• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Finance For Managers.

Extracts from this document...


FINANCE FOR MANAGERS MODULE B103 ASSIGNMENT Fixed assets Fixed assets represent the more or less permanent assets of the business. They are not normally for re-sale. Examples include premises, fixtures & fittings, furniture, equipment and motor vehicles. Investments of a long-term nature may also be included. The purchase of stocks and shares in other companies of property investment are some examples. These fixed assets are 'tangible' because they can be seen. Some assets are 'intangible' because they cannot be seen. Goodwill is one of the latter and represents the good name or reputation of the business, which could be valuable, if it is sold. Three examples of fixed assets are: * Premises or buildings This is considered to be a fixed asset because it is owned either by the business or by the owner and is of value. Buildings are property and are therefore usually not re-sold; they tend to be more permanent assets to the business. * Equipment This is a purchase by the business and can include such things as stationary, machinery and other items relating to the running of the business. ...read more.


Depreciation is therefore regarded as an expense to the business and the purchase of fixed assets is like buying an expense charged against profits over periods, until the asset is disposed of. The Fixed Instalment / Straight-line method This method charges the same depreciation sum each year against profits. The amount is calculated by firstly dividing the difference between the cost price of an asset and the amount expected to be realised when the item is resold (residual value). This figure is divided by the number of years the business intends to hold the asset. If an asset is not expected to be resold, annual depreciation is the cost price of an asset divided by the number of years. Many organisations use this type of depreciation on fixed assets such as furniture, fittings, plant, machinery and equipment. Advantages: * Simple & effective method * Preferred for costing purposes The Reducing Balance / Diminishing Balance method An alternative method of depreciation of fixed assets is to ensure that the depreciation charge each year diminishes as the asset gets older and is of less value. ...read more.


The standard indicates that a change of method is only acceptable if it is thought that it will give a better or fairer position of the accounts. Financial Reporting Standards (FRSs) Accounting standards developed by the ASB are contained in 'Financial Reporting Standards' (FRSs). After the adoption of standards issued by the ASC, FRS's has superseded some of the SSAP's. The statement associated with depreciation of fixed assets is FRS No. 12 Provisions, Contingent Liabilities and Contingent Assets. FRS No. 15 - Tangible Fixed Assets FRS 15 sets out the principles of accounting for tangible fixed assets and ensures that these assets are accounted for on a consistent basis. The FRS permits a choice as to whether tangible assets are stated at cost or at revalued amount. FRS 15 incorporates many of the requirements of SSAP 12; the FRS recognises that in a limited number of cases, no depreciation charge may be made because it is immaterial. Where this is the case, or where depreciation is calculated on a basis that assumes that the useful life of an asset is longer than fifty years, the standard requires annual impairment reviews. This will ensure that the carrying amount of the asset is not overstated. FRS 15 is effective for accounting periods ending on or after 23 March 2000. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Marked by a teacher

    Business Finance. There are a number of sources of finance, which businesses will need ...

    3 star(s)

    There is no form of security needed in order to borrow the money; this makes it easier to borrow money from family & friends because unlike banks, mortgages etc they don't ask for any forms of security, which is an easier option.

  2. Accounting Concepts and Conventions

    It is normal to write off the cost of the asset to the profit and loss account over this time. In this case a depreciation cost of �6,000 per annum will be charged. Using the Going Concern Concept, it is presumed that the business will continue operating and so the asset will live out its fully 10 years.

  1. This report has been produced as evidence for Unit 9 - 'Financial Services' - ...

    (�2,725 / �12,000) * 100 = 22.71% total return If you take your income and distributions in cash, the calculation is similar. You simply add the amount of income and distributions you receive during the period to the change in account value. Then divide by the beginning balance and multiply by 100 as above.

  2. Harmonisation of accounting standards in Europe

    The Directive cover both public and private companies in all EU countries. In 1978, the EC implemented the 4th Directive on the Format and Rules of Accounting, which harmonised the general layout and content of company financial statements. Although a limited number of national options were permitted, companies registered in

  1. The Purpose of Keeping Accurate Accounts

    Their aim differs from that of a sole trader; they aim to provide a service or to entertain. In the adjustment account the subscriptions are the main problem because if the members do not pay, it has to be individually treated.


    Some countries require only one of the two calculations. (Japan requires basic only, for example.) Some (Spain, Switzerland, and Germany for instance) require no EPS disclosure at all, but disclosure may be provided anyway." (http://www.people.memphis.edu/~dspice/global.html) 5. SOURCES OF FINANCE: "This difference in providers of finance (creditors/insiders)

  1. Identifying and describing the main financial service needs for a student starting at university

    This valuable protection is available if you are aged 18 to 64, working at least 16 hours a week and resident in the UK. Credit Interest Gross Rate The rate before the deduction of tax applicable to interest on savings account.

  2. Planning the finance for my new business.

    business can use foreign banks as well as domestic banks, however the loan has to be paid back with interest and the payments subject to the exchange rate fluctuations. A mortgage is a loan secured on a property, this benefits a business because large amounts of capital are available to

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work