Financial, Sustainability & Integrated Reporting – Core Vocabulary

Financial Accounting

External reporting system that records, summarizes and presents a company’s financial transactions for stakeholders.

Management Accounting

Internal accounting focused on cost analysis, planning and control to aid managerial decision-making.

Balance Sheet

Statement showing a firm’s assets, equity and liabilities at a specific date; always balanced (Assets = Equity + Debt).

Income Statement

Report comparing revenues and expenses over a period to determine profit or loss.

Inventory (Inventar)

Detailed list of all assets and liabilities in amount and value; basis for the balance sheet.

Stocktaking (Inventur)

Physical and documentary procedures to determine assets and debts for the inventory.

Bookkeeping

Systematic, chronological recording of all business transactions using double-entry accounts.

Double-Entry Bookkeeping

Method posting every transaction to at least two accounts with equal debit and credit amounts.

Asset Swap (Aktivtausch)

Balance-sheet change where one asset increases while another decreases, total assets unchanged.

Capital Swap (Passivtausch)

Change where one liability/equity item increases while another decreases, total capital unchanged.

Balance-Sheet Extension

Simultaneous increase of assets and capital by the same amount; also called ‘Bilanzverlängerung.’

Total Cost Method

Income-statement format comparing revenues with total production expenses plus stock changes.

Cost of Sales Method

Income-statement format matching revenues with cost of goods sold; no stock