Essay on Finman

Words: 2582
Pages: 11

In Management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which allows them to better manage and perform control functions

IFAC Definition of enterprise financial management embracing three broad areas: cost accounting; performance evaluation and analysis; planning and decision support. Managerial accounting is associated with higher value, more predictive information.[1] Copyright July 2009, International Federation of Accountants
One simple definition of management accounting is
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Traditional vs. innovative practices[edit]

Managerial costing time line[4] Used with permission by the author A.van der Merwe Copyright 2011 All Rights Reserved.
Within the area of management accounting there are almost an infinite number of tools, methods, techniques and approaches floating around.[5]
The distinction between traditional and innovative accounting practices is perhaps best illustrated with the visual timeline (see sidebar) of managerial costing approaches presented at the Institute of Management Accountants 2011 Annual Conference.
Traditional standard costing (TSC), used in cost accounting, dates back to the 1920s and is a central method in management accounting practiced today because it is used for financial statement reporting for the valuation of income statement and balance sheet line items such as cost of goods sold (COGS) and inventory valuation. Traditional standard costing must comply with generally accepted accounting principles (GAAP US) and actually aligns itself more with answering financial accounting requirements rather than providing solutions for management accountants. Traditional approaches limit themselves by defining cost behavior only in terms of production or sales volume.
In the late 1980s, accounting