This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
PowerPoint Authors:Susan Coomer Galbreath, Ph.D., CPACharles W. Caldwell, D.B.A., CMAJon A. Booker, Ph.D., CPA, CIACynthia J. Rooney, Ph.D., CPA
McGraw-Hill/Irwin
Costing and the Value Costing and the Value ChainChainChapter 19
19-2
R & Dand
Design
Suppliersand
Production
Distributionand
Marketing
CustomerService
The value chain is the set of activities andresources necessary to create and deliver
products and services valued by customers.
The Value ChainThe Value Chain
19-3
International Financial International Financial Reporting Standards and the Reporting Standards and the Value ChainValue Chain
Differences between U.S. Generally Accepted AccountingPrinciples (GAAP) and International Financial Reporting
Standards (IFRS) may be value chain related. Examples:
IFRS requires some R&D activities to be capitalized IFRS requires some R&D activities to be capitalized while GAAP requires them to be expensed.while GAAP requires them to be expensed.
Companies, operating in both the U.S. and in countries Companies, operating in both the U.S. and in countries where IFRS is the accepted standard, may need to file where IFRS is the accepted standard, may need to file
financial reports that meet both IFRS and GAAP financial reports that meet both IFRS and GAAP standards.standards.
19-4
Non-value-added activities add cost withoutadditional desirability, and can be eliminated
without reducing quality or performance.
Value-added activities add to product’s or service’s desirability in customers’ eyes.
Identify EliminateNon-value-
addedactivities
Value- and Non-Value-Added Value- and Non-Value-Added ActivitiesActivities
19-5
Value-Added
Activities
ContinuallyEvaluate
and Improve
Non-value-Added
Activities
Reduce orEliminate
Analysis andClassification
Activities
Value- and Non-Value-Added Value- and Non-Value-Added ActivitiesActivities
19-6
I love them!
Value-Added ActivitiesValue-Added ActivitiesValue-added activitiesenhance the value of productsand services in the eyes of the customer while meetinggoals of the business.
Designing to customer specification
Processing for just-in-time delivery to customers
Competent customer service
19-7
Non-value-added activitiesuse resources withoutproviding value to customers.Material and other inventory
storageMoving parts and materials
in the factoryWaiting for work InspectionCreating scrap and reworkProduct design without
To increase the accuracy and reliability of financial statements, the Sarbanes-Oxley Act requires public companies, and separately their auditors, to issue a report on the effectiveness of their internal control
structures.
Because a company’s value chain typically engages in transactions recorded in accounting records, the internal control structure must take into account the