The cost of a non-current asset includes all reasonable and necessary costs incurred to place the asset in a position and condition ready for use, plus all costs incurred which enhance the future econmic benefits of an asset beyond the initial acquisition.

Materiality is a term used to indicate the relative importance of a non-current asset to an entity. In general, an item is material if it is sufficiently important to influence the economic decisions of users on the basis of financial statements.

Prepayments are payments in advance. If the benefit has been already consumed then it counts as an expense. Otherwise it is an current asset.

Inventories can be a significant investment and asset for more entities. There is an opportunity cost between the expense of holding an excessive inventory and the prospect of lost sales when an inventory is not available.

Raw materials are the inputs in a productive process whilst work in progress are incomplete goods. Finished good are ready for immediate sale.

Raw Materials -> Work in Progress -> Finished Goods -> Sales

The income statement (statement of performance) relates to a period of time. The regular production of an income statement allows managers to compare actual performance against the budget. The statements are normally for internal consumption only. The purpose is to measure profit, but summarising the income for that period and deducting the expenses incurred in earning that income.

The balance sheet (statement of position) shows all the resources controlled by an entity and all the obligations due. The business entity principles asserts that transactions, assets and liabilities that relate to the entity are accounted separately, irrespective of whether the entity is recognised as a separate legal or taxable entity.

Wealth is a static measure and represents stock at a particular point in time. This stock can change over time. The difference between wealth at two time periods is the profit or loss for that time period.

ProfitPeriod1 = Wealth1 - Wealth0, ProfitPeriod2 = Wealth2 = Wealth1 etc.

The major influences on financial reporting for companies in Australia are; the AASB (Australian Accounting Standards Board) Framework, accounting standards (such as the International Accounting Standard Board), UIG (AASB subcommittee, Urgent Issues Group) interpretations, the Corporations (or other) Act, and stock exchange listing requirements. The aim of Not-for-Profit-Enterprises is use its resources in an efficient manner to best achieve the objectives of the organisation.

Accounting is about quantitative information that is usually financial in nature. It should provide useful information for making decisions concerning the allocation of scarce resources and opportunity costs. Management accounting is primarily directed towards internal use and decision making, and is unregulated. Financial accounting for external review and evaluation and is regulated. Management accounting is used for stewardship, planning, control and decision making.

The major elements of the human resource management process can be summarised into (HRM) three key areas:

• attracting a quality workforce: this involves human resource planning, job analysis, recruitment and selection
• developing a quality workforce: this involves orientation, socialising, training and development and performance management
• maintaining a quality workforce: this involves career planning, work-life balance, employee retention and turnover, remuneration and benefits packages and labour-management relations