Items from the glossary are indicated in bold.
abridged accounts 208, 212, 485
accruals 3, 4, 5–6, 8, 9, 373, 375
bad debt provisions 143
equity 161
financial see financial accounting
historic cost 105, 165, 167, 169, 171, 172, 189, 404, 438–9
management see management accounts/accounting
for opex and capex 72
for prepayments and accruals 134
standards see accounting and financial reporting standards
for stock 114
accounting and financial reporting standards 187–94, 208, 406–7, 444, 485
GAAP (generally accepted accounting principles) 4, 9, 33, 66, 190, 191, 440, 489
international (IAS/IFRS) 66, 189, 190–2
and management accounts packs (MAPs) 428
and opex and capex classification 71
accounting rate of return see annual yield
accounts
see also company accounts; financial accounts; financial statements; management accounts
see also creditors
see also debtors
accruals 6, 8, 18, 42, 50, 62, 129–36, 138, 381, 396, 441, 485
accruals accounting 3, 4, 5–6, 8, 9, 373, 375
actual (cash flow) insolvency 256, 418
agents 64
Aldi 338
alternative performance measures (APM) 33
amortisation 95, 105–6, 180, 390, 392, 485
angel investors (business angels) 301, 303, 485
annual yield 362, 364–5, 435–6
arm’s-length principle 158
ASDA 305
asset turnover (AT) 41, 235, 414
asset-based valuations 286–7, 291–2, 423
assets 440
in the balance sheet 38, 39, 40, 41, 42–3
long-term (fixed) see fixed assets
short-term (current) 40, 44, 86, 96, 110
values 42–3, 87, 88, 93, 104–5
audit
and accruals accounting 6
adverse opinion 202
and the balance sheet 42
disclaimer 203
external financial 6, 195–206, 407–9, 438, 485, 488
and going concern concept 198, 199, 203–4
qualified opinion 188, 201–2, 409
trails 21
average cost (AVCO) 114, 116, 117
bad debt provisions 124, 143, 395
balance sheet 17, 38–48, 49, 50, 208, 353, 380–2, 439
net assets/shareholders’ funds presentation 44
source and utilisation of finance presentation 44–5
balance sheet (technical) insolvency 255–6, 418
banks
and audited accounts 199
dividend payments 277
Beyond Budgeting Round Table (BBRT) 360
big data 329
committees and corporate governance 221–2
see also directors
Boeing 737 Max safety 102, 176
see also net book value (NBV)
Boots plc 304
borrowing, cost of 315, 318–19
BP, Deepwater Horizon disaster 139–40
breakeven sales 344–5, 346, 347, 348
budget constraints 356
budgetary slack and padding 356
budgets/budgeting 12, 18, 341, 352–61, 432–4, 485
shrinking visibility problem 359, 434
buildings see land and buildings
business analytics 329
business angels see angel investors
business intelligence 329
business mix 234
business tax see tax
business valuation 102–3, 285–96, 423–5
factors impacting 424
market to book ratio 293
capex (capital expenditure) 69–74, 386, 441, 486
capital
in the balance sheet 40, 42, 45, 147
cost of 313, 362, 368, 437, 486
weighted average cost of (WACC) 368, 493
working see working capital
see also equity
capital and reserves 40, 147, 486
see also return on capital employed (ROCE)
capital expenditure (capex) 69–74, 386, 441, 486
capital maintenance rules 150
capital redemption reserve 154
capital reserves 42, 147, 148, 149, 150, 151, 153–4, 400, 401, 486
capitalisation of assets 91–2, 95, 96
Carillion 443
carrying value of an asset 175, 176, 177, 180
retentions 7
cash equivalents 54
cash flow 353
discounted 286, 288, 362, 365–7, 368–9, 423, 487
forecasting 244, 247, 253, 355
operating 51, 53, 54, 383, 384
cash flow (actual) insolvency 256, 418
cash flow statement 9, 49–58, 382–4
cash generating unit (CGU) 180–1
cessation 302
chief financial officer (CFO) 12, 375
choice, and accounting standards 189–90, 278, 406–7
CIMA (Chartered Institute of Management Accountants) 326, 327
commercial income 64
communication, budgeting as means of 353–4
Companies House 207, 209, 210, 213–14, 409
company accounts
and accounting standards 193
and accruals accounting 9
audit report 205
and balance sheet 46
budgets not in 361
and business valuation 294
capital and reserves 155
cash flow statement (CFS) 55
debtors and creditors 126, 249
dividends per share 283
earnings per share (EPS) 282
equity finance 310
gearing 269
going concern disclosures 259
and group accounting 163
impairment 182
and information in the public domain 215
interest cover 269
management accounts pack not in 330
opex and capex 72
prepayments and accruals 135
profit and loss (P&L) account 35
profit planning not in 351
profitability performance measures 238
provisions and contingencies 143–4
revenue recognition 67
stock 118
tax 84
viability statement 259
working capital 249
see also accounts; financial accounts; management accounts
company voluntary arrangement (CVA) 256, 257
Competition and Markets Authority (CMA) 338
Concorde supersonic plane 177
confirmation statement 207, 210, 409, 410, 486
consolidated accounts see group accounts/accounting
constraint, budgeting 356
contingent liabilities 137, 138, 139, 141, 144, 292, 399–400
contracts
onerous 140
contribution 342–4, 348, 431, 486
contribution per unit 350
contribution percentage of sales (CPS) ratio 344–6, 347, 348, 431–2
control
organisational, and budget holders 354
ownership versus 160, 217, 221
parent companies 157
coordination, budgeting as means of 353–4
corporate failure 188, 197, 217, 226, 443, 444
corporate governance 216–27, 354, 410–12, 486
cost of sales (cost of goods sold (COGS)) 31
cost–volume–profit (CVP) analysis 350, 487
cost(s) 63
of capital 313, 362, 368, 437, 486
classification 342
depreciated replacement 170
fixed 342, 343, 347, 348, 349, 350, 430, 432
mixed 350
and price setting 334
training 95
variable 342, 343, 347, 348, 349, 350, 430, 431
versus net realisable value (NRV) 114–15
Covid-19 pandemic 176, 179, 182, 198, 209, 254, 271, 277
credit
and profit 374
credit control 121, 122–3, 243, 394, 486
creditor days 122, 125, 394–5, 486
creditors 6, 13, 41, 50, 120–8, 138, 150, 249, 255, 292, 381, 393–4, 416, 486
crowdfunding, equity 303–4, 488
cumulative preference shares 153
current assets 40, 44, 86, 96, 110
CVP (cost–volume–profit) analysis 350, 487
DCF see discounted cash flow
deadlines
bad, provisions for 124, 143, 395
collection 243
defining 268
insurance 123
sale of 123
debt finance 44, 45, 52, 262–4, 301, 312–20, 368, 426–7, 487
covenants 315
and financial risk 262, 300, 313–14
secured versus unsecured 312, 317–18
short-term 317
debtor days 122, 125, 394–5, 487
debtors 6, 13, 41, 50, 120–8, 249, 292, 381, 393–4, 416, 487
deferred expense see prepayments
deferred income 42, 133, 381, 487
Dell computers 307
depreciated replacement cost 170
depreciation 76, 81, 86, 87–90, 92–5, 154, 180, 389–91, 441, 487
calculation of 89–90, 93–4, 390–1
development costs 71, 101, 105
dilapidations 140
directors
and accounting standards 187–8, 444
and corporate governance 217, 220–2
fraud and error detection 196, 441
going concern statement 254
legal obligations 207, 208–9, 252, 441, 444
preparation and filing of accounts 208
publicly filed information about 208, 209, 210–11, 214
self-interest risk 217
viability statement disclosure 157–8
see also board of directors
disclaimer, audit 203
disclosure requirements 208–13
discounted cash flow 286, 288, 362, 365–7, 368–9, 423, 487
discounts
early payment 123
volume 348
dividend cover 272, 275–7, 281, 422
dividend policy 309
dividend yield 272, 277–8, 282, 422
dividends 52, 76, 149, 151–2, 152–3, 154, 426
preference 272
tax on 83
dormant companies 195
confirmation statement 210
disclosure requirements 211–13
downward revaluation 168–9, 175
early payment discounts/incentives 123, 243
earnings per share (EPS) 272–3, 421–2, 488
diluted 281
earnings statement see profit and loss (P&L)
EAT/PAT (earnings/profit after tax) 31, 32, 232
EBIT/PBIT (earnings/profit before interest and tax) 31
EBITDA (earnings before interest, tax, depreciation and amortisation) 33, 378, 487
EBT/PBT (earnings/profit before tax) 31
employees 252
share options 281
employment taxes 76, 77–8, 80, 387
Enron 188
enterprise resource planning (ERP) systems 19, 329, 488
environmental, social and governance (ESG) factors 223
EPS see earnings per share
see also capital
equity accounting 161
equity crowdfunding 303–4, 488
equity finance 44, 45, 52, 263, 299–320, 368, 425–6, 488
equity (ordinary) shares 148, 152, 153, 300, 308–9, 402
ERP see enterprise resource planning
expense(s)
accrued see accruals
deferred see prepayment
operating 31
external financial audit 6, 195–206, 407–9, 438, 485, 488
Exxon Mobil 190
factoring, debt 123, 243, 317, 487
factoring organisations (‘factors’) 317
FASB (Financial Accounting Standards Board) 191
Federation of Small Businesses 196
FIFO (First-In-First-Out) 114, 116, 393
finance
short-term 244
see also debt finance; equity finance
utilisation of (capital employed) 44, 45
finance department 376
typical structure of 12
finance director (FD) 12–13, 375
financial accounting
accruals accounting 3, 4, 5–6, 8, 9, 373, 375
key areas 13
see also accounting and financial reporting standards; audit; fixed assets; group accounts/accounting; stock; tax
Financial Accounting Standards Board (FASB) 191
financial accounts 4, 6, 9, 141, 323
deadlines for filing 208–9, 409
and management accounts, difference between 323, 376–7
statutory accounts 11, 19, 207, 208, 492
time lag 325
see also accounts; company accounts
Financial Conduct Authority (FCA) 338
financial controller 13
financial health
business valuation 285–96, 423–5
insolvency and going concern risk 251–61, 417–19
long-term solvency performance measures 262–70, 419–21
profitability performance measures 231–9, 412–14
working capital and liquidity management 240–50, 415–17
financial management
budgeting and forecasting 12, 18, 341, 352–61, 432–4
investment appraisal 341, 362–70, 434–7
management accounts/accounting 6, 12, 18, 32, 323–31, 352, 376–7, 427–8
profitable pricing 332–40, 428–30
financial reporting standards see accounting and financial reporting standards
financial statements 488
estimates and judgements 65, 439–41
and investor ratios 278
key elements
goodwill and other intangibles 101–9
opex and capex classification 69–74
prepayments and accruals 129–36
provisions and contingencies 137–46
tangible fixed assets and depreciation 86–100
primary
balance sheet 17, 38–48, 49, 50
profit and loss (P&L) 9, 17, 29–36, 49, 50
reliability, relevance and trustworthiness 438–44
statement of changes in equity 32, 155, 173
statement of other comprehensive income 34
financial strategy 300
First-In-First-Out (FIFO) 114, 116, 393
fixed asset register (FAR) 96–7
carrying value 175, 176, 177, 180
depreciation see depreciation
impairment 42, 92, 106, 175–83
(net) book value of 104, 105, 171–2
recoverable amount 92, 175, 177–8, 180
revaluation 105, 149, 154, 165–74
value in use (VIU) 178–9, 180, 181
versus current assets 96
see also intangible fixed assets; tangible fixed assets (TFA)
fixed costs 342, 343, 347, 348, 349, 350, 430, 432
forecasting 328, 347, 352, 353–4, 355, 357, 359, 360, 432, 488
rolling forecasts 434
shrinking visibility problem 434
foreign currency translation reserve 154
forward-looking disclosures 442–3
see also going concern; viability statement
Frasers Group 276
fraud 196–7, 198, 408, 441, 488
free cash flow (FCF) 54, 288, 489
Funding Circle 317
future maintainable earnings 287
GAAP (Generally Accepted Accounting Principles) 4, 9, 33, 66, 190, 191, 440, 489
gains
realised/unrealised 167
versus profits 167
see also capital gains
gearing 52, 138, 262, 263–5, 268, 269, 420, 489
and interest cover, relationship between 264–5, 421
Generally Accepted Accounting Principles see GAAP
going concern 198, 199, 203–4, 251, 418, 489
Goodhart’s law 356
goods received not yet invoiced (GRNYIs) see accruals
goodwill 42, 95, 101, 102–4, 105–9, 391–2, 489
impairment testing 106, 175, 179–80, 405
purchased 101, 103–4, 105–6, 179, 292, 440
Google 290
Greggs
accounting standards 193, 406–7
accruals accounting 373
acid test ratio 416
balance sheet 46–7, 380, 381, 382
cash flow statement 56–7, 374, 382, 383, 384
confirmation statement 409, 410
corporate governance 226, 410–12
credit control 394
debtors and creditors 126–7, 417
Enterprise Resource Planning (ERP) system 23–4, 330
finance director (FD) 375
financial accounting 377
financial statements 2020 445–83
fixed costs 430
going concern statement 260, 418
intangible assets 24–5, 108, 392
interest cover 421
investment appraisal 370, 435, 436, 437
investor relations team 376
leased assets 391
management accounting 330, 377
operating profit margins 413, 414
prepayments and accruals 135–6, 396–7
profit after tax (PAT) 379
profit maximisation 429
publication of accounts 215, 409
retained earnings 379
return on capital employed 238, 412, 414
revenue recognition 67–8, 384, 385
shares 402
value in business model 340, 429
variable costs 430
viability statement 419
whistleblowing policy 226, 412
working capital cycle 417
working capital days 416
GRNYIs (goods received not yet invoiced) see accruals
gross profit 31, 377–8, 413–14, 489
gross profit margin (GPM) 232, 412, 413–14, 489
group accounts/accounting 154, 157–64, 189, 402–3, 489
Grubhub 290
historic cost accounting 105, 165, 167, 169, 171, 172, 189, 404, 438–9
HMRC (Her Majesty’s Revenue and Customs) 75, 80, 81
Hyundai, engine recall 139
IASB (International Accounting Standards Board) 190
impairment 42, 175–83, 405–6, 441, 489
external and internal indicators of 176, 177
testing 92, 106, 175, 179–80, 405
income 489
commercial 64
see also revenue
income statement see profit and loss (P&L) account
income-based valuations 286, 287–8, 423
discounted cash flows 286, 288, 423
incremental budgets 357–8, 434, 489
indefinite (or infinite) life assets 95, 105–6, 391–2
indexation allowance 77
information in the public domain 207–15, 409–10
initial public offering (IPO) 305, 306, 489
insolvency 151, 241, 243, 251–61, 302, 418, 490
balance sheet (technical) 255–6, 418
legal support 254
institutional shareholders 222–3, 307
insurance, debt 123
intangible fixed assets 40, 42, 95, 101–9, 391–2, 490
amortisation 95, 105–6, 390, 392, 485
valuation 292
interest 51, 52, 76, 312, 314, 315, 316
tax deductibility 300, 312, 313
interest cover 262, 264–5, 315, 421, 490
internal rate of return (IRR) 365, 366–7, 368–9, 437, 490
International Accounting Standards Board (IASB) 190, 191
international accounting/financial reporting standards (IAS/IFRS) 66, 189, 190–2, 489
inventory see stock
investing activities 51–2, 490
investment
minimising versus maximising 234
return on see annual yield; internal rate of return (IRR); return on investment (ROI)
timing of 367
investment appraisal 341, 362–70, 434–7
annual yield method 362, 364–5, 435–6
discounted cash flow techniques 362, 365–7
internal rate of return (IRR) 365, 366–7, 368–9, 437
net present value (NPV) 365–6, 368–9, 436–7
payback period (PBP) method 362, 363–4, 367, 435, 491
investor ratios 13, 271–84, 421–3
invoice factoring 123
invoice finance (IF) 317
IRR see internal rate of return
JIT (just in time) stock management 111, 113, 243
Just Eat 290
KKR 304
land and buildings 86, 95, 96, 105, 189–90, 389
fixed charges 318
large businesses
audit 201
disclosure requirements 208, 211–13
LDC (Lloyds Development Capital) 304–5
Learndirect 304
ledgers, debtor and creditor 121
legal obligations
auditors 197
capital reserves creation 154
directors 207, 208–9, 252, 441, 444
and group companies 160
and provisions 141
tax 75
leveraged buyout (LBO) 304
liabilities
in the balance sheet 38, 39, 40, 41, 43, 44, 96, 439, 440
hidden 439
long-term (non-current) 40
non-controlling interest (NCI) 162
operating leases 440
provisions and contingencies 137–46, 292, 397–400, 440
Lidl 338
limited liability 207
liquidity 12, 41, 240–50, 302, 415–16
and solvency, difference between 419–20
liquidity ratio 247–8, 253, 415–16
listed companies 210
corporate governance 218
directors’ remuneration 211
disclosure requirements 211–13
financial reporting standards 189
return to private ownership 307
see also public limited companies (PLCs)
loans, long-term 316
long-term assets see fixed assets
long-term liabilities 40
long-term projects 7
long-term solvency see under solvency
losses
management accounting (MA) team 14, 18, 376
management accounts packs (MAPs) 18, 323–31, 427–8
management accounts/accounting 6, 12, 18, 32, 323–31, 352, 376–7
market values 43, 88, 105, 170, 190
materiality 490
Maxwell Communications 217
minority interest 162
multi-component transactions 62–3
multinational corporations 82
multiple obligations, provision for 142
multiples valuation method 286, 287–8, 423
national insurance contributions (NICs) 78
net asset value (NAV) 293
net assets 34, 38, 39, 44, 104, 105, 490
net book value (NBV) 87, 88, 93, 171–2, 490
net present value (NPV) 365–6, 368–9, 436–7, 491
net profit 31
net profit margin (NPM) 138, 232
net realisable value (NRV) 114–15, 440
net working capital 490
nominal ledger 16, 17, 377, 491
nomination committee 221
non-controlling interest (NCI) 162, 491
non-listed companies, financial reporting standards 189
Northern Rock 217
obligations, provisions for 141, 142
onerous contracts 140
operating activities 51, 53, 491
operating cash flow 51, 53, 54, 383, 384
operating expenses 31
operating leases 440
operating profit 31, 314, 349, 350, 377–8, 383, 384, 413–14, 491
operating profit margin (OPM) 232, 235, 413–14, 491
opex (operating expenditure) 69–74, 386, 491
opportunity cost of money (capital) 365, 366, 436
ordinary (equity) shares 148, 152, 153, 300, 308–9, 402
ordinary shareholders 148, 149, 152
organisational control, budgeting as means of 354
ownership
and debt finance 313
PAT (profit after tax) 236, 237, 378–9
payback period (PBP) 362, 363–4, 367, 435, 491
PAYE (Pay As You Earn) 77–8, 491
payroll 13
PBIT (profit before interest and tax) 236, 237, 421
PBT (profit before tax) 236
PCPI (Private Company Price Index) 287–8
peer-to-peer (P2P) lending 316–17, 487
performance measures
and balance sheet 41
long-term solvency 13, 262–70, 419–21
profitability 12, 32, 231–9, 412–14
planning
and budgeting and forecasting 353
PLCs see public limited companies
Polly Peck 217
preference dividends 272
premiums, business valuation 290–1
prepayments 6, 18, 42, 129–36, 381, 396–7, 491
prescribed person 222
price earnings growth (PEG) ratio 280–1
price/earnings ratio (P/E) 272, 274–5, 278, 280, 287, 423
forward 281
prices/pricing 332–40, 341, 430
competitors 334
discrimination (customised/personalised) 337–8, 491
dynamic (or demand yield) 337
margins and mark-up 336–7, 430
reviews 334
value-based 332, 333, 334, 430
principal-agent risk see agency risk
private companies
corporate governance 218
solvency assessment 255
Private Company Price Index (PCPI) 287–8
private equity (PE) 304–5, 491
product mix 234
product and service combinations 7, 62–3
professional bodies for accountants 22
and credit 374
gains versus 167
maximisation strategies 332–3, 428–9
negative goodwill as 106
net 31
non-controlling interest (NCI) 162
operating 31, 314, 349, 350, 377–8, 383, 384, 413–14
retained see retained profit
sales revenue and 344, 345–7, 349–50
tax on (corporation tax) 76, 80, 486
underlying 33
profit after tax (PAT) 236, 237, 378–9
profit before interest and tax (PBIT) 236, 237, 421
profit before tax (PBT) 236
profit and loss (P&L) account 9, 17, 29–37, 39, 49, 50, 149, 208, 353, 380, 410, 441
profit margin
profit to volume ratio see contribution percentage of sales (CPS) ratio
profitability performance measures 12, 32, 231–9, 412–14
Prompt Payment Code 244
prospectus 307
provisions 6, 18, 42, 50, 137–46, 397–9, 492
Prudential Regulation Authority (PRA) 277
public domain, information in 207–15, 409–10
Public Interest Disclosure Act (1998) 216, 219
public limited companies (PLCs)
corporate governance 217
directors’ remuneration 211
financial accounts 208, 209, 409
see also listed companies
qualifying disclosures 222
RBS 217
recoverable amount of an asset 92, 175, 177–8, 180
redeemable shares 153
reducing balance depreciation 89, 93, 390
reform, audit and corporate governance 197, 443–4
refurbishments 70
regulatory environment
external financial audit 6, 195–206, 407–9, 438, 485, 488
information in the public domain 207–15, 409–10
see also accounting and financial reporting standards; corporate governance
related parties 158
remuneration, directors’ 210–11
remuneration committee 221
repairs 70
reputation 102
capital 42, 147, 148, 149, 150, 151, 153–4, 400, 401
capital redemption 154
distributable 149
foreign currency translation 154
revaluation 147, 149, 154, 165, 172, 173
revenue 42, 147, 149, 150, 400
share premium 147, 148, 149, 153
residual value of an asset 90, 91
restructuring 140
retained profit (retained earnings) 31, 32, 379, 492
see also revenue reserves
retentions, cash 7
return, definitions of 233, 236
return on capital employed (ROCE) 41, 45, 138, 169, 171, 192, 237, 412, 414
return on equity (ROE) 41, 44, 237
return on investment (ROI) 231, 233–8, 412, 492
return on net assets (RONA) 44, 237
return on total assets (ROTA) 237
revaluation 42, 43, 91, 149, 165–74, 175, 190, 404
revaluation reserve 147, 149, 154, 165, 172, 173
see also income; sales
revenue expenditure see opex (operating expenditure)
revenue recognition 6, 7, 61–8, 384–5, 441
revenue reserves 42, 147, 149, 150, 400, 492
risk 302
financial see financial risk
ROCE see return on capital employed
ROE see return on equity
ROI see return on investment
rolling budgets and forecasts 358–9, 434, 492
rollover relief 77
RONA (return on net assets) 44, 237
ROTA (return on total assets) 237
Royal Dutch Shell 52
Saga 179
break-even 344–5, 346, 347, 348
to working capital ratio 246
see also revenue
Sarbanes–Oxley Act (2002), US 220
scarce resources, budgeting and identification of 353
secondary dealing 148, 401, 492
service businesses
and audit 200
cost of sales 31
‘stock’ 115
see also product and service combinations
service mix 234
share capital 147, 148, 152–3, 401–2
share options 281
share premium reserve 147, 148, 149, 153
and insolvency 252
pre-emption rights 308
earnings per share see earnings per share (EPS)
initial public offerings (IPO) 305
ordinary (equity) 148, 152, 153, 300, 308–9, 402
public offering 307
redeemable 153
secondary dealing 148, 401, 492
short-term assets see current assets
short-term (current) liabilities 40, 44
short-term finance 244
significant influence 160–1, 403
single obligation, provision for 142
size and disclosure requirements 208, 211–13
small businesses
abridged accounts 208
cash flow statement exemption 55
directors’ remuneration 210–11
disclosure requirements 210–11, 211–13
equity finance 314
management accounts packs (MAPs) 325
solvency 492
and liquidity, difference between 419–20
performance measures 13, 262–70, 419–21
short-term 41
special purpose acquisition companies (SPACs) 305–6
standards see accounting and financial reporting standards
start-up businesses
debt finance 314
statement of changes in equity 32, 155, 173
statement of other comprehensive income 34
statutory financial accounts 11, 19, 207, 208, 492
see also financial statements
‘stepped’ fixed cost 348
Stewardship Code 223
stock 41, 50, 96, 110–19, 121, 381, 392–3, 416, 440, 492
cost versus net realisable value (NRV) 114–15
JIT (just in time) management 111, 113, 243
stock turnover 113
stocktakes 114
year-end accounting 114
straight-line depreciation 89, 90, 94, 390, 391
sum of years’ digits depreciation 89, 93, 94
suppliers
managing 124
Takeaway.com 290
TALCL (total assets less current liabilities) 45, 236, 237, 493
tangible fixed assets (TFA) 40, 86–100, 389–91, 493
depreciation 76, 81, 86, 87–90, 92–5
net book value (NBV) 87, 88, 93
profit/loss on disposal 91
revaluations 91
useful economic life 87
valuation 291
capital allowances 81
compliance yield 81
and debt finance 300, 312, 313
effective tax rate 83
evasion 80
indexation allowance 77
penalties and interest 79
on profits (corporation tax) 76, 80, 486
relief for losses 82
rollover relief 77
tax charge 76
tax rate 76
value added tax (VAT) 76, 78–9, 80, 387, 389
TDR Capital 305
technical insolvency 255–6, 418
Tesco 61–2, 64, 65, 244–5, 338
time/timing
and accruals accounting 6
and the balance sheet 41–2, 441–2
and budget-setting 355
and financial accounts 325
of investment 367
and profit and loss (P&L) account 32
time value of money 365
top line see revenue
total shareholder return (TSR) 272, 278–9
training costs 95
trial balance (TB) 17, 377, 493
true and fair 200, 202, 439, 493
TSB 102
see also income; revenue
Uber Eats 290
UK
accounting standards 187–8, 188–9, 190
credit rating 319
UK Corporate Governance Code (The Code) 216, 217–18, 219–21, 257, 411
Ultra Low Emission Zones (ULEZ) 176
US
accounting standards (US GAAP) 66, 190, 191
corporate governance 220
valuation
business see business valuation
intangible fixed assets 292
value differentiators 333–4, 429
value in use (VIU) 178–9, 180, 181
value-based pricing 332, 333, 334, 430
valued added tax (VAT) 76, 78–9, 80, 387, 389, 493
variable costs 342, 343, 347, 348, 349, 350, 430, 431
variances 21
viability statement 257–8, 419, 442–4
volatility, of inherent goodwill 102, 103
Volkswagen, diesel emissions scandal 139
volume discounts 348
The Wates Code 218
weighted average cost of capital (WACC) 368, 493
WhatsApp 290
whistleblowing 216, 218–19, 222, 411–12, 493
Wirecard 197
work in progress (WIP) 110, 115
working capital 12, 41, 51, 121, 151, 415, 417
cycle 241, 242, 243, 244–5, 246, 248, 253, 417
sales ratio 246
YouTube 290