STOP IFRS - Behind in Posting

Yes. I have fallen into the hole of not keeping up with my blogging. It is now the year-end closing period at work for me and I don't have time to wash my face. I am still keeping up with my CPE classes and I have two CPE classes to write about which I took. One is about Ethics and the other Sarbanes Oxley. These postings will follow during the week but I wanted to post this blog to let everyone know that I am still trying to keep my blog going. I am actually thinking about starting another blog where I can talk about anything and everything such as products I like and those that I don't. Also about my observations and customer services etc. To everyone out there, I hope you had a wonderful thanksgiving and enjoy the remainder of your weekend.

STOP IFRS - NOT FOR PROFIT ACCOUNTING

I am straying away from CPE as my classes for November are not ready but I am very interested in NFP (Not-for-Profit) accounting as I work with several charities and once in a while I am called upon to help with the books. Today I was given a booklet from a seminar with the words “WHAT IF THE IRS CAME TO YOUR CHURCH TODAY!”. Another notable quote in the booklet is “GOD IS NOT PLEASED WHEN YOUR BOOKS ARE OUT OF ORDER”. There are so many times I emphasize to NFPs that record keeping is very important and they agree but still continue to neglect the books. One NFP suggested that I should come to its offices on weekends and help it with the books. No one offered to pay me but everyone assumes I have nothing else to do on weekends so I should work for free. I did do that for a few years! The result; I ended up being involved in a court case where I had to answer for the books. Yes, I got praises for the excellent record keeping but court cases should not be the reason to keep your books in order. My suggestion to NFPs is to pay an accountant to review whatever you have as your books. He/she will be able to give you feedback as to whether or not you need additional help. Chances are if you have a good system in place, you won’t need to do anything else but for other NFPs an hour or two of a CPA’s time giving you direction is invaluable and “GOD WILL BE PLEASED THAT YOU HAVE YOUR BOOKS IN ORDER”.

STOP IFRS - EVA MOMENTUM

What is EVA Momentum? I hope to answer this question in my blog today. It is the change in EVA. Now this raises the question as to what is EVA? Economic Value Added. This was one of those CPE classes where I had to read the material several times to get a gist of what was being discussed. Ratios were discussed primarily ROI - Return on Investment –which is used by many financial executives and the deficiency with this ratio. What’s great about EVA? “EVA takes ROI and deducts the cost of capital; … it’s a risk-adjusted return.” One point noted was that you get the same net present value using EVA as you do using discounting cash flow. The formula for calculating EVA Momentum is the change in EVA divided by base period’s sales. So what is EVA saying? You have to take into account the cost of capital when analyzing your business performance; do not rely solely in ROI or ROC (Return on Capital).