Assets liabilities and equity it is important to note

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LEARNER GUIDE Informed estimates You can create an informed estimate by gathering information from relevant, accurate and trustworthy sources. For example, if you wanted to buy a motor vehicle for your business, you would have to estimate costs associated with: The initial purchase Tax Insurance Fuel Consumables, such as tyres Maintenance Repairs. An example to highlight estimation of costs: Items Estimated amount $ Cost of car 40,000.00 Stamp duty 1,200.00 (example figure for NSW) Registration transfer fee 24.00 (example figure for NSW) Vehicle registration 300.00 Company car insurance 600.00 Fuel estimated yearly mileage 12,874.75 Km 2000.00 (estimated yearly cost) Maintenance per year 600.00 Consumables per year 300.00 Repairs 500.00 Total estimated costs $ 45,524.00 You would have to budget for the initial outlay as well as the ongoing running costs associated with the vehicle over time.
LEARNER GUIDE 2.3 Prepare budgets in accordance withorganisational requirements and statutory requirements By the end of this chapter you should be able to: Identify relevant organisational and statutory requirements regarding budgets Prepare budgets Preparing budgets You will have to abide by your organisation’s requirements, policies and procedures when you prepare budgets. This is because you are making financial decisions on their behalf. When preparing a budget, look at the assumptions of the organisation’s business environment and check that this is correct for your budget preparation. Review any bottlenecks that may be hindering the business from attaining required sales figures or from generating further sales, and assess how this may impact on revenue growth. Determine the available funding and if there are any step-costs for business activities in the budget period (where these may be incurred and the amount). These organisational requirements may be: Financial analysis assessments Financial management manuals Legal and organisational policies, guidelines and requirements Occupational health and safety policies, procedures and programs Price and exchange parameters Quality assurance and/or procedures manuals Recording and filing systems Internal control procedures Reporting requirements Standard financial analysis techniques. There are several ASIC requirements that you may have to adhere to when preparing budgets: Delegated authorities Limits on volumes and types of financial transactions Reporting and timing of duty, excise and other overseas government charges (as a prepayment setup or by a periodic settlement basis) Reporting periods

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