An unusual question and a sensible question came in together ... I answered the sensible one! Odd one: I have been told that THere's a great web site for Queries... Could you please give me the address please? thx. Sensible one: I have been searching for more details information about "off balance sheet financing", most of the definition related to joint ventures, R&D partnerships, and operating leases. However, the essay I need to write is about the FRS5 "Reporting the substance of Transactions" distingush between items that should be included in the balance sheet and those that should not... what is it related to Joint Venture,,partnership?? What kind of things shall I write to make more sense?????? Here's what I told this chap! Dear Lau, I don’t know what Queries web site you mean: is it for accounting, computing … ? I have to say that I am not an expert on financial reporting standards but here are a couple of pointers. Go to this page to see a list of library resources that will help you here: this assumes you are able to use a good English language library. The link on this page to Substance over Form didn’t work for me [UPDATE: the custodian of that list, Chris Lamb, has written to tell me that the link has now been fixed]; but this one did: this one There is a link on that second page to a case study that you might be able to use: this case includes discussion of UK Standards as well as IAS and others. Here’s an article from the ACCA I found this by searching the ACCA web site with reporting the substance of transactions. Repeat that search and you will find other useful links to articles and so on … such as this one From the UK government here is a brief summary about FRS5 and the PFI and in similar vein but much more comprehensive and here’s a Word document Here’s FRS5 in action in an annual report They know a lot about financial reporting at the Motley Fool so here they are then! Well, that should be enough to get you started: let me know if there’s anything else I can do to help. Best wishes DW

I have finally cracked the lousy lawn case: Starlings! I got up the other day to find a herd (?) of Starlings all over said lawn and there they were taking rich pickings. So I suppose they are the bleeders who have, in fact, eaten all of the grass seed I sowed at the end of last summer that I thought had simply failed to germinate. Gits! They'd better watch out. The back garden contains a host of golden daffodils now. Well, OK, not exactly a host: more of a hostette. But a good showing anyway. Really strong and pretty they are too. My other bulbs are coming up bit by bit, too: dwarf Tulips are pretty in pink at the moment and there's more to come. Off to Birmingham tomorrow. Anyone else going there? DW

Great news for anyone wanting a new ratio analysis resource. Over last summer I put together a series of pages for a business education site on ratio analysis and they have now got it ready to go live ... I think it's good and I'll provide the link once they are ready. Hold your breath it's worth it!! DW

Talking to son Dima the other day and Rene Descartes' dictum cogito ergo sum cropped up, as it does; and since Dima is into using the word ergo in his work at the moment, he was keen to learn this extension. A couple of days later he asked me to repeat the phrase, by way of saying ... er ... ergo tsum ... well, that's what it sounded like and, given my magnificent fluency in the Russian language I launched back with I think therefore I shop! An explanation is painfully needed I hear you cry. cogito ergo sum means I think therefore I am and Rene Descartes is famous as a mathematician of yore, friend of the Queen of Sweden and all round idle Jack! tsum is Russian for a particular department store to be found throughout the former Soviet Union ... it's Gum in Moscow therefore cogito ergo sum was corrupted to cogito ergo tsum ... I think therefore I shop. Oh, flaming Nora, was that worth it? Made me laugh anyway. DW

Vincent wrote to me a while ago and apart from forgetting about him and feeling achamed because of it, here is what I could find for him about labour turnover and labour stability. Duncan, My name is Vincent and I am a final year undergraduate ... currently in the process of collecting data for a disertation on the Analysis of Labour Tournover. Whilst browsing the web for relevant sites I stumbled across your web-site and discovered the following page: Labour Stability at www.duncanwil.co.uk You discuss a Labour Stability ratio and its importance in analysing Labour tournover ... I was also wondering if you had any suggestions of further information which I may find useful, such as web-links which you know of or titles of texts for me to read? I appreciate the time you have taken to read this and look forward to hearing from you. Kindest regards, Vincent After having given Vincent the all clear to use my materials, I then did a search for him that produced the following: Dear Vincent, As promised here are a few pointers for you although I imagine you have already gathered a large number of such things: The Independent Labour Organisation is a must at www.ilo.org although I did a couple of searches and wasn’t fully satisfied! In their KLIM, key indicators of the labour market, section they have a lot of interesting articles that may be of use to you. The european industrial relations observatory on-line has a basic article for you but gives some costs relating to labour turnover by occupational groupings. You might find their navigation bar on the left of the page useful. Although it has been written in the most appalling academic language, you might tease something from this. They have some interesting diagrams at the end of their paper. This might be a stepping off point for several links: training press releases Around 5 years old and based on 1990-91 data this paper claims to be innovative and is probably worth a read if you haven’t seen it before If you want to be sector specific this kind of thing is useful Since I’ll be sharing this search with other people, don’t forget the page on my own web site (see above) ... this is the only page I can find that discusses labour STABILITY, by the way … no, here’s another one ... a very comprehensive introduction to this area with suggestions for further reading If you are like me and have an obsession for calculations, take a look at this Australian site entitled Costing Labour Turnover ACAS has a glossary of terms that looks useful despite their astonishing background graphic!! Well, Vincent, that seems to be the best I can do for now. Once more my sincere apologies for forgetting about you for a while and I hope you find these pointers useful. Best wishes DW

In an idle moment I went to a web site that claims to be able to find jobs for everyone. I carried out a search for overseas jobs and was given 19 jobs to select from in ... Glasgow Shropshire Edinburgh Nationwide West Yorkshire ... Now, if I were living in, say, Hungary or Singapore or Guatemala these jobs could be considered to be overseas; but since I'm based in the UK, nay England, then they are hardly overseas are they? DW

I'm almost ready to launch my TRIAL web pages on management accounting ... keep your eyes peeled. It takes a long time to mark up such pages, given the state of my knowladge and the rest of it. Phew! As they say in our poorest daily newspapers! DW

Laura came back with this, concerning Step Costs: see yesterday's posts: Thank you very much for the information. I think the machine example is a very good one! Laura Another satisfied customer! DW

My old email friend Vicki wrote with a problem concerning the entity concept. Here is how I answered Vicki's question. Dear Vicki, All the entity concept tells you is written here Entity Concept at www.duncanwil.co.uk. The addition of the word separate is not important since the separate entity concept is the same as the entity concept! In terms of the situation you are now dealing with, Sophia Smythe, the issue is how the accountant should treat the £2,500 of goods that she has withdrawn for her own use. What you might be suggesting is that this has happened: Debit Cost of Goods Sold a/c £2,500 Credit Stock a/c £2,500 This takes the goods into cost of goods sold and therefore the trading and profit and loss account and therefore it has an effect on profit, reducing it by £2,500. What should have happened is this: Debit Drawings a/c £2,500 Credit Stock a/c £2,500 The effect of this transaction is really that Sophia has effectively withdrawn the £2,500 worth of goods from her capital and the effect of that should be shown directly in the capital account that now falls by the full amount. The profit/loss should be unaffected by this transaction and when you make these adjustments you will see that profit increases by £2,500. I hope this is clear … let me know if not. Best wishes as ever

Good news for a recent correspondent of mine from Italy: By the way, I`ve got an "A" grade for the last two essays (finance and marketing) for which you helped me so much...... Thanks again, Duncan. That was the best grade I`ve received until now. To find you by Internet was really good luck!!! It pays to get involved with www.duncanwil.co.uk DW

Laura wrote with an interesting question Hello, I am an accounting professor ... Last week, we discussed Step costs. I gave an example of step costs (janitors, supervisors) which typically have a large step. A student asked what type of cost would be represented by a small step? Can you provide a good example of a small step cost? I'd appreciate any help you could provide. Laura I replied, semi shamefully, as follows: Hi Laura, An interesting question that I’d never thought about before. Step costs can be looked at from two points of view: step costs such as supervision and management costs step fixed costs relating to costs associated with fixed assets As to size, we could imagine a number of situations that might cover this problem, even if they are all similar situations. A machine could, for example, be highly specialised but only be able to produce 50 units a week. It may be relatively inexpensive to buy and run but if demand grew suddenly from, say, 40 units a week to 75 units a week, a new machine would be needed … this situation contrasts the situation in which a supervisor supervises, say, 30 people … I’m not sure I’ve been as helpful as you would like but in your position I might be tempted to ask the student who asked the question to provide an example in answer to his own question! Alternatively, I have in the past added such a question to the end of an assignment or term paper for a few additional marks. At least someone somewhere will provide a decent solution even if our own brain cells are inadequate! Well, mine anyway! Best wishes and let me know what else you can come up with. DW

Sunday was a gardening day: legs like jelly after a couple of hours hard labour that I haven't done for a while. I tidied up the harb patch a bit, pruned the rose bushes, potted a thyme plant to help it get more established and then planted loads of herb seeds: chives, dill, parsley and a few more. The weather was windy as it tried to blow all of my seeds away ... it failed! I succeeded and am now looking forward to scads of herbs from mid Spring onwards. I also tidied up the netting that the clematis is attached to and that looks much better now: Mrs W wanted to completely redesign the netting but I resisted and carried on regardless. After all ... My football team, Burnley, were playing in the quarter final of the FA Cup and their match was televised ... I finished gardening just in time to wash myself up and settle down to watch the match that Burnley lost 2: 0 to Watford. So, good luck to Watford for the next round: the semi final. Making some progress on my new projects and I'll have a trial series of pages uploaded on a password protected section of my web site shortly ... you need to apply to get a password! Oh, on Saturday I made a ginger cake from the recipe sister Susan gave me and it's an absolute stunner: very simple to make and scrumptious to eat! DW

Richard Jones wrote I wonder if you can help. ... how to treat expenses such as professional fees, decorating etc that have been incurred pre-opening and which have been paid for out of start up capital. If I show the start up capital as the capital employed how do i show these 'expenses'in the top half of teh balance sheet. I hope you can help me Reagrds RJ I replied as follows: If I understand the problem correctly, we have a business that has, say £10,000 capital invested in pre incorporation expenses incurred: professional fees (assume £200), decorating (assume £150)... paid out of the £10,000 If that is correct then do the following: Debit Cash/Bank a/c £10,000 Credit Capital a/c £10,000 Debit Professional Fees £200 Credit Cash/Bank a/c £200 Debit Property Repairs a/c £150 Credit Cash/Bank a/c £150 On the other hand, if you mean: a business that has, say, £10,000 capital invested in pre incorporation expenses incurred: professional fees (assume £200), decorating (assume £150) ... paid out in addition to the capital investment of £10,000 Debit Cash/Bank a/c £10,000 Credit Capital a/c £10,000 Debit Professional Fees £200 Credit Capital a/c £200 Debit Property Repairs a/c £150 Credit Capital a/c £150 Let me know if you think the CPU problem has inflicted my own internal CPU but I think this is what you mean. Best wishes DW

I know I'm a bit late but let me say Congratulations to the women of the world on International Women's Day ... be happy on the 8th of March as they say in the former Soviet Union. Mrs W got a lovely suprise bunch of flowers: delivered to the door by Interflora this afternoon: courtesy of Dima and yours truly. DW