lecture_02 - Lecture#2 11.10.2013 Lecturer Gergely Mohl...

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Lecture #2 11.10.2013 Lecturer: Gergely Mohl, Ph.D.
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° Assets : asset is a resource controlled by the entity as a result of past events from which future future economic economic economic benefits benefits benefits are expected to flow to the entity. (cca.: what does the entity have) ° Liability : present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits ° Owners ' equity equity : Assets - Liability 2
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° Every asset must have been financed, acquired somehow, either by own or other (borrowed) resources. Which means that: Assets = Owners' equity + Liabilities 3
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Non current assets Current assets Owners' equity Liabilities Tangible assets Intangible assets Inventory Receivables Cash & c. equivalents Capital Reserves Drawings (-) Long-term liabilities Short-term liabilities Statement of financial position, 31st December 20X1 4
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© MOHL An entity shall classify an asset as current when: ° it intends to sell sell sell sell or or or consume consume consume in its normal operating cycle; ° it expects to realise the asset in its normal operating cycle or within twelve months after the reporting period, ° it holds the asset primarily for the purpose of trading trading; ° the asset is non-restricted cash or a cash equivalent . 5
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© MOHL An entity shall classify a liability as current when: ° it expects to settle settle settle the liability in its normal operating cycle; ° it holds the liability primarily for the purpose purpose of of trading trading; ° the liability is due due due to to to be be be settled settled settled within within within twelve twelve twelve months months after the reporting period; or ° it does not have an unconditional right to defer settlement settlement of of of of the the the liability liability liability for at least twelve months after the reporting period. 6
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° Net assets = assets - liabilities (ie.: the interest of the owners of the entity in the assets after "debts" are cleared.) ° Capital employed = assets - current liabilities ° Working capital = current assets - current liabilities (also known as net current assets) 7
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° Tatjana had the following items on 30th June 2009: she had a building valued at k$1,000, which she used as warehouse. The warehouse was financed by a loan. Originally k$1,200 loan was taken out of which k$200 was already paid back by Tatjana previously. The loan will be paid back in five years from 30th June 2009, in five equal installments. She also had at that day goods for reselling amounting to k$500. The company still did not pay k$100 out of the previous invoice of the supplier. ° The business was started some years ago with k$300 introduced into business. ° Tatjana's bank account showed k$1,000 balance on 30th June 2009 and the petty cash amounted to k$5.
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