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31

BBA Discussion Forum / NBR's tax receipts remain sluggish

« on: April 20, 2014, 06:54:51 PM »

NBR's tax receipts remain sluggish
Growth slowest in seven years
Sohel Parvez

NBR's tax receipts remain sluggish

Revenue collection remained sluggish in the first eight months of the fiscal year, with the National Board of Revenue recording the lowest year-on-year growth in tax receipts for the period in the last seven years.
Between July and February, collections rose 8.66 percent year-on-year to Tk 68,344 crore, according to data from NBR.
Lower receipts from customs as well as falling collection growth in VAT and income tax, the two major sources of revenue, caused the slowdown in revenue collection.
“Falling growth reflects the fall in domestic demand,” said Ahsan H Mansur, executive director of Policy Research Institute.
During the period, VAT collections grew 13.29 percent to Tk 26,192 crore, while the pace of income tax collection growth slowed to 14 percent. Receipts from customs fell 0.86 percent to Tk 20.863 crore.
“The collection of tax at source has fallen as development activities are yet to pick up. Collection of advance income tax from exports and imports was also less than expected,” a senior official of NBR said, seeking to remain unnamed.
The increased tax rebate privileges for investment also caused a fall in income tax collection, he said, adding that if the current pace of collection continues, it will not be possible to achieve the revised revenue target.
Subsequently, the NBR last month revised down fiscal 2013-14's collection target by 8 percent to Tk 125,000 crore.
Mansur said tax collection might improve in the coming months due to political stability, pick-up in imports and increased remittance inflows. But, it may not be enough to achieve the revised target.
“Economic activities will not shoot up overnight to facilitate tax collection growth,” said Towfiqul Islam Khan, research fellow of Centre for Policy Dialogue.
He said the government should fix the next fiscal year's revenue collection target considering the current fiscal year's collection.
“Tax target should be realistic to ensure fiscal balance,” Khan said.

32

MBA Discussion Forum / Bdjobs sells 25pc stake to Australian job portal

« on: April 13, 2014, 06:14:47 PM »

Bdjobs sells 25pc stake to Australian job portal

Bdjobs.com, the country's leading online employment marketplace, has sold its 25 percent stake to the Australian number one job portal, SEEK International, at Tk 38.5 crore.
Fahim Mashroor, founder and chief executive officer of the local job portal, confirmed the deal to The Daily Star, and said the deal to transfer the minority shares to SEEK began one year ago and was finalised recently.
“I am delighted that SEEK is investing in bdjobs. SEEK has a deep understanding of online employment marketplaces and a history of working closely with local management teams."
"We believe this partnership will help accelerate bdjobs' growth in the coming years,” according to a statement.
Jason Lenga, managing director of SEEK International, said: "Bdjobs is well positioned to benefit from increasing internet penetration as well as economic growth. We look forward to working with the bdjobs team to capitalise on the growth opportunities.”
Bdjobs is the leading online employment marketplace in Bangladesh, which SEEK International said has a strong lead in traffic and ad volume metrics and a strong financial track record. Bdjobs has 90 percent market share in Bangladesh.
Mashroor said the main attraction to SEEK International purchasing the minority shares of bdjobs is its high profitability and market shares.
SEEK has valued bdjobs at Tk 150 crore, which may be the highest for any local IT firm.
Bdjobs made a profit of Tk 6.93 crore last year. Its revenue stood at Tk 13.86 crore in the same year, the Australian company said in a statement.
Mashroor, a director of Bangladesh Association of Software and Information Services (BASIS), will remain the largest shareholder in the business post-transaction after selling down his stake to give SEEK its interest in the business.
SEEK is a $5.5 billion company that reaches a third of the world population, he said.
Following the investment, SEEK will have representation on the board in proportion to its shareholding, hold typical minority shareholder protections and will account for bdjobs as an associate. The investment will be funded via SEEK's cash reserves.
Mashroor founded the job portal in 2000 with an investment of Tk 15 lakh only. The company has around 100 employees.
According to the website of SEEK, the company is operating in twelve countries including Australia, New Zealand, China, Brazil, Mexico, West Africa, Nigeria, Hong Kong, Indonesia, the Philippines, Singapore and Thailand.
Founded in Melbourne in 1997, it currently employs over 6,000 people globally.
The deal is in line with SEEK chief executive Andrew Bassat's push to generate well over 50 percent of earnings from offshore operations in coming years. In March the company paid $580 million to acquire online Asian employment business JobStreet, according to The Australian newspaper.
Bangladesh's IT sector is increasingly becoming an attraction for global companies.
Last year, global IT firm Accenture bought 51 percent stake in GPIT, an IT wing of the country's top mobile operator Grameenphone, at $10 million.

33

BBA Discussion Forum / Mark-to-market accounting

« on: April 13, 2014, 06:03:27 PM »

Mark-to-market accounting
From Wikipedia, the free encyclopedia

Mark-to-market or fair value accounting refers to accounting for the "fair value" of an asset or liability based on the current market price, or for similar assets and liabilities, or based on another objectively assessed "fair" value.[citation needed] Fair value accounting has been a part of Generally Accepted Accounting Principles (GAAP) in the United States since the early 1990s, and is now regarded as the "gold standard" in some circles. [1]

Mark-to-market accounting can change values on the balance sheet as market conditions change. In contrast, historical cost accounting, based on the past transactions, is simpler, more stable, and easier to perform, but does not represent current market value. It summarizes past transactions instead. Mark-to-market accounting can become volatile if market prices fluctuate greatly or change unpredictably. Buyers and sellers may claim a number of specific instances when this is the case, including inability to value the future income and expenses both accurately and collectively, often due to unreliable information, or over-optimistic or over-pessimistic expectations.

34

BBA Discussion Forum / BMW recalls half million cars worldwide

« on: April 13, 2014, 05:38:23 PM »

BMW recalls half million cars worldwide


German automaker BMW is recalling almost half a million vehicles worldwide due to an engine part defect, a company spokesman said Friday.
The recall affected models with six-cylinder engines built between September 2009 and November 2011, the spokesman told AFP.
In Germany alone, the number was relatively small at 10,800, because most BMW cars sold were equipped with four-cylinder engines.

35

MBA Discussion Forum / Non-traditional markets show great promise for garments

« on: April 13, 2014, 05:35:25 PM »

Non-traditional markets show great promise for garments

Garment exports to non-traditional markets are rising at a faster rate than to the traditional markets owing to the stimulus package and duty benefits by emerging markets for Bangladesh.
In fiscal 2012-13, garment exports to non-traditional markets such as Australia, Brazil, Chile, China, India, Japan, South Korea, Mexico, Russia, South Africa, Turkey and so on rose 29 percent year-on-year to $2.98 billion, according to data from Export Promotion Bureau.
In contrast, exports to traditional markets of the US, Canada and European Union stood at $18.54 billion last fiscal year, up 10.93 percent year-on-year.
Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh, credited the higher growth to stimulus package from the government and duty benefits from emerging markets such as China, Japan and India.
In a bid to offset any significant drop in garment export figures, the government in 2009 introduced a financial package to encourage garment manufacturers to explore new destinations.
Under the scheme, the government gave 5 percent cash incentive to garment exporters in fiscal 2009-10, 4 percent in fiscal 2010-11 and 2 percent in fiscal 2011-12. The exporters are still receiving 2 percent cash incentive for exporting to the new destinations.
Subsequently, exports to the new destinations took off. Moreover, some countries have also given duty-benefits to Bangladesh during this period.

For example, the Japanese government relaxed the Rules of Origin (RoO) from April 1, 2011, which boosted exports to the country.
Similarly, India extended zero-duty benefit to all products except 25 alcoholic and drug items from November 2011. In 2011, the China government also gave duty benefits to Bangladesh on export of 4,721 products which include garment items.
And more recently, the Chilean government announced duty-free benefits for all Bangladeshi products from January next year. South Korea has also given duty-benefits to some Bangladeshi garment items.
“Besides the financial assistance, the other reasons for higher growth to emerging markets are higher prices and massive campaigns by the garment entrepreneurs,” said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association, the garment makers' platform.
“In the last few years, we campaigned massively to some Latin American countries. This is why our export is also increasing to those countries. Our next focused market is Russia. Russia recently became the member of the WTO, so we have good opportunity to this bigger market.”

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MBA Discussion Forum / Massive shift needed on energy: UN

« on: April 13, 2014, 05:28:51 PM »

A UN report on climate change is expected to call for a trebling of the planet’s use of renewable energy sources such as solar and wind power. The report is also expected to argue that the trend of increased carbon emissions can only be reversed if a “massive shift” in energy use is made, reports BBC. Scientists will also cautiously endorse a shift to natural gas an alternative to carbon intensive sources. The report will be released on Sunday at a press conference in Berlin. It will argue that if significant action isn’t taken by 2030, global temperatures could rise by more than 2 degrees C. Such a rise in temperature would be highly dangerous, the report will argue. Sunday’s report will focus on instructing governments and organisations on how to take action to avoid dangerous climatic change. However, some developing countries have argued that the costs associated with switching energy sources should be borne proportionately by all. The report will criticise the rising use of coal and other fossil fuels among developing countries. It will also argue that the technology already exists for more cleaner, more efficient energy sources. This is the third in a series of highly-anticipated reports by the Intergovernmental Panel on Climate Change (IPCC).

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BBA Discussion Forum / Corporate tax reduction, supportive export policy to hit a purple patch for BD e

« on: April 13, 2014, 05:17:08 PM »

Corporate tax reduction, supportive export policy to hit a purple patch for BD economy


A reduction in corporate tax structure and framing a supportive export policy will help the economy grow further.

According to corporate sector insiders, reduction of corporate tax will encourage the companies to reinvest the money into the business, which is quite beneficial for the economy.

Moreover, retained earnings of the companies will also rise in addition to the better in-flow of foreign direct investment (FDI), corporate insiders said.

"Many of our entities, specially multinational companies are very transparent when it come to pay taxes by the employees as well as by the companies themselves who maintain their books of accounts very transparent to the shareholders and regulators," a foreign company source told the FE.

Their optimism grabbed the attention when National Board of Revenue (NBR) announced its plan to gradually reduce the rate of corporate tax starting from fiscal 2014-15.

" This is indeed a welcome move and is consistent with the recommendations of trade bodies and policy analysts," a source in the Foreign Investors' Chamber of Commerce and Industry (FICCI) said.

FICCI members together form the largest revenue- generating source for the government.

The combined contribution of FICCI members exceeds 30 per cent of total tax revenue collected by the government.

Historically the rate of corporate tax has been high and quite differentiated in Bangladesh.

 In 1991-92, the tax rate was 40 percent in the case of publicly traded industrial companies, 45 percent in the case of non-publicly traded companies and 55 percent in the case of banks, insurance companies and financial institutions.

In a bid to provide support to the stock market, the actual applicable rate of corporate tax in the case of publicly traded companies has been linked to dividend payment. Thus, during 2000-2001 and 2001-02, the stipulated 35 percent corporate tax for publicly traded companies allowed 10 percent rebate on tax if more than 25 percent dividend was declared. In 2002-03, the rate of corporate tax was brought down to 30 percent and 10 percent rebate was allowed if more than 20 percent dividend was declared.

Supportive export policy

Bangladesh's exports to Asia, Middle East and North Africa will grow 15 percent a year over the three years to 2016 on the back of stronger global economic growth, according to a recent study by a leading foreign bank.

The country will see a major shift on its export destinations over the next 20 years, HSBC said in its latest Global Connections Report.   

Bangladesh was also included in the HSBC Trade Confidence Index (TCI) for the first time, and scored 103. This indicates a marginally positive outlook for trade, slightly below China, India, Indonesia and Vietnam.

"It is therefore, absolutely imperative to diversify the export basket and also to run a strong campaign in favour of Bangladeshi products across the world," the market observer opined.

Even though the government could not meet its 2013 target for exports, it is eyeing more than 12% growth in Bangladesh's exports in 2014, from $28bn to more than $30bn.

There should be zero duty / supplementary duty on any export item to raise such earnings from export.

38

Cricket / Unity is the keyword

« on: April 03, 2014, 06:20:34 PM »

An angry version of the Gangnam Style dance, bats being thrown up as high as the spider-cam on the field and celebratory chest-thumps that could have probably gone on to break a rib or two, the party-men from the Caribbean have, yet again, won the hearts of majority of the neutral supporters in town.
Their free-flowing style, combined with their never-say-die attitude, says a lot about why they are often termed as the ambassadors of the T20 format; that majority of the country is vouching for a Caribbean classic despite the presence of two sub-continental teams in the semis speaks for itself.
According to their captain, Darren Sammy, the unique zeal from his side has been the key factor that has held the team together.
"I think it's the most important thing. For us it's even more difficult because we got so many guys coming in with different cultures, countries. We stress a lot on unity and gelling. You know no matter what the situation is you will come through for the team, that itself is motivation," said Sammy.
"When you see your teammates rallying round you and then when you win a game that you're not supposed to win and see them running towards you, that in itself is motivation for you to continue to do that. Even when everything seems gloom we have the belief that the players in the middle can do well," he added.
West Indies' journey to the semis has not been without its share of troubles. After a thumping loss to India, they won two thrillers against Pakistan and Australia -- and on both occasions it was Sammy's thunderous hitting that bailed the West Indies out. His 34 off 13 against the Aussies stole a win while the 42 off 20 broke Pakistani hearts. When asked to explain the secret behind those clean hits, Sammy kept it simple.
"I just stay calm. For me it's just seeing ball, hitting ball and make sure I connect [with ball], because I have been working really hard in the gym to get stronger," said Sammy with a smile.
Today's game against Sri Lanka will be a repeat of the 2012 T20 final which the West Indies won by 36 runs. If a similar result takes place, the West Indies will attempt to become the first team to retain the World T20 title, something that has been the target of the Sammy and company ever since they left the Caribbean.
On a more personal front, the post-World Cup era has not been very kind to Sammy with the player being stripped off the ODI captaincy. While this could have been an aspect for extra motivation, Sammy, who joked that he might lose Test captaincy if his side wins the competition this time around, said that he was happy just to be able to represent the West Indies.
"For me it's never been about whether I am captain or not. I just enjoy playing for the West Indies. Not many people get to wake up in the morning and get to do what they love. Captain or not, it's about giving my best for the West Indies," a resurgent Sammy said.
With the West Indies just two steps away from defending their title, Sammy finished the press conference with a message for the Sri Lankans that depicted the immense amount of confidence that their side is running on.
"I guess the final [2012] will be at the back of their minds, the warm-up game will be at the back of their minds, because they know once the West Indies come up and turn up, they are dangerous."

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MBA Discussion Forum / Bangladesh needs $100b in 10 years for infrastructure: WB

« on: April 03, 2014, 06:15:22 PM »

Bangladesh will have to spend $7.4 billion to $10 billion a year until 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growing population, a World Bank report said yesterday.   
"In total, the country will require between $74 billion and $100 billion between 2011 and 2020 or 7.38 percent to 10.02 percent of its gross domestic product to improve infrastructure," said Luis Andres, one of the co-authors of the report.
Andres was talking to reporters of Bangladesh, Nepal and Pakistan from the bank's headquarters in Washington via a video conference yesterday.
The report -- Reducing Poverty by Closing South Asia's Infrastructure Gap -- is the first analysis of the region's infrastructure needs by the WB.
The lender shared the report with the media at the Dhaka office of International Finance Corporation, the WB's private sector financing arm.
The report said Saarc, the eight-nation bloc, needs to spend as much as $2.5 trillion on infrastructure by 2020 to bring the region's infrastructure to a standard level.
It says the region, which includes Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka, could address its enormous infrastructure needs by tapping private and public sector funds as well as by introducing reforms.
Andres said: "Despite recent rapid growth and poverty reduction, the South Asia region continues to suffer from a combination of insufficient economic growth, slow urbanisation, and huge infrastructure gaps that together could jeopardise future progress."
“It is essential to make closing its huge infrastructure gap a priority,” said the lead economist for sustainable development for the South Asia region at the bank.

Bangladesh will have to give the highest priority to its transport sector, as the report said the country needs to spend between $36 billion and $45 billion for expanding its communication network.
The power sector will require an investment between $11 billion and $16.5 billion to take credible electricity to the poor in the country where about half of the population is still not connected to the national grid.
Improving water supply and sanitation will need a flow of investment of $12 billion to $18 billion, solid waste management $2.1 billion to $4.2 billion, telecom $5 billion, and irrigation $7.7 billion to $11.6 billion until 2020.
According to the report, Bangladesh ranked sixth among eight countries in the region in providing telecom access to its population in 2011. It came seventh in both electricity access criteria and access to improved water.
The country, however, fared well when it comes to access to improved sanitation, as it was placed third.
The country has 0.1 kilometre of road per 1,000 people, which is the lowest in the region. Only 10 percent roads in the country are paved, which, again, is the lowest in the region.
“Many people in South Asia remain unconnected to a reliable electricity grid, a safe water supply, sanitary sewerage disposal, and sound roads and transport networks,” said Philippe Le Houérou, vice president for the South Asia region at the World Bank, in a statement. 
If the region hopes to meet its development goals and not risk slowing down -- or even halting -- growth, poverty alleviation, and shared prosperity, it is essential to make a priority of closing its huge infrastructure gap, said the report.
The report said the task would be difficult but not impossible with a concerted effort by governments in the region, where access to infrastructure compares with Sub-Saharan Africa.
During the video-conferencing, Dan Biller, another report co-author, said the South Asia and East Asia regions have enjoyed similar growth rates for the past 20 years.
"Yet South Asia's access to infrastructure services lags significantly behind both East Asia and Latin America with some access rates comparable only to Sub-Saharan Africa," said Biller, also sector manager of the economics and sustainability group of the Multilateral Investment Guarantee Agency, an arm of the WB. 
According to the report, South Asian policymakers should invest in rehabilitating and maintaining infrastructure assets to deliver services efficiently and sustainably, moving away from the “build, neglect and rebuild” mindset. 
They could reform service providers and ensure financial and operational sustainability so that they can be able to plan and implement sound investment strategies and improve operational performance for the long term.
The report said governments could establish solid and transparent legal, policy and regulatory frameworks in order to attract private investment in line with the best organisational form for each service. They could also decentralise service provision in an appropriate manner.
Le Houérou, who is now in Dhaka, emphasised the bank's strong support for the people of Bangladesh and said he is optimistic about the country's prospects for ending poverty and achieving shared prosperity.
“Against the odds, Bangladesh has achieved sustainable growth that pulled 16 million people out of poverty in the last decade,” he said.
“The World Bank remains committed to working with this dynamic and resilient country to reduce poverty and bring prosperity to all Bangladeshis, especially the poor."
While meeting with Prime Minister Sheikh Hasina to discuss the country's main development priorities, Le Houérou commended the impressive progress Bangladesh has made in poverty reduction, human development, and economic growth.
He said, to achieve the status of a middle income country, Bangladesh needs to do more to narrow the power and transportation gaps, manage urbanisation, reduce climate change impacts and improve the ease of doing business environment and public service delivery.
"The World Bank will work harder here to address infrastructure bottlenecks, especially in the power and transport sectors,” Le Houérou said.


Source: The Daily Star

40

Fashion / নিজেকে স্লিম দেখানোর সহজ ৭টি টিপস্

« on: April 03, 2014, 06:11:58 PM »

(১)যাদের শরীর কিছুটা মেদ বহুল তাঁরা হালকা রঙ এর পোশাক এড়িয়ে চলুন। যে কোনো রঙ এর সবচাইতে গাঢ় শেডটা বেছে নিন পোশাক নির্বাচনের ক্ষেত্রে। কালো, নেভি ব্লু, বোটল গ্রীন, কালচে মেরুন ইত্যাদি রঙ গুলোতে শরীর কিছুটা স্লিম দেখায়।
(২)যারা ওজন সমস্যায় ভুগছেন তাঁরা খুব আঁটসাঁট পোশাক এড়িয়ে চলুন। পোশাক নির্বাচনের ক্ষেত্রে লক্ষ্য রাখুন যেন সেটা খুব বেশি ঢোলা কিংবা আঁটসাঁট কোনোটাই না হয়। এছাড়াও খুব বেশি বড় গলা ও হাত কাটা পোশাক এড়িয়ে চলার চেষ্টা করুন।

(৩)মেকআপের ক্ষেত্রে মুখ কিছুটা চাপা দেখানোর জন্য ত্বকের চাইতে এক শেড গাঢ় প্যান কেক দিয়ে গালের দুই পাশ চাপিয়ে নিন। এরপর ত্বকের রঙ এর ফেস পাউডার দিয়ে উপরে ব্লাশন লাগিয়ে নিন। তাহলে মুখের দুই পাশ ও ডাবল চিন কিছুটা কম বোঝা যাবে।

(৪)যাদের মুখে মেদ বেশি তাঁরা চুল ফুলিয়ে বাঁধবেন না। চুল স্ট্রেইট করে ছেড়ে রাখুন অথবা হালকা করে বেধে রাখুন।

(৫)যারা সানগ্লাস বা চশমা পরেন তাঁরা বড় আকৃতি ফ্রেম নির্বাচন করুন। বেশি ছোট ফ্রেম নির্বাচন করলে মুখের আকৃতি আরো বড় দেখাবে।

(৬)নেকলেস পরার ক্ষেত্রে গলার সাথে এঁটে থাকা নেকলেস পরবেন না। একটু ঝোলানো ধরনের মালা বেছে নিন নিজের জন্য।

(৭)যাদের শরীর মেদ বহুল তাঁরা খুব বেশি চিকন হিল পরবেন না। খুব বেশি চিকন হিল পড়লে দেখতে বেমানান দেখাতে পারে এবং স্বাস্থ্যের ক্ষতি হয়।

41

BBA Discussion Forum / Management by Exception

« on: April 01, 2014, 08:21:20 PM »

Management by Exception is a style of business management that focuses on identifying and handling cases that deviate from the norm.

Management by exception has both a general business application and a business intelligence application. General business exceptions are cases that deviate from the normal behavior in a business process and need to be cared for in a unique manner, typically by human intervention. Their cause might include: process deviation, infrastructure or connectivity issues, external deviation, poor quality business rules, malformed data, etc. Management by exception here is the practice of investigating, resolving and handling such occurrences by using skilled staff and software tools. Good management can contribute to efficiency of business processes. Often in these cases the process will be called exception management, as exceptional cases are not the sole focus of the managerial policy, and exception management (as opposed to management by exception) denotes a more moderate application of the process.

Management by exception when applied to business intelligence consists of focus and analysis of statistically relevant anomalies in the data. While all data is recorded, domain expertise ought to be applied so only data that deviates from what is expected or standard in the business or the industry is brought to the attention of the managers.[1] For example, if all products are selling at their expected volumes for the quarter, except one particular product which is underperforming or overperforming at a statistically relevant margin, only the data for that product will be presented to the managers for further investigation and discovery of the root cause. Management by exception can bring forward business errors and oversights,[2] ineffective strategies that need to be improved, changes in competition[3] and business opportunities. Management by exception is intended to reduce the managerial load and enable managers to spend their time more effectively in areas where it will have the most impact.[1]

Exception management also has an IT application. When writing code, if the programmer sees that there will be an exceptional case where a predefined assumption of the application will be breached,[4] the programmer will need to deal with that exception programmatically from the outset.

42

BBA Discussion Forum / Just in time (JIT)

« on: April 01, 2014, 08:16:34 PM »

Just in time (JIT)

Just in time (JIT) is a production strategy that strives to improve a business' return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals or Kanban (看板?, Kanban) between different points, which are involved in the process, which tell production when to make the next part. Kanban are usually 'tickets' but can be simple visual signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT focuses on continuous improvement and can improve a manufacturing organization's return on investment, quality, and efficiency. To achieve continuous improvement key areas of focus could be flow, employee involvement and quality.

43

BBA Discussion Forum / Activity Based Costing

« on: April 01, 2014, 08:10:58 PM »

 

 Activity Based Costing

Activity based costing (ABC) assigns manufacturing overhead costs to products in a more logical manner than the traditional approach of simply allocating costs on the basis of machine hours. Activity based costing first assigns costs to the activities that are the real cause of the overhead. It then assigns the cost of those activities only to the products that are actually demanding the activities.

Let's discuss activity based costing by looking at two products manufactured by the same company. Product 124 is a low volume item which requires certain activities such as special engineering, additional testing, and many machine setups because it is ordered in small quantities. A similar product, Product 366, is a high volume product—running continuously—and requires little attention and no special activities. If this company used traditional costing, it might allocate or "spread" all of its overhead to products based on the number of machine hours. This will result in little overhead cost allocated to Product 124, because it did not have many machine hours. However, it did demand lots of engineering, testing, and setup activities. In contrast, Product 366 will be allocated an enormous amount of overhead (due to all those machine hours), but it demanded little overhead activity. The result will be a miscalculation of each product's true cost of manufacturing overhead. Activity based costing will overcome this shortcoming by assigning overhead on more than the one activity, running the machine.

Activity based costing recognizes that the special engineering, special testing, machine setups, and others are activities that cause costs—they cause the company to consume resources. Under ABC, the company will calculate the cost of the resources used in each of these activities. Next, the cost of each of these activities will be assigned only to the products that demanded the activities. In our example, Product 124 will be assigned some of the company's costs of special engineering, special testing, and machine setup. Other products that use any of these activities will also be assigned some of their costs. Product 366 will not be assigned any cost of special engineering or special testing, and it will be assigned only a small amount of machine setup.

Activity based costing has grown in importance in recent decades because (1) manufacturing overhead costs have increased significantly, (2) the manufacturing overhead costs no longer correlate with the productive machine hours or direct labor hours, (3) the diversity of products and the diversity in customers' demands have grown, and (4) some products are produced in large batches, while others are produced in small batches.

44

BBA Discussion Forum / Accounting Cycle

« on: April 01, 2014, 07:57:23 PM »

      
Accounting Cycle

Accounting cycle is a step-by-step process of recording, classification and summarization of economic transactions of a business. It generates useful financial information in the form of financial statements including income statement, balance sheet, cash flow statement and statement of changes in equity.

The time period principle requires that a business should prepare its financial statements on periodic basis. Therefore accounting cycle is followed once during each accounting period. Accounting Cycle starts from the recording of individual transactions and ends on the preparation of financial statements and closing entries.
Major Steps in Accounting Cycle

Following are the major steps involved in the accounting cycle. We will use a simple example problem to explain each step.

    Analyzing and recording transactions via journal entries
    Posting journal entries to ledger accounts
    Preparing unadjusted trial balance
    Preparing adjusting entries at the end of the period
    Preparing adjusted trial balance
    Preparing financial statements
    Closing temporary accounts via closing entries
    Preparing post-closing trial balance





      

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BBA Discussion Forum / Stocks snap four-day losing streak

« on: February 20, 2014, 05:29:40 PM »

Stocks snap four-day losing streak


Stocks rebounded Wednesday, snapping a four-day losing streak with improving turnover value as investors went for buying mood at available attractive prices of stocks.

Market analysts said after four session's fall over 174 points, many stocks came to a lucrative price level which encouraged investors to take fresh position anticipating short-term rally.

The market opened with a positive note and breaks through with strong momentum till the market closure. The prime index of the Dhaka Stock Exchange - DSEX crossed 4,700 points mark once again and ended at 4,749.23 points, gaining 77.66 points or 1.66 per cent.

The other two indices also posted hefty gains. The DS30 index, comprising blue chips went up by 31.30 points or 1.89 per cent to close at 1,687.01 points. The DSE Shariah Index (DSES) gained 20.39 points or 2.09 per cent to close at 993.92 points.

Supported by natural buying pressure, turnover on DSE improved to Tk 3.82 billion, registering 9.70 per cent increase over the previous session's turnover value of Tk 3.49 billion.

 "Market broke its bearish spell, as optimism resurfaced," IDLC Investments said, in its daily market analysis.

The investors observed lucrative price advantage as DSEX lost 174 points from last week. This assisted in creating a natural re-bounce, pushing up DSEX by 78 points, the merchant bank said.

 "Lucrative price to net asset value (NAV) ratio in mutual funds knocked investors' attention during the day's session. Consequently, seven mutual funds emerged in the top ten gainers list," the merchant bank added.

 "Market reclaimed 4,700 points mark proudly after a week long correction in index," said LankaBangla Securities. 

The benchmark index gained strong momentum with 1.66 per cent return supported largely by banking stocks and mutual funds, the stock broker said.

Buyers are clawing back in the market mostly keeping financial and power stocks in buying radar, the stock broker added.

 "Stocks commenced with a positive note, and continued its momentum till the end of the trading day, as the market accommodates consolidation after the recent correction phase," said Zenith Investments.