Interview 335 Essay Example | Topics and Well Written Essays - 750 words

Interview 335 - Essay Example few Indians among other members from the European continent together making a total of about forty two tribes with the Kikuyu community being of the largest group occupying the central parts of the country and the El- mole people living around the shores of one of the great rift valley lakes, lake Turkana, are the smallest tribe. Kenya is among the few in the world which houses the Great Rift Valley, a broad natural feature which laterally transect the country into two on the eastern and the western sides of the rift valley. This paper will present the findings of an interview I carried out with one of the Kenyan citizens in America on how far they have gained the awareness and skills in dealing with global diversity and cultural variances as well as my development in understanding of technologys impact on the development of world societies and cultures based on the interviews. Kenya is among the developing countries of the world just emerging from the fierce throngs of economic dismay since independence. Most people in the country therefore have poor economic backgrounds with only a few rich families dotted amidst the poor majority. Like any other poor countries in Africa and the world, wealth in Kenya is contained just in the hands of a few people who are considered rich while the rest are languishing in abject poverty with a majority of the populations living under the wages which are below one dollar per day. The main economic activity carried out in the region and from which most families earn their daily wages is agriculture, mostly sedentary, which forms the backbone of the country’s economy. Most people therefore depend entirely on their farm produce as the sole source of their everyday food and which supplement their meager income sources. Most of the needs in most families are therefore met from the sales of agricultural produce. A few peo ple practice business as an alternative source of income, mainly among the Indians who depend entirely on business

Legal Thought Module Essay Example | Topics and Well Written Essays - 2000 words

Legal Thought Module - Essay Example The problem however is that despite such inefficiencies, the construction of walls is still being witnessed and is increasingly becoming popular. These walls sit on the national boundaries but the things they are meant to cater for are decentralized, transnational and dispersed2. This explains why they have proved to be very inefficient when it comes to achieving their objectives. The ideology of globalization which is dominant in the world today advocates for a world without boundaries in order to give room for humanitarian interventionism, free markets, universal democracy and global governance. The continued construction of walls is however headed in the opposition direction but still hasn’t managed to deter the prosperity of globalization. This construction is only a simple of anachronism because the walls are unfashionable given the urge for cooperation and interdependence among states. In the current state of affairs where globalization reigns through disregarding the st ate boundaries, one wonders what is happening to sovereignty of nation states. State sovereignty is still existent as globalization hasn’t done away with it. In fact globalization cannot exist without the support of the states because it is reliant on states when it comes to matters like security and law enforcement. Bonnie Honig has also addressed this issue as she wonders whether democracy would still be existent in a world without countries, nations or citizenship3. This is a problem that is associated with globalization because solutions on how to deal with the problem of foreignness must be found for the ideology of globalization to be fruitful and... Globalization entails the increment in volume and velocity flow both within and across the borders. Ideas, people, goods, greenhouse gases, viruses, drugs, weapons, emails, dollars and good deals often traverse borders moving either way. They often challenge the fundamental principles of sovereignty like the ability to control what crosses the border in either direction. This explains why some nation states have taken to building walls and formulating strict immigration laws in order to check on these movements. Sovereign states often measure the intensity of their vulnerability through the forces that are beyond their control and there are many at that. With globalization, sovereignty is weakening and will continue to do so in order to have a safe haven that sovereignty can no longer guarantee in the current globalized world. It is no longer possible to build walls to keep away ideologies and people because this has already proven to be ineffective. Even keeping away foreigners and denying them some democratic rights will not yield the desired results. The way forward, therefore, is to adopt the new world order and come up with new ways of dealing with the current challenges. There is need to redefine the concept of sovereignty because nation states can no longer do things just for the sake of it even if they are harmful to the well being of the rest of us. For instance, when America realized that the Afghan Taliban government was supporting the Al-Qaeda, it reacted by removing it from power.

Progressive Era Essay Example for Free

Progressive Era Essay The progressive era was a thirty-year period in which the United States was completely reformed. Actions were taken to improve working conditions for laborers and women. President Roosevelt and Wilson were both reformers for the rights and voice of the people. Theodore Roosevelt used his presidency to put regulations of businesses and make sure the government is still higher than corporations. Individual Reformers and the government in the progressive era went through a great deal to bring about change in the united states, with teddy Roosevelt’s trust-busting and political reform, improvement of laborers and goods, and the restrictions of child labor and women rights. Teddy Roosevelt became known as the great trustbuster. He didn’t get this name for no reason. Roosevelt could identify which trusts were good and which were bad. He could determine which trusts helped the people and which ones hurt them. Roosevelt would hunt down the bad trusts and take them down. He would destroy the bad trusts and restrain the good trusts from becoming bad trusts. Roosevelt believed that the government should police the corporations of America. (A). He took the Sherman Anti-trust act and enforced it so that companies could price their products and make sure not one company could not take control of the market. He did this by creating the Clayton anti-trust act to keep regulations on anti-competiveness. (E) Roosevelt also believed in changing the ways that politicians were elected. Senators in particular were being corrupted because officials were appointing them. He believed that the US senate was just a club basically for high privileged people. This lead to the passage of the seventeenth amendment which said that direct election of senators was to be the new way of choosing who would be in the US Senate. (D) This amendment got the people involved even more with politics and gave them more of a say in government. Politically the government was reformed with the US senate, and the trust busting and making sure that the government was a police force to big corporations. Laborers in the progressive era had it rough. They were not treated with respect, or the consideration that they deserve. The goods that were produced were not of quality and contained harmful hazardous materials. Upton Sinclair was a muckraker who wrote The Jungle, a book about the horribleness of the meatpacking industry. The meatpacking industry was a brutal and unsanitary way of life. The people who worked in the industry were subjected to disease such as tuberculosis and terrible working conditions. The workers were ignorant of the relationship of disease and cleanliness. They didn’t understand that a working condition should be clean and not filled with disease. A lot of the workers had tuberculosis while they worked, and it would get in the meat that they work with, which provided for unsafe meat for people to eat. (B) In other businesses it was just the same. Labors were never treated fairly. Up until recently laborers were not even allowed to go on strike. The government was not helping people; they were staying out of business affairs. Up until the age of reform, and the progressive era. The government was then trying to help out laborers and give them rights. Child laborers and women’s rights were also two big things that came up during the progressive era. Children were expected to work alongside grown men. They were subjected to the same harsh conditions as the adults. Children were not able to be educated because they had to work in the factories. A lot of children only went to school for a short time. The educators acted as if the industrial work was good for children. So children had to go through terrible disease ridden conditions of work. C) The children were not helped by the case of Hammer vs. Dagenhart which ruled that child labor is not a government problem; it is to be judged by the state legislatures. Even some parents felt like it was their kids duty to work, and that the children should work. (G) Eventually however the children were set free from the bondage of labor. But women were still subjected to discrimination. Women at this time didn’t have very many rights. Women want to be treated equally and to have a say in government. Women suffrage was big at this time. They felt like they could not do anything with the life that they had. So they pushed for reform, which was not happening at this time. It was unusual since the progressive era was a big reforming time. (H) The progressive era was a time of great change for the US. It came in the political with the trust busting and the senate voting, it came in the improvement of laborers, and it came in the way child laborers were treated and the women movement. The progressive era was big and it made people really understand what the US was all about.

Systems Theory And Change Management Information Technology Essay

Systems Theory And Change Management Information Technology Essay Change Management is important for any business transformation like new technology implementation, merger or acquisition. A common framework breaks down change management into three stages: Freeze, Change, and Unfreeze. This paper explains the concept of change management and relate it to the concepts in general systems theory. The case study on an organization is based on my experiences while implementing the change management. This case study is my understanding and analysis of the respective organization as a system of people, process and technology. This analysis will help students and change management consultants to broaden their view and correlate the general systems theory for effective change management. Whenever we have a business transformation within an organization, it impacts the process, the people and technology (Larkin, 2003). Change Management emphasis on the people side of change. Mc Kinsey and Company recently surveyed 1546 business executives from around the world, asking them if they consider their change program completely/mostly successfully: Only 30 percent agreed (Isem, Joseph and Pung, 2006). The change management approach for an organization was based on three stages: Freeze, Change, Unfreeze (Nickols, 2007). The key to the success of a change initiative is to access the previous changes and implementing the change by learnings from previous experiences and by avoiding repeating errors. To analyze the organizations readiness for a change we interact with the people who are responsible and are part of this change. In this paper we will discuss how the steps followed in change management to implement a change are also explained by Bertalanffy in General Systems Theory. We will discuss my experiences to access organizations readiness for change and correlate them with General Systems Theory. Systems Theory would enhance the understanding of an organization that would help to implement an effective change management. II. Theoretical Background: Change Management in Organizations. The first and foremost definition of change management refers to the making of changes in a planned and managed or systematic fashion (Nickols, 2007). A change within an organization could be a business transformation like implementation of new technology, merger or acquisition, layoffs etc. These changes not only affect the process and technology of an organization but also the people affected by this change. A business process transformation impacts the process, people and the technology (Larkin, 2003). Change management concentrates on the people side of change. Change Management is a process through which an organization can achieve its objective. In a conventional approach the various steps through this journey may be delineated but change management facilities to align these steps in a systematic manner to achieve success. It has not been determined whether change management is an art, science, a profession or a discipline. It is more likely composed of a little of each and a totally separate entity in itself (Ledez, 2008). It is a process through which we can predict the success of a change initiative by assessing the readiness of the organization towards change and then implement strategies to achieve the transition from the present scenario to the final transformation. Another definition of change management refers to the efforts it takes to manage people through the emotional ups and downs that inevitably occur when the organization is undergoing massive change (Sieber, Nah, 1999). With the increase in competition and technology it is necessary for an organization to initiate business transformation. The most crucial stage in the change management methodology is Freeze. As a change management consultant my focus was based on assessing the organizations readiness for change. To analyze the organizations readiness for change, we assess the change history, cultural conduciveness of the organization and the overall perception of the senior management towards this change initiative. Systems Theory and Systems Thinking. Systems Integrity is one of the underlying concepts of systems theory emphasizes on understanding the intricacies of a system before making any changes to it. A system becomes more complex with the advancement of technology. As the systems become more complex it is imperative to understand the system as a whole and the interactions within the system. Systems theory focuses on the relationships between parts and the properties of a whole, rather than reducing a whole to its parts and studying their individual properties (Ackoff, 1971). A system is defined as an entity which maintains its existence through mutual interactions of its parts (Bertalanffy, 1976). The interactions within a system occur due to its hierarchical order. The different sub-systems within a system have a particular role to play within a larger system of which it is a part (Sanford, 2004). The underlying structure of which is a nested hierarchy of increasing orders of complexity (Sanford, 2004). Ackoff believes that a systems theory concept approach is fundamental to the study of organizations, so he translated von Bertalanffys original definition of a system to organizational context (Chun, Song, Arling, Granados, 2008). A system is composed of subsystems that interact with each other. At any given time, a system or its subsystems exhibits a state, defined as its current properties or characteristics (Chun, Song, Arling, Granados, 2008). A change in the state of a system is called an event (Chun, Song, Arling, Granados, 2008). In simple terms, an event is any observable occurrence. The behavior of a system can be regarded as an event. Behaviors are events that initiate other events(Chun, Song, Arling, Granados, 2008). For example, providing incentives to the employees is a behavior that will cause another event to motivate the employees. A process is a sequence of behaviors within a system that can lead to reach its final goal (Chun, Song, Arling, Granado s, 2008). This is also related to the concept of equifinality. Equifinality is an idea that suggests that in an open system a similar result may be achieved in many different ways (Cumming, Worley, 2005). Any system that interacts with the external environment is an open system. The open systems interact with the sub-systems within or external environment through feedback mechanism. The final goal or objective of a system can be achieved by the various subsystems in an open system through different ways, paths or procedures. This concept of an open system is called Equifinality. Towards a Systems Theory approach in Change Management. The backbone of change management is composed of a variety of hard and soft sciences drawn upon psychology, sociology, business administration, economics, industrial engineering, systems engineering (Nickols, 2007). It is imperative to study the long term cultural and behavioral patterns of a system to analyze the scope of change within that system. Change Management theory includes a series of models, beliefs, concepts and principles known as General Systems Theory (Nickols, 2007). The concepts of systems theory enhances the effectiveness of change management in an organization. We will now describe the research methodology and the case study of the company where I implemented change management. Lets call that company as LSD (hypothetical name). III. RESEARCH METHODOLOGY: CASE STUDY The organization as a whole can be considered as a system with various departments within the organizations acting as subsystems interacting among each other and the outside world. The people within an organization are the integral part of this system. Change is also a psychological even and any organizational change may involve some real and perceived threat of personal loss for the people involved. This event may lead to the resistant behavior by the people involved in the change initiative. The success of a change program can be brought about by appropriate connections of many activities related to human behavior. Change management in all about predicting the future. To analyze and predict the success of a change initiative within an organization we need to assess the long term patters or history and behaviors of events within the organization. Current State Assessment consisting of evaluation the change history and assessing the Cultural Conduciveness for the change will provide suggestions how to manage the change within the organization. Organizational readiness assessment will help LSD to determine how prepared they are for the future. Current State Assessment and Organization Readiness Assessment were based on the following inputs- (1) Discussions/ Interviews with the top management, (2) Dialogue with the Core Team i.e. people working on the new technology, (3) Workshops and Questionnaire administration among the key stakeholders i.e. people who are either affected by the change program or can have an impact on the successful implementation of the change program, (4) Workshops and Questionnaire administered to the Core Team , (5) Questionnaires administered among the larger work force across all the offices in the country. Workshops were conducted to sensitize the stakeholders about the importance of the change initiative (ERP implementation) prior to the questionnaire administration. In all 90 responses were collected from all the departments and offices across the country. Also a variety of designations ranging from C-Level executive to lower staff , were covered to gain a comprehensive understanding of LSDs Change History , Culture and Organizational Readiness. IV. CHANGE MANAGEMENT AT LSD LSD is one of the leading government organizations in the power and energy sector. The organization has around twenty three offices across the country with four head offices in metropolitan cities. With the growth and expansion in the last twenty years the company is deciding to switch from the paper-work procedure to ERP implementation. This implantation will streamline and shorten their business processes to cope with the industry standards and competition. I was part of this change management team that facilitated this challenging transformation. Out team included four third-party change management consultants and ten change agents across the organization. These change agents were the employees who were influential within LSD. Applying Systems Theory to Change Management at LSD. We will now correlate the methodologies used by us in change management with the concepts in systems theory and systems thinking. The approach we used to implement this change included both the quantitative analysis (i.e. by administering questionnaire and analyzing the scores) and qualitative analysis (i.e. by conducting interviews and workshops with the employees). In the change readiness assessment we included the survey from all the employees across the country that would be part of this change program. All these employees are part of the whole change management system and relates to the concept that the focuses on the relationship between parts and the properties of a whole (Ackoff, 1971). Change History Assessment. We assess the history of the previous changes within the organization to understand the system better before altering it. The analysis of previous history data will provide us with the previous trends, patterns or behavior of the system. This helps a change management consultant to predict the system better in case of any future changes and manage the system accordingly. The parameters used in the change history assessment are:- Stakeholder Identification and Commitment It is imperative for us to include all the people as a subsystem to interact within the system as a whole. Resistance Analysis and Management The change from one event to another may cause some change in behavior. When we consider the people as part of a system, changes in human behavior is also predominant. Resistance analysis is to gauge the human behavior within our system. Benefits Identification and Management This is one of the parameters that play a very important role in a balancing process. The change management approach is a goal-seeking process that tends to reach the equifinality. The various departments and the people across the organization work together to reach the final change. The resistance from the employees may imbalance the system and diverge it to reach the final goal. Benefits Identification and management is a balancing act to make the resistant employees realize the benefits for them from this change initiative. This will lead the whole system to balance and reach the objective. Communication effectiveness This is also an important variable in any change management process. As the organizations become more complex and large the effectiveness of communication is a challenge. The more effective is the communication, the more aware and supportive the employees are. We can also explain this balancing process through the diagram below: Cultural Conduciveness: Culture is something that is difficult to define accurately, but everyone knows when they sense it. The pattern in the culture helps a change consultant to sense the mindset of the organization. The culture of the organization was assessed on the basis of the following parameters like trust , team work, openness , interpersonal learning , respect for the individuals , organizational support , rewards and recognition. After realizing the problem areas from previous history assessment, we had interviews with the stakeholders to understand the story of the problem. These interviews provided very useful information on the viewpoints of the employees with respect to this change initiative and their perspective on the culture of the organization. This helps the change management consultant to be a part of the system and sensitize to the structure of the organization. The key findings of my project were: The culture for rewards and recognition was less prominent and didnt motivated employees to be enthusiastic about any developments within the organization. The lower level employees felt alienated by the senior level executives. The communication and trust between the senior and lower management was missing. This lead to dissatisfaction among the lower level and they never took in the organization activities.

HealthCare Bottleneck Relief Essay -- essays research papers

Many health-care industry bottlenecks can be eliminated, resulting in major improvements in efficiency, cost savings and patient care when hospitals borrow principles from production lines on the factory floor, according to researchers in the School of Engineering and Applied Sciences at the University at Buffalo. At UB's Center of Excellence for Global Enterprise Management, Li Lin, Ph.D., professor of industrial engineering, and his colleagues apply industrial-engineering tools, including Six Sigma and other lean enterprise methodologies originally developed for manufacturing processes, to improve the operations and competitiveness of hospitals. "In today's competitive environment, especially with the severe shortage of skilled nurses, the pressure on streamlining hospital operations continues to increase," said Lin. "Health-care managers are seeking new perspectives and creative ways to manage their business. We can engineer medical services with improved cost, quality and efficiency." Lin and his colleagues use animated computer simulations that are based on statistical analyses -- routinely used to model the flow of parts through complex manufacturing processes -- to uncover the bottlenecks or potential problem areas in health-care facilities. "What do cars on highways, manufactured parts in a factory and patients in a hospital have in common?" he asks. "They all move. We use computer simulations to analyze how patients flow through hospitals, while ensuring that th...

Linda Mcquaigs Shooting The Hippo: Causes And Results Of Debt :: essays research papers fc

Linda McQuaig's Shooting The Hippo: Causes and Results of Debt Linda McQuaig's most recent book, "Shooting the Hippo" is about the causes and results of the debt. It is a look at both the factual causes and the arguments which are merely presented to us through the various elements of the media. McQuaig delivers an insightful overview of the extensive media coverage which has bombarded us over the past few years. "With the excitement of a mystery writer, McQuaig tells the real story behind the debt." . This book explains the history of the deficit myth, and enables people such as myself who are not experienced in these types of problems to get to the heart of the arguments presented so frequently about our financial situation. I found her book an inspiration which will hopefully help us all to devote ourselves to the enormous challenge which we will face in the future. We are responsible to inform and educate ourselves, our friends, our families and neighbours in the difficult days ahead. To explain McQuaig's title I'll briefly describe the beginning of the "mystery." A baby hippo, born in a zoo, is to be shot because of recent government cutbacks which leave nothing to feed or care for the hippo. This image grabs the attention of the reader and leads to numerous other examples which McQuaig uses to break down the popular myths about the deficit. McQuaig, determined to expose one by one, several of the current myths about the state of the Canadian economy, backs up her arguments with interviews and publications. These include: a chief statistician at Statistics Canada who has been working on the statistics of social spending since the middle '60s; the man at Moody's bond rating service in New York who is in charge of setting the credit rating on our federal debt; and noted economists, among others. The book goes on in its investigation as to why the recession in Canada was the worst of the world's most powerful nations. It is noted that if there is a simple way to explain the reason for most of the recession then it will in turn account for most of the increase in the debt. McQuaig also presents a bit of history of banking, monetary systems, and the struggle of the conflicts between the rich minority and the rest of us. All of this is presented in a very readable and interesting manner. McQuaig asks an intriguing question to all of us. Are we prepared to see our social programs sacrificed in order to reduce the deficit?

Financial Accounting 3 Summary

CHAPTER 1: FINANCIAL STATEMENTS Financial Statement – the means by which the information accumulated and processed in financial accounting is periodically communicated. General purpose financial statements -PAS1 prescribes to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities. -statements intended to meet the needs of users who are not in a position to require an entity to prepare reports tailored to their particular information needs. Components of financial statements 1. Statement of financial position 2. Income statement 3. Statement of Comprehensive Income 4. Statement of Changes in Equity 5. Statement of Cash Flows 6. Notes comprising a summary of significant accounting policies and other explanatory information objectives of financial statements -to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions. General features of financial statements Going Concern An entity preparing PFRS financial statements is presumed to be a going concern. If management has significant concerns about the entity’s ability to continue as a going concern, the uncertainties must be disclosed. If management concludes that the entity is not a going concern, the financial statements should not be prepared on a going concern basis, in which case PAS1 requires a series of disclosures. Accrual Basis of Accounting PAS1 requires that an entity prepare its financial statements, except for cash flow information, using the accrual basis of accounting. Materiality and Aggregation Each material class of similar items must be presented separately in the financial statements. Dissimilar items may be aggregated only if they are individually immaterial. Offsetting Assets and liabilities, and income and expense, may not offset unless required of permitted by a Standard or an Interpretation. Frequency of Reporting An entity shall present a complete set of financial statements at least annually. Comparative Information PAS 1 requires that comparative information shall be disclosed in respect of the previous period for all amounts reported in the financial statements, both face of financial statements and notes, unless another Standard permits or requires otherwise. Consistency of Presentation The presentation and classification of items in the financial statements shall be retained from one period to the next unless a change is justified either by a change in circumstances of requirement of a new PFRS. Measurement of elements process of determining the monetary amounts at which the elements of FS are recognized and carried in the statement of financial position and income statement. Measurement base on financial attributes 1. Historical cost- amount paid or the face value of the consideration given to acquire assets at the time of acquisition. 2. Current cost- amount that would have to be paid if the same or an equivalent asset was acquired currently. 3. Realizable value- am ount that would currently be obtained by selling the asset in an orderly disposal. 4. Present value- discounted value of the future net cash inflows that the item is expected to generate in the normal course of business. CHAPTER 2: STATEMENT OF FINANCIAL POSITION The Statement of Financial Position Elements Asset An asset is a resource controlled by the entity as a result of the past events and from which future economic benefits are expected to flow the entity. Liability A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. Equity Equity is the residual interest in the assets of the entity after deducting all its liabilities. Statement of Financial Position Presentation An entity must normally present a classified statement of financial position, separating a current and noncurrent assets and liabilities. Only if a presentation based on liquidity provides information that is reliable and more relevant may the current/noncurrent split be omitted. In either case, if an asset (liability) category commingles amounts that will be received (settled) after 12 months, note disclosure is required that eparates the longer-term amounts from the 12-month amounts. An asset shall be classified as current when it satisfies any of the following criteria: * It is expected to be realized in, or is intended for sale or consumption, in the entity’s normal operating cycle; * It is held primarily for the purpose of being traded; * It is expected to be realized within 12 months after the reporting period; or * It is ca sh or a cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets shall be classified as noncurrent. A liability shall be classified as current when it satisfies any of the following criteria: * It is expected to be settled in the entity’s normal operating cycle; * It is held primarily for the purpose of being traded; * It is expected to be settled within 12 months after the reporting period; or * The entity does not have an unconditional right to defer settlement of the liability for at least 12 months after reporting period. All other liabilities shall be classified as noncurrent. Long-term debt expected to be refinanced under an existing loan facility is noncurrent, even if due within 12 months. If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the balance sheet date, the liability is current, even if the lender has agreed, after the balance sheet date and before the authorization of the financial statements for issue, not to demand payment as a consequence of the breach. However, the liability is classified as non-current if the lender agreed by the balance sheet date to provide a period of grace ending at least 12 months after the balance sheet date, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment. When an entity presents current and non-current assets and liabilities as separate classifications on the face of the BS, it shall not classify deferred tax assets (liabilities) as current assets. CHAPTER 6: ACCOUNTING CHANGES Changes in accounting estimate A change in accounting estimate is a normal recurring correction or adjustment of an asset or liability which is the natural result of the use of an estimate. Examples of accounting estimate a. Bad debt b. Inventory obsolescence c. Useful life, residual value, and expected pattern of consumption of benefit of depreciable asset. d. Warranty cost e. Fair value of financial assets and financial liabilities Changes in accounting estimates are to be handled currently and prospectively, if necessary. Prospective recognition of the effect of a change in accounting estimate means that the change is applied to transactions, other events and conditions from the date of change in estimate. A change in depreciation method is accounted for as a change in accounting estimate. Accounting policies -are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements. Changes in accounting policy A change in accounting policy shall be made only when: a. Required by an accounting standard or an interpretation of the standard. b. The change will result in more relevant or reliable information about the financial position, financial performance and cash flows of the entity. Examples of change in accounting policy a. Change in the method of inventory pricing from the FIFO to weighted average method b. Change in the method of accounting for long term construction contract. c. The initial adoption of policy to carry assets at revalued amount d. Change from cost model to fair value model in measuring investment property and property, plant and equipment e. Change to a new policy resulting from the requirement A change in accounting policy required by a standard or an interpretation shall be applied in accordance with the transitional provisions therein. If the standard or interpretation or transitional provisions or if an accounting policy is changed voluntarily, the change shall be applied retrospectively. Retrospective application means that any resulting adjustment from the change in accounting policy shall be reported as an adjustment to the opening balance of retained earnings. The amount of the adjustment is determined as of the beginning of the year. Prospective application means that the new accounting policy is applied to events and transactions occurring after the date of change. Change in reporting entity A change in reporting entity is a change whereby entities change their nature and report their operations in such a way that the financial statements are in effect those of a different reporting entity. CHAPTER 7: INTERIM FINANCIAL REPORTING Interim report is a financial reporting period shorter than one financial year. Components of an interim financial report a. Condensed statement of financial position . Condensed income statement c. Condensed statement of comprehensive income d. Condensed statement of cash flows e. Selected explanatory notes Under PAS 34, paragraph 28, the general rule in preparing interim financial statements is that costs and expenses that clearly benefit more than one interim period are allocated to the interim periods affected. Inventory loss from market decline is reported in the interim period in w hich the decline occurs. Recovery of such loss on the same inventory in later interim period is recognized as gain in the later interim period. However, any gain on reversal of inventory writedown is limited only to the amount of loss previously recognized. The effects of a disposal of segment of business are reported separately in the interim periods in which they occur. PAS 34, paragraph 39, provides that cost incurred unevenly during a financial year shall be anticipated or deferred for interim purposes only if it is also appropriate to anticipate or defer such cost at the end of the financial year. Gains should be recognized in the interim period in which they are realized. The cumulative effect of change in accounting policy is shown in the statement of retained earnings, not in the income statement. CHAPTER 8: OPERATING SEGMENT Under PFRS 8, an entity shall disclose information about an operating segment that meets any of the following quantitative thresholds: 1. The segment revenue, including both sales to external customers and intersegment sales or transfers, is 10% or more of the combined revenue, internal and external, of all operating segments. 2. The segment profit or loss is 10% or more of the greater of the following: a. The combined profit of all operating segments with profit b. The combined loss of all operating segments with loss 3. The assets of the segment are 10% or more of the combined assets of all operating segments. Under PFRS 8, paragraph 13, segment revenue includes sales to external customers and intersegment sales of operating segments engaged solely in manufacturing. Revenue includes both sales to unaffiliated customers and intersegment sales. Under PFRS 8, paragraph 15, the total external revenue attributable to reportable operating segments must be at least 75% of the total entity external revenue. General corporate expenses are not allocated to operating segments as a measure of profit or loss. If the total external revenue attributable to reportable segments constitutes less than 75% of the entity external revenue, additional segments shall be identified even they do not meet the 10% quantitative threshold until 75% of the entity external revenue is included in reportable segments. Moreover, reportable segments that are below the10% threshold can be aggregated as one segment if they have similar economic characteristics and share a majority of the five aggregation criteria as follows: a. Nature of product b. Nature of production process c. Class of customer d. Method of distributing product e. Regulated environment CHAPTER 9: CASH AND ACCRUAL BASIS Method of Accounting. 1. Cash Basis- Income is recognized when received regardless of when earned, and expense is recognized when paid regardless of when incurred. 2. Accrual Basis- Income is recognized when earned regardless of when received, and expenses are recognized when incurred regardless of when paid. Computation of sales under accrual basis Cash Sales XX Sales on account: Trade accounts and notes receivable XX Collection of Trade accounts and notes receivable XX Sales returns, allowances and discounts XX Accounts and notes receivable write off XX Trade notes receivable discounted XX Total XX Less: trade accounts and notes receivable,beg XX Total Sales XX Computation of Purchases under Accrual Basis Cash Purchases XX Purchases on account XX Trade accounts and notes payable,end XX Payment of Trade accts and Notes payable XX Purchases return, discounts & allowances XX Total XX Less: Trade accts and notes payable,beg XX Total purchases XX Income other than sales Income received XX Add: Deferred income- beg XX Accrued income- end XX Total XX Less: Deferred income- endXX Accrued income- begXX XX Income for the current year XX Expenses in general Expenses paid XX Add: prepaid expenses- beg XX Accrued expenses- end XX Total XX Less: Deferred income- endXX Accrued income- beg XX XX Income for the current year XX Prepaid expenses are expenses paid in advance but not yet incurred. These are assets. Accrued expenses are expenses already incurred but not yet paid. These are liabilities. CHAPTER 10: SINGLE ENTRY Single Entry System A system of record keeping in which transactions are not analyzed and recorded in the double entry framework is called a single entry system when the records are said to be incomplete. CHAPTER 11: ERROR CORRECTION Prior Period Errors Prior period errors are omissions from, and misstatements in, an entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that was available and could reasonably be expected to have been obtained and taken into account in preparing those statements. Such error result from mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretation of facts, and fraud. Prior period error shall be corrected by retrospective restatement, meaning, if comparative statements are presented, the prior year statements are restated to correct the error. Types of Errors a. Statement of financial position errors *affect the statement of financial position and real accounts only, meaning, the improper classification of an asset, liability and capital account. b. Income Statement errors * affect the income statement or nominal accounts only, meaning, the improper classification of revenue and expense account c. Combined statement of financial position and Income statement errors * affect both the statement of financial position and income statement ecause they result in a misstatement of net income If it is impracticable to determine the period specific effect of an error on comparative information for one or more prior periods presented, the entity must restate the opening balances of assets, liabilities, and equity for the earliest period for which retrospective statement is practicable (which may be the current period) Further, if it is impracticable to determine the cumulative effect, at the beginning of the current periods, the ent ity must restate the comparative information to correct the error prospectively from the earliest date practicable. CHAPTER 12: STATEMENT OF CASH FLOW Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Cash flows are inflows and outflows of cash and cash equivalents. Operating Activities are the principal revenue-producing activities of the entity and other activities that are not investing or financing activities. Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalent. Financing activities are activities that result in changes in the size and composition of the contributed equity and borrowings of the entity. *Interest and dividends received and paid may be classified as operating, investing, or financing cash flows, provided that they are classified consistently from period to period. Interest paid – usually operating; alternatively financing Interest received – usually operating; alternatively financing Dividends received – usually operating; alternatively financing Dividends paid – usually financing; alternatively operating FINANCIAL STATEMENT ANALYSIS THE BASIC FINANCIAL STATEMENT ANALYSIS 1. HORIZONTAL OR COMPARATIVE ANALYSIS -represents the differences in absolute amount and in percentage between two periods (i. e. years, quarters, etc. ), two companies, actual and budgeted date, and other bases analyses. Percentage of changes= Amount of change/Base 2. TREND ANALYSIS It extends beyond two years. The purpose of trend analysis is to track down what happened in the past and provide a pattern on what may happen in the coming years. It uses indexes and ratios to simplify the visible complications of numbers contained in financial reports. . THE VERTICAL ANALYSIS (OR COMMON-SIZE ANALYSIS) It gets the proportional component of each of the variables in the financial statements in relation to a chosen base 4. THE FINANCIAL MIX RATIO CLASSIFICATION OF FINANCIAL MIX RATIOS a. Profitability Ratios It measures the ability of the business to generate profit in relation to sales, investments, assets, equities, or common shares outstanding. â⠂¬ ¢RETURN ON SALE = Net Income Net sales †¢GROSS PROFIT RATE = Gross Profit Net Sales †¢RETURN ON TOTAL ASSETS = Net income + Interest expense, net of tax/ average total assets RETURN ON SHE = Net income Ave. SHE b. Growth Ratios -Are indicative of the organization’s potential and attractiveness as an investment option. EARNINGS PER SHARE = Net income – Pref. dividend Ave. common shares outstanding BOOK VALUE PER SHARE = Shareholder’s Equity Ave. shares outstanding c. Liquidity Ratios Liquidity refers to the ability of the business to pay its obligations in cash as they mature. OPERATING TURNOVER = collection period + inventory days INVENTORY TURNOVER = COGS Ave. inventory INVENTORY DAYS = 360/ inventory days RECEIVABLE TURNOVER = Net credit Sales Ave. Trade receivables COLLECTION PERIOD = 360/ ARTO PAYABLE TURNOVER = Net credit purchases Ave. Trade payables PAYABLES DAYS = 360/ payable turnover NET WORKING CAPITAL = Current Assets-Current Liabilities CURRENT RATIO = Current asset/ Current Liabilities QUICK RATIO = Quick Assets/ Current Liabilities d. Leverage Ratios Financial leverage is a measure of risk. DEBT to EQUITY RATIO = total debt Net SHE DEBT to ASSET = Total debt total assets TIME INTEREST EARNED = EBIT interest expense