ACCOUNTING
IBM 1
ARTEVELDE UNIVERSITY OF APPLIED SCIENCES | 22-23
,Chapter 1: Accounting in action
I. Financial accounting in perspective
Bookkeeping: involves recording of economic events only
Internally & externally useful
o Internally: management
o Externally: for authorities to inspect via governmental regulated systems
Three activities of Accounting
o Identifies – Records – Communicates organization’s economic events to
interested users
Financial accounting ≠ financial reporting
1. Financial accounting: keep track of expenses
o More than debit & credit
o Basis for different reporting’s
2. Financial reporting: summary records (balance sheets…)
Prudent
reporting
Bank & insurance data
information reported to
national bank
Sent to government for
insight on risks Cost accounting
Applied on top of abc
Tax reporting accounting
Specific principles
Amount of corporate tax
paid to government Used to know what
products
starts from debit &
increase/decrease profit
credit
& loss
For running daily
business
Financial
accounting
Financial Management
reporting reporting
Management
accounting
1
, 3. Annual reporting
o All companies obliged to make it
o Different names used to label content
Shows how management views company
o ‘Jaarrekening’: only exists in Belgium – yearly overview for taxes
Stakeholder ≠ shareholder:
Stakeholder: anybody interested in x company
Shareholder: all owners of x company (investors…)
Equity: value of shares issues by a company
II. Financial reporting
Standard form needed because everyone looks at reports from a different
perspective
Provides information about financial position, financial performance & cash flows
Report towards all stakeholders
o Financial performance
o Sustainability
o Risk management
o Corporate governance
o (Consolidated) financial statements
o Other information
Information published in financial report consulted by different groups of users
External & internal users:
o External:
(Potential) investors
Equity holders, granting loans, purchasing debt securities issued
Suppliers
Competitors
Trade union/ employees
Customers
Investors (owners) and creditors (banks & suppliers):
2
IBM 1
ARTEVELDE UNIVERSITY OF APPLIED SCIENCES | 22-23
,Chapter 1: Accounting in action
I. Financial accounting in perspective
Bookkeeping: involves recording of economic events only
Internally & externally useful
o Internally: management
o Externally: for authorities to inspect via governmental regulated systems
Three activities of Accounting
o Identifies – Records – Communicates organization’s economic events to
interested users
Financial accounting ≠ financial reporting
1. Financial accounting: keep track of expenses
o More than debit & credit
o Basis for different reporting’s
2. Financial reporting: summary records (balance sheets…)
Prudent
reporting
Bank & insurance data
information reported to
national bank
Sent to government for
insight on risks Cost accounting
Applied on top of abc
Tax reporting accounting
Specific principles
Amount of corporate tax
paid to government Used to know what
products
starts from debit &
increase/decrease profit
credit
& loss
For running daily
business
Financial
accounting
Financial Management
reporting reporting
Management
accounting
1
, 3. Annual reporting
o All companies obliged to make it
o Different names used to label content
Shows how management views company
o ‘Jaarrekening’: only exists in Belgium – yearly overview for taxes
Stakeholder ≠ shareholder:
Stakeholder: anybody interested in x company
Shareholder: all owners of x company (investors…)
Equity: value of shares issues by a company
II. Financial reporting
Standard form needed because everyone looks at reports from a different
perspective
Provides information about financial position, financial performance & cash flows
Report towards all stakeholders
o Financial performance
o Sustainability
o Risk management
o Corporate governance
o (Consolidated) financial statements
o Other information
Information published in financial report consulted by different groups of users
External & internal users:
o External:
(Potential) investors
Equity holders, granting loans, purchasing debt securities issued
Suppliers
Competitors
Trade union/ employees
Customers
Investors (owners) and creditors (banks & suppliers):
2
