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Financial Decision Making - Essay Example
In today's fast changing economic environment, competitiveness, in terms of cost and productivity, has become the key to success for any productive enterprise. The task of managing finance has traditionally been entrusted to financial executives, but in the changed scenario, such a responsibility has become very relevant at all the key decision making points in an organization…
Therefore, it won't be an exaggeration to say that finance is the lifeblood of all enterprises. This is particularly so when economics are undergoing structural changes and economic reforms are in the making to introduce greater elements of competitive forces. In a competitive environment managers are faced with a challenge to compete for resources and to find a better utilization of such resources. Finance is a specialized subject in itself but it draws heavily on other related functions like marketing, production, personnel, purchase etc. Drury (2004, p.5) states "Management accounting is concerned with the provision of information to people within the organization to help them make better decisions and improve the efficiency and effectiveness of existing operations"
(Lev, 2001) stated that existing financial accounting standards sharply distinguish between physical and intangible assets. While physical assets (e.g., property, plant, and equipment) are valued on the balance sheet at the price paid to obtain them, less accumulated depreciation, intangible "assets" are expensed as incurred. Accounting is therefore considered an integral part of the knowledge management within an organization. ...