Webcast: Cost Accounting, R.I.P.: Cost Accounting Is Opinion, Cash Flow Is Fact (XCCOACR20)
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Entities focus on cost accounting data rather than the factors that influence the data. Vast sums are spent to allocate costs that have nothing to do with cash. Instead, start with value, determine price, then justify costs that can incur profits.Since you can calculate different costs using the same data it's obvious that costs do not represent cash. Cost accounting confuses metrics with measurements.

1/15/2020
When: January 15, 2020
10:30 AM until 2:00 PM
Where: Webcast
CalCPA
4193560B
United States
Presenter: Ronald Baker


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Acronym XCCOACR20
CPE 4 hours
Vendor CalCPA
Category
Accounting & Auditing
Level Overview
Yellow Book? No
Registration Fees
Members* $120
CPA Non-Members $188

*The member rate applies to LCPA members, other state CPA society members, and non-CPA staff of LCPA members. To register online, use the ‘Register’ button above. To register by phone, call the LCPA Member Service Center at 800.288.5272 or 504.464.1040, Monday through Friday, 8am to 5pm.

Texas CPAs: Our Texas State Board of Public Accountancy Sponsor number is #010423.

Course Description

Entities focus on cost accounting data rather than the factors that influence the data. Vast sums are spent to allocate costs that have nothing to do with cash. Instead, start with value, determine price, then justify costs that can incur profits.

Since you can calculate different costs using the same data it’s obvious that costs do not represent cash. Cost accounting confuses metrics with measurements. There are three primary reasons cost accounting is a bad practice: 1) You have to create and force math and relationships that do not exist; 2) By doing this, you lose touch with your operations; and 3) You create meaningless numbers that people consider as gospel, when in reality they are nothing but opinions.

The lesson is that a company needs to start with value, then determine price, which finally justifies the costs that can be profitably incurred to produce a good or service desired by customers. It seems so obvious to constrain your company with a final price before you begin to incur any costs, yet this practice is not widely followed, despite its proven successes. Costs are, no doubt, important to consider, but the crucial distinction is when they are considered, and what measures are to be used.

Objectives

  • Identify why modeling cash flow and capacity is superior to cost accounting.
  • Recognize the Adaptive Capacity Model.
  • Determine the difference between metrics and measurements.
  • Recognize Segall’s Law: A person with one watch knows what time it is; a person with two watches is never quite sure.

Major Topics

  • Modeling cash flow and capacity
  • Adaptive Capacity Model
  • Segall's Law

Designed For:

Accounting and financial professionals.

Prerequisite: None

Advanced Prep: None

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