The Income Statement and Changes in Equity

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

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.

The Financial Reporting Framework

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.

Introduction To Accounting

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.

Human Resource Management

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


Communication performs many different functions within the organisation, ranging from conducting routine transactions through to informing staff about special events (such as relocation or reorganisation). Managers use various channels and modes of communication to gather the information they need for decisions (including information about the external environment), to provide direction for staff, to inform customers and suppliers, to negotiate with partners and to liaise with other departments.

Motivation and Teams

Motivation is a management technique, which is closely associated with leadership . Is motivation primarily an internal (or intrinsic) capability that an individual brings to the job or is it the responsibility of management and the organisation to provide a motivating environment (i.e. external, or extrinsic motivation)?


Managers can learn a great deal about leadership and how leaders can inspire others by examining leadership theories and observing leaders whom they admire. A useful place to start in understanding leadership is to notice how often people distinguish between leaders and managers. There is good reason for this. Generally, leaders are inspirational and charismatic, while managers are effective and productive. Leaders are people-focused, while managers are process- and outcomes-focused. Leaders generally empower, while managers generally control.

Plans, Decisions and Measures

In their day-to-day work, managers must ensure that the right things are done in the right way. This involves evaluating situations, making decisions, setting priorities and planning; and then monitoring the outcomes of these decisions and activities. In this topic we look at some of the key skills that are required to complete these activities successfully.