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The Influence Of Methods Of Valuation Of Stocks At The Entity Output On Performance

Author

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  • Izabela Diana HADA

    (“1 Decembrie 1918” University of Alba Iulia,Romania)

Abstract

In an economic environment in a constantly changing, performance is a priority, an assurance of some profitable economic results, a measure of profit, productivity, growth, value creation, and an indicator hardly touched. Economic entities benefit from the great opportunities to influence the outcome and, implicitly to shape their performance. These include the choice of the method of evaluating the stocks especially in putting their consumption because the entry in the inventory entity does not generate an expense which would have impact on the performance. In this sense, this article aims to analyze the implications of stock assessment methods to the entity upon performance. The research is based on the comparative analysis of the extent to which three methods of assessment of stocks respectively first in-first out, last in first out, weighted average cost may be used depending on the needs of modeling results. The research results show that the methods of stock assessment chosen by each company, governed by the law of national accounts have considerable influences upon the cost and outcome, concealing various possibilities of performance manipulation.

Suggested Citation

  • Izabela Diana HADA, 2019. "The Influence Of Methods Of Valuation Of Stocks At The Entity Output On Performance," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 4(2), pages 172-180.
    • Handle: RePEc:brc:brccej:v:4:y:2019:i:2:p:172-180
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    References listed on IDEAS

    as
    1. Assist. Mirela-Oana Pintea Ph.D Student & Lect. Monica-Violeta Achim, 2010. "Performance - An Evolving Concept," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 2(38), pages 1-12, May.
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    More about this item

    Keywords

    performance; result; FIFO; LIFO; weighted average cost;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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