+7 925 966 4690, 9am6pm (GMT+3), Monday – Friday
ИД «Финансы и кредит»

JOURNALS

  

FOR AUTHORS

  

SUBSCRIBE

    
Economic Analysis: Theory and Practice
 

Managing the company value and performance based on the choice of expense recognition option

Vol. 17, Iss. 9, SEPTEMBER 2018

PDF  Article PDF Version

Received: 21 June 2018

Received in revised form: 12 July 2018

Accepted: 27 July 2018

Available online: 28 September 2018

Subject Heading: MANAGERIAL ANALYSIS

JEL Classification: L21, М49

Pages: 1745–1760

https://doi.org/10.24891/ea.17.9.1745

Kuvshinov M.S. South Ural State University, Chelyabinsk, Russian Federation
msk1954@mail.ru

ORCID id: not available

Importance The article considers information and analytical support to the system of assessment and management of company value and performance under various options of administrative expense recognition.
Objectives The aim is to identify and assess the influence of administrative expense recognition option on formation and presentation of reliable and relevant information on financial and economic position of the enterprise to manage its value and performance.
Methods The paper analyzes the impact of merits and demerits of major administrative expense distribution options on investment attractiveness of the enterprise.
Results I underpin the concept of expediency to identify administrative expenses. The economically viable portion of administrative expenses, which is proportional to the cost of goods sold, should be booked in the current period. As for the remaining portion, it is necessary to create provisions for reduced inventory value and for risk coverage of administrative expense reasonableness. The balances should be either written off in subsequent periods as sale of residue stock of manufactured goods or, if there are no chances to sell the residue stock, be written off against the earlier created provisions. In the event of successful sale of the residue stock in the next period, the identical portion of the remainder of administrative expenses should be expensed in the period, and related provisions be reversed in financial results.
Conclusions The developed concept enables to generate and present more reliable and relevant information about financial and economic condition of the enterprise.

Keywords: administrative expenses, distribution, enterprise, company value, performance

References:

  1. Mel'nikov V.A. [Technology of formation of the cost of production and analysis of strategic options for the development production]. Mezhdunarodnyi nauchno-issledovatel'skii zhurnal = International Research Journal, 2014, no. 12-2, pp. 15–22. (In Russ.)
  2. Sarantseva E.G. Uchet i analiz zatrat na proizvodstvo v sisteme upravleniya: monografiya [Accounting for and analysis of production costs in the management system: a monograph]. Moscow, Rusains Publ., 2017, 112 p.
  3. Jenkins W.D. Strategic Management and Business Analysis. United Kingdom, London, Routledge, 2016, 298 p.
  4. Business Analysis for Practitioners: A Practice Guide. United States, Newton Square, PA, Project Management Institute, 2015, 206 p.
  5. Grifell-Tatjé E.L., Knox Lovell C.A. Productivity Accounting: The Economics of Business Performance. United Kingdom, Cambridge, Cambridge University Press, 2015, 398 p.
  6. Drury C. Cost and Management Accounting. United Kingdom, London, Cengage Learning EMEA, 2015, 512 p.
  7. Kleiman A.V., Chernyavskaya A.V. [Problems of cost management of industrial enterprises]. Natsional'nye interesy: prioritety i bezopasnost' = National Interests: Priorities and Security, 2015, vol. 11, iss. 3, pp. 50–63. URL: Link (In Russ.)
  8. Kuvshinov M.S., Kireeva N.V. [The analysis of compliance of the cost-management methods to the actual problems of industrial management]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2014, vol. 13, iss. 17, pp. 37–46. URL: Link (In Russ.)
  9. Kuvshinov M.S. Variation factor of economic elements of innovative business management system. Economics & Management Research Journal of Eurasia, 2013, iss. 1, pp. 3–24.
  10. Clarke P. Managerial Accounting: Costing, Decision-making and Control. Dublin 2, Ireland, Chartered Accountants Ireland, Institute of Chartered Accountants in Ireland, 3rd revised edition, 2016, 832 p.
  11. Rajan M.D., Datar S.M., Horngren C.T. Cost Accounting: A Managerial Emphasis. UK, Harlow, Pearson Education Limited, 2014, 960 p.
  12. Vanderbeck E. Principles of Cost Accounting. Cengage Learning, 2012, 600 p.
  13. Gorina M.S., Makusheva Yu.A. [Analysis of advantages and shortages of the direct costing sistem]. Mezhdunarodnyi zhurnal prikladnykh i fundamental'nykh issledovanii = International Journal of Applied and Fundamental Research, 2015, no. 9-3, pp. 510–512. (In Russ.)
  14. Zhukova E.A., Rozhkova M.G. [Problems of cost management at the enterprise]. Molodoi uchenyi = Young Scientist, 2017, no. 12, pp. 283–286. (In Russ.)
  15. Ilyukhina N.A., Bobrova E.A., Kyshtymova E.A., Lytneva N.A. [Methodical instruments in cost price management of agrarian enterprises production]. Vestnik OrelGIET = OrelSIET Bulletin, 2015, no. 2, pp. 172–176. (In Russ.)
  16. Zhdankin N.A. [Expenses of the enterprise and ways to regulate them]. Ekonomicheskii zhurnal = Economic Journal, 2016, no. 23, pp. 13–16. (In Russ.)
  17. Miller A.E. [Theoretical justification of correlation of the traditional and entrepreneurial management of costs]. Vestnik Sibirskoi gosudarstvennoi avtomobil'no-dorozhnoi akademii = Vestnik SibADI, 2015, no. 3, pp. 148–156. (In Russ.)
  18. Nosova I.L. [Comparative analysis of Direct Costing and Absorption Costing methods for administrative decision-making]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2012, vol. 11, iss. 29, pp. 17–24. URL: Link (In Russ.)
  19. Suloeva S.B., Gul'tseva O.B. [The system of cost management: Conceptual provisions]. Organizator proizvodstva = Organizer of Production, 2017, vol. 25, no. 3, pp. 47–58. URL: Link. (In Russ.)
  20. Naugol'nova I.A. Metodologicheskie osnovy upravleniya zatratami na promyshlennykh predpriyatiyakh: monografiya [Methodological framework for cost management at industrial enterprises: a monograph]. Moscow, Rusains Publ., 2018, 142 p.
  21. Demina I.D., Merkushchenkov S.N. Teoriya i praktika primeneniya sovremennykh metodov ucheta zatrat i kal'kulirovaniya sebestoimosti produktsii: monografiya [Theory and practice of applying the modern methods of cost accounting: a monograph]. Moscow, Rusains Publ., 2015, 112 p.
  22. Connolly C. International Financial Accounting and Reporting. Ireland, Chartered Accountants Ireland, 2015, 1088 p.
  23. Monami D. Inventory Control & Production Planning: A Researcher's Guide. LAP Lambert Academic Publishing, 2013, 324 p.

View all articles of issue

 

ISSN 2311-8725 (Online)
ISSN 2073-039X (Print)

Journal current issue

Vol. 23, Iss. 3
March 2024

Archive