Understanding Company Financial Statements 2ed

Special Features

• Up to date in terms of International Financial Reporting Standards (IFRS).
• Contains updated examples from the financial statements of listed companies.
• The MUST KNOW boxes that follow most sections in the book provide a valuable quick-reference to and oversight of the contents of the topic. Additionally they provide an alternative means of access to the content, which is accessible through an Index and a detailed Table of Contents.

Endorsements

“The ability to read, understand and interpret financial statements is by far the most important competence that anyone in a position of authority must have… The book could not have come at a better time. The end of apartheid, rapid growth in the services sector and the information technology revolution have accelerated the movement of people with non-business education into business, either as entrepreneurs or leaders of major organisations. It is these people who cannot afford to spend four years at university studying accounting. What they need is an understanding of the key concepts and practical techniques that are relevant to the decisions they have to take on a daily basis…

I believe this book addresses this need… It is written by one of the leading accounting scholars in the country…

I therefore recommend the book to all people in positions of authority and management, be it in the public or private sector or civil society. It is essential reading for all.”
—     Professor Wiseman Nkuhlu
Former Economic Advisor to the President — (From the Foreword to the first edition)

“This is an inspiring, resourceful and optimistic book that is strongly practical in orientation. In addition to its clarity of exposition, what makes this book stand out is the fluidity with which specific examples and practice are woven into the fabric of the book. It will serve the financial community well for a long time to come.”
—     Dr Len Konar
Director: South African Reserve Bank; Old Mutual

“Public ownership of companies has increased greatly in recent years, bringing with it the need for better appreciation of financial statements and the rules that govern them. At the same time, the accounting standards that dictate how companies must communicate have become vastly more complex. Geoff Everingham is the author of the standard work on Generally Accepted Accounting Practice in South Africa, and has ensured that What you must know about Understanding Company Accounts is both authoritative and readable. Non-accountants will find that the book is clearly written and helpful to gaining an understanding of what company accounts say and what they omit.”
—     Tom Wixley
former chairman of Ernst & Young, South Africa.

“This is an invaluable contribution to enhancing the financial literacy of individuals who need to understand financial statements and analyses without being specialists. Accessibly written and with an appropriately broad approach to the world of finance, it distils many years of teaching into an admirably clear and concise text.”
—     Professor Nick Segal
Graduate School of Business, University of Cape Town

“Company accounts concern many who are not trained in accounting. This book is aimed at them, but will be welcomed by aspiring and less experienced chartered accountants too. Its five sections provide a crisp yet lucid discussion of the basics of accounting; the background to the Companies Act and the requirement of fair presentation applicable to companies and close corporations; measurement issues; situations where the business expands by acquiring or making significant investments in other companies; and the issue of voluntary disclosure, including corporate social reporting and environmental reporting.”

“Understanding Company Accounts forms part of the publisher’s Must Know Series and is highly recommended.”
—     Michele Havenga
University of South Africa

Table of Contents

Foreword by Wiseman Nkuhlu – Former Economic Advisor to the President
Preface
List of Accounting Standards
Glossary
1 The Accounting Entity
2 Debits and Credits
3 Asset Valuation and Depreciation
4 Ultimate Reality: Taxes and Cash Flows
5 Using the Financial Information
6 The Companies Act, Fair Presentation and GAAP
7 Presentation of Financial Statements
8 Measurement Issues: Revenue
9 Measurement Issues: Physical Assets
10 Measurement Issues: Financial Assets and Liabilities
11 Measurement Issues: Intangible Assets
12 Earnings: The Crux of it All
13 Subsidiaries
14 Joint Ventures and Associates
15 Foreign Operations
16 Segmental Disclosures
17 Voluntary Disclosures
Index

About the Author

Geoff Everingham is Emeritus Professor of Accounting at the University of Cape Town. A well known author of numerous books and articles on accounting practice, he is a past chairman of the Accounting Practices Committee and member of the Independent Regulatory Board for Auditors. Geoff is a former director of Transnet where he served as chairman of the audit committee, and as acting chairman, and he is chairman of Sycom Property Trust.