Assignment:
Financial managers must conduct accurate appraisals of potential and realized profits. A distinction must be made between accounting profit and economic profit. An accounting profit is earned when revenues exceed costs and expenses over a particular period of time. Economic profit is the profit remaining after the opportunity costs associated with a financial decision are included.
Losses are a one-time removal or decrease in a business resource or asset. Losses are unrecoverable and unanticipated. Common types of losses refer to the amount that an asset decreases in value over the course of its useful life for your business. All fixed (long-term) assets suffer from depreciation over time and the the differences in the value is what is referred to as a loss.
All sports organizations have a goal of making a profit. In fact, they must make a profit in order to stay in business. However, there are times that an organization gets into a situation where the profit is in jeopardy and they are in danger of having a loss. Explain how the organization's leaders can respond to the financial problems in order to avoid showing a loss. What internal controls can be implemented in order to help avoid financial problems?
Wicker, P., & Breuer, C. (2014). Examining the financial condition of sport governing bodies: The effects of revenue diversification and organizational success factors. Voluntas, 25(4), 929-948.
Winand, M., Zintz, T., &Scheerder, J. (2012). A financial management tool for sport federations. Sport, Business and Management, 2(3), 225-240.
Readings:
1. A financial management tool for sport federations
By Mathieu Winand
2. Inference of economic truth from financial statements for detecting earnings management: inventory costing methods from an information economics perspective
By Hemantha S.B. Herath