MANAGERIAL ACCOUNTING

In sharp contrast to financial
accounting, managerial
accounting information is
intended to serve the specific
needs of management. Business
managers are charged with
business planning, controlling,
and decision making. As such,
they may desire specialized
reports, budgets, product costing
data, and other details that are
generally not reported on an
external basis. Further,
management may dictate the
parameters under which such
information is to be accumulated
and presented. For instance,
GAAP may require that certain
research costs be deducted
immediately in computing a
business's externally reported
income; on the other hand,
management may see these costs
as a long-term investment and
stipulate that internal decision
making be based upon income
numbers that exclude such
costs. This is their prerogative.
Hopefully, such internal
reporting is being done logically
and rationally, but it need not
follow any particular set of
guidelines.