Financial Accounting.
Singh, Kanhaiya
Financial Accounting, Dhanesh K Khatri, Tata Mc Graw Hill Education
Private Limited, New Delhi, 2011, Pages 806.
Financial Accounting by Khatri is an exhaustive analysis of various
concepts in finance and accounts area. Though the book primarily aimed
to provide basic conceptual framework on different accounting aspects
but it has virtually dealt with the subject fundamentals exhaustively.
Besides a detailed coverage on fundamental accounting concepts, there is
a good coverage of contemporary issues like, IFRS, Derivatives, foreign
currency transactions etc. This certainly increases the utility of this
book.
Broadly the contents of the book has been divided into five parts
i.e. the conceptual and fundamental aspects of accounting, regulatory
aspects of accounting information and accounts classification, a view on
company accounts, analysis of financial statements and contemporary
issues in advance accounting. There are 19 chapters which deal with
relevant aspects of topics in detail.
Chapters 1 to 6 are devoted to explain the fundamental aspects of
accounting, financial accounting framework, asset liability
categorization, complete accounting cycle and its principal segments and
final accounts preparation including the accounts of company. The areas
like accounting standards relating to financial statements,
classification of assets according to GAAP, accounting cycle, tax
aspects of taxable income, accounting standards in preparation of
companies' final accounts have been explained with practical
approach. This makes the understanding more convenient.
Chapters 7 to 9 deal with financial statement analysis, fund flow
and cash flow analysis. These chapters cover certain very useful
concepts like; Black Holes--Red Flags, Distress analysis, stakeholders
and cash flow statement, comprehensive items of fund flow etc. This
enhances the usefulness and importance of the book. The two case studies
presented in these chapters explain the operational use of funs flow
analysis.
Chapter 10 describes various accounting aspects of inventory
valuation and their impact on accounting reporting. The chapter also
analyses the impact of inventory valuation and its reporting on profits
of the firm. The accounting aspects of capital expenditure recognition,
measurement of fixed assets, recognition of intangible assets,
impairment of assets and their reversal etc are dealt extensively in
chapter 11. Chapter 12 focuses on provisions, restructuring, disclosure
and other special issues on accounting of liabilities and their
accounting standards.
Chapter 13 has added significance as it is devoted on financial
engineering and foreign exchange transactions issues. The analysis of
concepts like, accounting for non cash collaterals, deregulation of
financial liabilities, tax effect on exchange differences etc. in this
chapter is worth mentioning.
Chapters 14 to 16 elaborately deal with accounting aspects of
shares and debentures of a limited liability company, accounting aspects
of mergers and acquisitions including taxation aspects, and financial
statements and disclosure of financial statements. The practical
operations and regulatory guidelines have also been covered while
analyzing the relevant aspects. Chapter 17 explains various aspects of
accounting standards and IFRS. Chapter 18 describes accounting aspects
of leasing operations. The last chapter of the book is devoted to
reporting financial performance and corporate governance issues which
have become crucial in financial reporting now-a-days.
In all, the authors has made considerable efforts to enhance the
quality of the book not only by explaining various concepts and
accounting aspects but also dealing with practical situations. The
presentation style providing useful information, boxed items etc makes
an interesting reading. This book can be used in many ways such as
useful text book to the management students, a practical book to the
Practitioners and accounting consultants.
Kanhaiya Singh
Professor,
FORE School of Management.
