If you use Excel to model businesses, business processes, or business transactions, this course will change your life. You’ll learn how to create tools for yourself that will amaze even you. Unrestricted use of this material is available in two ways.
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Impact of transactions | 8/6 Session Links |
When the company executes a transaction of any kind, the transaction potentially impacts all three financial statements. Some transactions can be very difficult to represent because they have a variety of impacts on the different financial statements. If you find yourself computing these impacts more than once, it’s best to work out a regimen for a specific type of transaction, and use it repeatedly, in a routine way. This reduces errors and makes changes easier to implement.
Last Modified: Wednesday, 27-Apr-2016 04:15:26 EDT
In the demonstration for this session, we installed a formula for depreciation that looked pretty complicated. It does save maintenance trouble, though, when the depreciation term changes for any reason. But what happens when the depreciation schedule changes in a more radical way? What if the depreciation schedule is made to be some form other than linear?
The end of this session’s demonstration gives an example of an alternative schedule, but as you can see, its formula is very different. If we’re developing a complex model with several applications of depreciation formulas, and the depreciation formulas must be changed, we would have a significant maintenance task on our hands. To avoid that kind of labor, we can define a user-defined name that contains the depreciation formula. For more about this technique, see the tip box in the narrative for this session’s demonstration.