Financial Statements

Capitalized value, or cost, is the sum of the all ANNUAL equivalent revenue payments and/or costs, divided by the interest rate involved, for infinite compound periods. Basically, how much revenue that project will generate or require if it is needed indefinitely long.

Factor tables make calculating the annual equivalent values fairly easy. The formula for calculation is:

A( 1/i )

Where A is the sum of annual equivalent values and i is interest rate.

Interim management is the temporary provision of management resources and skills. Interim management can be seen as the short-term assignment of a proven heavyweight interim executive manager to manage a period of transition, crisis or change within an organization. In this situation, a permanent role may be unnecessary or impossible to find on short notice. Additionally, there may be nobody internally who is suitable for, or available to take up, the position in question. Although there are historical antecedents (like the Roman dictatorship), the concept of interim management is usually believed to date back to the 1970s, when, in the Netherlands, permanent employees were protected by long notice periods and companies faced large costs for terminating employees. Hiring managers on a temporary basis was a solution.

There are several factors that make interim management the popular resourcing option that it has become today: # Speed. Interim managers can be in place within days as opposed to weeks (essential when time constraints are paramount). # Experience. Interim managers will be more than qualified for the position they are taking on and will therefore be stepping down in responsibility. They will also have past experience of similar challenges to the ones they are about to face. They should be equipped to have an immediate effect and be productive from the outset, minimising the risk of things going wrong and, more importantly, ensuring success. # Objectivity. Unencumbered by any previous involvement in company processes or staff relationships, interim managers should provide a fresh perspective and be free to concentrate on what's best for the business. # Accountability. Rather than taking on a purely advisory role (as a management consultant would), interim managers are responsible and accountable line managers who will implement and manage a business or project in their own right. # Effectiveness. Operating at or near board-level gives interim managers the authority to effect significant change or transition within a company - unlike a temp, they're not just there to 'hold the fort'. # Commitment. Interim managers are typically committed to an interim career. For them, this is never just something they are doing until a suitable permanent position is found. A good interim manager should enjoy the challenge of the different assignments, take great pride in maintaining the highest standards while realising that they are only ever as good as their last job. There are a number of different business situations that could result in the need for an interim manager. Typically, these could be situations such as crisis management, sudden departure, illness, death, change management, managing change or transition, sabbaticals, MBOs and IPOs, mergers and acquisitions, and project management. The interim management concept has now taken root in the UK, Germany, and Belgium, and is spreading elsewhere, most notably in Australia, the US, France, and Ireland. * Phase 1 : Select the manager and confirm the assignment The interim manager should be able to quickly adapt and analyse, to work autonomously, to be result oriented, stress resistant, communicative, etc. Also he must clearly understand the objective of his mission, potential deviations, means at his disposal and the company he gets involved with. * Phase 2 : Prepare the assignment Preliminary meetings should be used to gather information on the market, the company, the operational rules, the current businesses and the staff. Once on the job, he will have to quickly get his own opinion on many issues and persons; thus, all the information previously gathered will make this work easier for him. * Phase 3 : Operational start of the assignment The new manager should prepare his arrival well to ensure that his he gives an impression of authority and serenity right from the beginning. He will have to quickly implement the first levers of power: set up a management committee, build a circle of trustworthy people who will be his sources of information, etc... In this third phase, he quickly imposes his mark by setting the first rules and by taking some safe decisions. * Phase 4 : Observe, analyse … and navigate at sight When the circumstances are favourable, the transition manager takes some time to study the environment he is in charge of before determining how to achieve the defined goal. Mostly he must act quickly though. He may even have to take important decisions right from the first day. In that case he must do everything at once and to the best of his abilities - manage, observe and analyze the company in order to be able to get to the following phase as soon as possible. * Phase 5 : Action plan definition The action plan must be a mix of ideas from the interim manager, bringing an external point of view and expertise, and the best ideas from his staff who will feel valued when their opinion has been taken into account. Sometimes circumstances need a quick reaction and priority changes. It is very important though that some actions with strong impact are carried out as soon as possible. * Phase 6 : Execution and communication Once the interim manager has established his leadership and the action plan has been announced, he needs to prove himself. The action plan must remain the axis of the assignment. It can be adapted if some actions prove irrelevant or unfeasible. The regular publication of its progress is vital to show the team as well as the client the progress made to reach the objective. * Phase 7 : Power transfer Once the objective has been achieved, the interim manager finishes his mission by transferring to the succeeding management all his knowledge regarding the entity he was in charge of, the progress report of the action plan and his advice for the future. * Step 1 - Be clear about why you need an interim manager and define your objectives in a written brief. This helps providers to fully understand your requirements and enables them to find the most appropriate interim executive for your organisation * Step 2 - Secure budget approval before engaging a service provider. Interim management is a high-value solution to address key projects or meet urgent leadership needs. Understanding the benefits the assignment will bring is essential to setting and approving an appropriate budget prior to hire * Step 3 - Ensure the key sponsor of the interim executive controls the hiring process and is involved in the selection. Nominate a point of contact responsible for providing ongoing, swift and responsive decision-making (the world of interims moves fast!) * Step 4 - When selecting an interim provider ask for proof of their credentials: details of past assignments, their client base, insurances and processes * Step 5 - Insist on a face-to-face briefing with the interim provider prior to engagement. This is a people business, and you need to meet the people with whom you are working * Step 6 - Expect a carefully selected shortlist and small number of CVs, who the service provider knows or has/will interview. You are paying them to find the right person, not inundate you with CVs * Step 7 - Ensure that your provider gives you written Terms and Conditions, Pricing Schedules and the specific details before signing the contract * Step 8 - Expect a full documentation pack upon contract including notes of reference checks * Step 9 - Expect the provider to keep in touch with you and the interim once the contract is up and running, with regular feedback and guidance * Step 10- Expect an end of assignment report, to help with your internal audit and governance and gain any last insights from the interim

Types of Errors:

Errors affecting Trial Balance (or Errors Disclosed by Trial Balance):

If the Trial Balance does not tally, it will indicate that certain errors have been committed which have affected the agreement of the Trial Balance. The accountant will then proceed to find out the errors and ultimately the errors will be located. Such errors are called 'Errors Disclosed by Trial Balance or Errors which affect the agreement of Trial Balance. Until such errors are rectified, the Trial Balance will not agree. Some of these types of errors are as follows:

Wrong Casting: If the total of the Cash Book or some other Subsidiary Book is wrong, the Trial Balance will not tally. For example, the total of the Purchase book has been added Rs. 2000 in excess. When this total will be posted to the debit side of the purchase account, it will also show an excess debit of Rs. 2000 and hence, the Trial Balance will not tally.

Posting to the Wrong Side: If instead of posting an amount on the debit side of an account, it is posted on the credit side, or vice versa, the Trial balance will not tally. For example, goods for Rs. 2000 from Gopal. If instead of posting the amount on the credit side of Gopal's account it is posted to his debit, the debit side of the Trial Balance will exceed the credit by Rs. 4,000.

Posting of Wrong Amount: The Trial Balance will not tally if the posting in an account is made with an incorrect amount. For example, goods for Rs. 600 have been purchased from Mahendra. If, it has been correctly entered in the Purchase Book or purchase account, but while posting to Mehendra's account, in credit side (correct side) the amount posted is Rs. 60 instead of Rs. 600, the Trial Balance will not tally.

Omission of Posting of One Side of an Entry: For example if Rs. 500 have been received from Ram and correctly entered in the Cash Book or Cash Account but if it is omitted to be posted on the credit side of Ram's Account, the Trial Balance will not tally.

Double Posting in a Single Account: For example if Rs. 500 have been received from Shyam Lal and correctly entered in the Cash Account, but if it is posted twice on the credit side of Shyam Lal's account, the Trial Balance will not tally.

Errors of Totaling and Balancing of Accounts in the Ledger: Errors may occur in the totaling of debit or credit sides of accounts in the Ledger or in the balancing of accounts in the Ledger. Because the balances of accounts are transferred to the Trial Balance, Then the Trial balance will not tally.