Industry-Specific Accounting Adjustments for Performance Measurement PPT

This PPT slide, part of the 106-slide Corporate Performance Measurement PowerPoint presentation, presents a framework for corporate performance measurement, specifically focusing on accounting adjustments as outlined by Stern Stewart. It emphasizes the necessity of adjusting capital and earnings to align with industry-specific accounting practices, thereby enhancing the comparability of financial metrics across different sectors.

The left side of the slide lists key adjustments that are critical for accurate performance measurement. These include reserves, goodwill, capitalisation of outlays, full-cost accounting, unusual items, and capitalisation of leases. Each adjustment plays a vital role in refining financial data to reflect a more accurate economic profit.

On the right side, the slide categorizes industries that are most affected by these adjustments. For example, high inventory industries, such as consumer goods and services, are highlighted due to their susceptibility to issues like bad debt and inventory obsolescence. Acquisitive industries also require careful consideration of goodwill, while R&D intense industries must account for capitalisation of outlays.

The slide further identifies discovery industries, restructuring industries, and capital-intensive sectors as areas where full-cost accounting and unusual items are particularly relevant. This segmentation underscores the importance of tailored financial analysis based on industry characteristics.

Overall, the content suggests that understanding these adjustments is crucial for stakeholders aiming to make informed decisions based on financial performance. It positions the adjustments as essential tools for achieving a clearer picture of economic profit, which can significantly influence strategic planning and investment decisions.

This slide is part of the Corporate Performance Measurement PowerPoint presentation.

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Performance Management Shareholder Value Strategic Planning Performance Measurement Financial Analysis Cost Accounting Restructuring Restructuring

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