Steps on the road to common global standards

More than 100 countries on all five continents require or permit the use of international financial reporting standards or are converging with them.

This work is overdue and of critical importance. It has, however, become bogged down in divisions on such issues as: the objectives of financial statements; whether the perspective should be forward- looking or historic; whether items should be measured at fair value or some form of cost; whether markets are efficient or not.

Click here to read more on Ian Mackintosh article who is chairman of the UK's Accounting Standards Board

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Learning Curve Theory

Learning Curve Theory is concerned with the idea that when a new job, process or activity commences for the first time it is likely that the workforce involved will not achieve maximum efficiency immediately. Repetition of the task is likely to make the people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. Eventually the learning process will stop after continually repeating the job. As a consequence the time to complete a task will initially decline and then stabilise once efficient working is achieved. The cumulative average time per unit is assumed to decrease by a constant percentage every time that output doubles. Cumulative average time refers to the average time per unit for all units produced so far, from and including the first one made.

Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.

Areas of consequence:
A Standard Costing …

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