Consider the sin question of the categories of trade. The financial statements are calculated (sometimes raised in dollars and local currency) using the prevailing rating of 31 December last fiscal year. In a country with a volatile currency, the reality was distorted. This is especially true if much of the activity presided over this arbitrary date. The same applies to financial reports that were not adjusted for inflation in countries that have this problem. The report will look inflated and may reflect true earnings where leaks. The accounting of “average figures” (which uses the average scores throughout the year) may be more confusing. The only way they can truly reflect reality is if the bank has two sets of separate accounts: one in the local currency and a dollar (or other currency as the reference). Otherwise, fictitious growth could occur in the asset base, due to inflation of the currency.

Another example: in many countries, changes in regulations can seriously affect the financial report of a bank. In 1996, in Russia, for example, the Bank of Russia changed the algorithm for calculating an important banking ratio (the ratio to calculate the capital asset risk weight). Unless a Russian bank could write back their financial reports according to the new provision, were unrealistic changes in profitability. (more…)

SAP FI module able to do everything related to accounting and finance from a company. It can be thought of as the financial manager who can review the financial position in real time in accordance with existing procedures.

Because the resulting data is real time, so this module can help decision-making and strategic planning better. All modules MM (Materials Management), PP (Production Planning), SD (Sales and Distribution), CO (Controlling) and HR (Human Resources) module is integrated with FI. (more…)

As already presented in previous articles about the accounting terms. Accounting is called the language of business because it is a tool to deliver financial information to parties who need it. The better we understand the language, then the better our decisions, and the better we are in financial management. To convey such information, the accounting reports are used or what is known as financial report. The financial report of a company usually consist of four types of reports, namely the balance sheet, income report, report of capital changes and cash flow report.

Balance Sheet, is a systematic list of assets, debt and capital on a particular date, which is usually made at the end of the year. Referred to as a systematic list, because the balance sheet is based on a particular order. In the balance sheet can be known how many of the company’s assets, the company’s ability to pay obligations and the ability of the company obtained additional loans from outside parties. It can also be obtained information about the company’s debt to the creditor and the amount of existing owners of investment in the company. (more…)