Hi guys, this is a long one so bear with me. I am studying avbk at min and not fapr which may unlock the answer for me in the future, but been asked this at work in a debate between director and in house accountant.
When valuing stock in a monthly basis for management accounts it is done in great detail and worked out on cost of machine plus associated costs (such as crane hire, duties of imports etc). Coming up with an overall stock valuation.
The director is saying that surely that means things are duplicated interms of crane hire for e.g. invoice is entered into sage and is accounted for. And then that cost used again to essentially increase stock value over a number of machines. The accountant says it is merely a valuation of stock. Could anyone help me understand who and why either argument is right?
Hi Lee
Most folk will not know what AVBK/FAPR are, especially the oldies who trained under different exam structures or those who did not following that particular prof body at all. I can hazard a guess as Im sure some on here will do, but then we have no idea what is covered in that particular module, so worth an expansion, although I dont know that it necessarily adds to the Q (I could be wrong).
Just remember that financial accounts have to comply with set accounting standards. Management accounts do not. The latter are only for internal use and the way items are presented and used to present information can be very different. Not sure if you have covered margin/absorption costing yet but such can give massive differences in stock values and therefore profit calculations but are just a management accounting tool.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi. Sorry forgot that avbk = advanced bookkeeping transactions and fapr = financial accounts preparation. Havent looked at that yet to be honest, will have a nose been doing a lot of research today as want to go back in to work and not look like a moron tomorrow. I feel I have got a grasp of the Profit and loss sheet (maybe).
Thanks for the help.
