‘financial accounting’ consists of. While the basic method of financial accounting has not changed, the environments within which the domains of Financial Accounting operate have been undergoing dynamic changes. Some concepts such as, ‘fair value accounting’ even though old, are gaining renewed and higher impetus. Business entities have on an increasing scale been becoming global and crossing boundaries result- ing in requirement of compliance with different financial reporting frameworks. With more than 120 nations across the world directing / supporting harmonization of financial reporting standards with IFRS, need for convergence has been increasingly felt and accepted. Indian Government is just to announce the effective date of implementation of Ind AS – the equivalent of IFRS. ‘Financial Ac- counting’ is becoming more of a multi-responsibility centre than having just remained as a cost centre. The role of ‘accounting’ in creating value addition to the business entity in terms of reliable financial reporting and management reporting is being recognized from an appropriate perspective. Accounting, which was once carried out only at the location of the business premises has matured to be ‘virtually portable’ accompanied by favorable and unfavorable outcomes. One of the favorable outcomes arises due to opportunities to acquire knowledge of different financial reporting frameworks such as national ac- counting frameworks, IFRS, US GAAP etc. On the other side, the important outcome is increasing threats to availability and integrity of data and thereby resulting in negative impact on reliability of financial reporting of a business entity (eg: Enron, Worldcom and erstwhile Satyam Computers). If one looks at practicing accountants and managers, a transformation is taking place in terms of the need on their part to update the extent of the knowledge both horizontally as well as vertically. In terms of vertical perspective, they need to learn new reporting requirements of frameworks such as Ind AS, IFRS, US GAAP, Companies Act 2013 etc. Horizontally, the accountants need to learn/update spreadsheet skills including that of financial modeling and other computer based interactive skills. Besides, the new developments with respect to reporting requirements expect the people charged with governance of business entities to play a better and higher proactive role, necessitating the members of the Board of Directors of Companies, more so in the case of companies listed in stock exchanges to understand their increasing responsibility, at the macro level. Investing communities, many of whom do not get adequate opportunity to learn about concepts of financial accounting and financial accounting & reporting practices of business entities. Scope of financial accounting & reporting does not end with just preparation of financial statements. Financial reporting cycle gets completed only when financial statements are approved by the shareholders, subsequent to consideration of reports of the Auditors and interpretation of relationships between various elements of financial statements, albeit to a limited extent by the management takes place. I felt that there is a need to explain the process of financial reporting. It is in the above scenario that Students, including Research Students of Management Programme or of Accounting,, Finance, Business Management are learning the subject of financial accounting and reporting. They need to learn state of the scenario of ‘financial accounting and reporting’ to equip themselves to be effective current and / or future managers. Thus, this book is intended to address knowledge and application requiremennts of a wide variety of audience.