Business Administration 2257 Lecture Notes - International Financial Reporting Standards, General Ledger, Lululemon Athletica

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Lecture One January 7th
“Lululemon does downward dog”
- Can’t keep up with expansions and growth rate
- Many discounts.
- Other companies selling athletic gear may swoop in and take their clients.
Accounting Refresher
- If anything sounds unfamiliar, review the first four chapters of the textbook.
- Katey is panda’s favourite <3
Objectives of financial reporting: providing information for decision making
- Who are the decision makers?
- What kind of decisions are they making?
- When do they want to make decisions?
- What do we need to know as a decision maker?
Internal and external users of accounting information
- Ex: Banks, donors, creditors, financial analysts, government agencies, trade organisations
customers/users, suppliers, current and potential owners
- Int: management, employees, HR
Decisions made with financial information
- Investing, borrowing, extending credit, donating, close a division, start new business, cancel
service, adding new products or services, build new plants, loans, sell shares or bonds, applying
for a new job
Rules:
- “GAAP” Generally Accepted Accounting Principles
o Principles, conventions, practices and procedures/rules
o Based on assumptions
o Included qualitative characteristics
- Rules changed January 1st, 2011
o International Financial Reporting Standards (IFRS)
o Applicable for all publicly traded corporations
o Introduction of GAAP for private companies
- Changes also coming for not-for-profit organisations
Qualitative characteristics
- We focus on counting and measurement.
- Relevance
- Reliability
o Verifiability
o Representational faithfulness
- Comparability and consistency
- Understandability
- Materiality
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