CONTENTS
ix
The
role of the Stock Exchange
123
Capital market efficiency
124
Managing a company
126
Financing limited companies
126
Share capital
128
Reserves
130
Bonus
shares
132
Share capital jargon
134
Borrowings
135
Raising share capital
137
Withdrawing equity
142
The main financial statements
145
Dividends
148
Self-assessment question
150
Summary
151
Key terms
152
References
153
Further reading
153
Critical review questions
153
Exercises
154
5 Accounting for limited companies (2)
160
Introduction
160
Learning outcomes
160
The directors’ duty to account
161
The need for accounting rules
162
Sources of accounting rules
164
Problems with standards
167
Accounting rules or accounting choice?
169
The need
for a conceptual framework
170
The IASB framework
171
The auditors’ role
173
The framework of annual financial reports
173
Presenting the financial statements
174
Management commentary
181
Directors’
report
182
Strategic report
182
Accounting standards and accounting policies
185
Creative accounting
189
Self-assessment question
196
Summary
197
Key terms
199
References
199
Further reading
199
Critical review questions
199
Exercises
200
A01 Atrill's Financial Accounting For Decis 51257.indd 9
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6 Measuring and reporting cash flows
202
Introduction
202
Learning outcomes
202
The statement of cash flows
203
Why is cash so important?
204
The main features of
the statement of cash flows
206
A definition of cash and cash equivalents
206
The relationship between the main financial statements
208
The layout of the statement of cash flows
208
The normal direction of cash flows
211
Preparing the statement of cash flows
213
Reconciliation of liabilities from financing activities
222
What does the statement of cash flows tell us?
222
Problems with IAS 7
225
Self-assessment question
225
Summary
227
Key terms
228
Reference
228
Further reading
228
Critical review questions
229
Exercises
229
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