Companies have primal, basic, elementary variables that they must comply with; without which one cannot aspire to anything. In this sense, the economic, legal, tax, accounting and financial aspects mark the starting point; later we can already think about planning, organization, direction and managerial control. The first is the first. Companies are economic units constituted by a legal person, under any form of business organization or management contemplated in current legislation, whose purpose is the commercialization of goods. These companies can make the most appropriate decisions if they have indicators provided by financial accounting.Companies can be defined as entities that, operating in an organized manner, use their knowledge and resources to buy and sell products for profit or profit.
The companies develop their activities and carry out a series of transactions such as purchases, sales, collections, payments to mention the elementary; All these transactions are considered by financial accounting and from whose treatment the financial statements that serve as the basis for decision making are obtained. In this regard, the fact of having a good administrative process is a guarantee for the timely and adequate decision-making in companies; The purpose of this process is to promote competitiveness, formalization and development itself, to increase sustainable employment, its productivity and profitability, its contribution to Gross Domestic Product, the expansion of the domestic market and exports, and its contribution to tax collection. tributary.
Decision-making can lead to the application of mechanisms to facilitate and promote access to markets: business associations, state purchases, marketing, export promotion and information on this type of company; All of which can be directed positively with an adequate direction and business management that carries out the planning of activities and resources, establishes a structural and functional organization that allows the activities of the business line; the most appropriate decisions are made by management; all elements are coordinated and resources are continuously controlled.
The first duty of the manager or administrator of companies is to create, and then lead, a whole series of relationships between his company and its workers, suppliers, banks and customers. The first step in creating the desired relationships is setting goals, discussing those goals you want to set with those who will need to achieve them. When setting these objectives it should be in such a way that the result can be approached in measurable terms. Any modification in them must have the appropriate means.
Finally, it is necessary to test them continuously since their intention at a certain moment may not be feasible to achieve it. The organization of commercial companies is usually established according to the circumstances. The owners are the main engine. Most of the things that have to be done are either done by themselves or under their direct control. This is true in the first years of the company's life. It is to be expected that a person engaged in this task will have to apply proven organizational principles to his business, when necessary due to its expansion and, in this sense, it reaches a point that exceeds the possibilities of anyone to direct it. In any case, in every company, there comes a time when the manager has to delegate the responsibility for decisions to some other managers.It is at this point that he begins to put into practice what is called organization.
LEGAL ASPECT:
According to Law 26887, General Law of Companies, those who constitute the Company agree to provide goods or services for the joint exercise of economic activities. Every society must adopt one of the forms provided for in this law. The corporation is constituted simultaneously in a single act by the founding partners or successively by offering to third parties contained in the foundation program granted by the founders. The company is constituted by at least two partners, who can be natural or legal persons. If the company loses the minimum plurality of partners and it is not reconstituted within a period of six months, it is fully dissolved at the end of that period. The company is constituted by public deed, which contains the articles of incorporation, which includes the statute.For any modification of these, the same formality is required. In the public deed of incorporation, the first administrators are appointed, in accordance with the characteristics of each corporate form. The company acquires legal personality from its registration in the Registry and maintains it until its extinction is registered.
Business name of the companies
The company has a name or company name, as appropriate to its corporate form. In the first case, you can also use an abbreviated name. A full or abbreviated name or a company name equal or similar to that of another pre-existing company may not be adopted, except when legitimacy to do so is demonstrated. This prohibition does not take social form into account. You cannot adopt a full or abbreviated name or a business name that contains names of public bodies or institutions or distinctive signs protected by industrial property rights or elements protected by copyright, unless it is proven to be legitimized to do so.
Company activities
The company limits its activities to those legal businesses or operations whose detailed description constitutes its corporate purpose. Acts related to it that contribute to the realization of its purposes are understood to be included in the corporate purpose, even though they are not expressly indicated in the articles of incorporation or bylaws. The company cannot have the objective of developing activities that the law attributes exclusively to other entities or persons. The duration of the company can be for a specific or indeterminate period.
Domicile of the companies
The domicile of the company is the place, indicated in the statute, where it carries out any of its main activities or where it installs its administration. In the event of a disagreement between the domicile of the company that appears in the Registry and the one that has actually been established, either of them may be considered. The company incorporated in Peru has its domicile in Peruvian territory, except when its corporate purpose is carried out abroad and establishes its domicile outside the country. Each partner is obliged to the company for what they have agreed to contribute to the capital. Against the delinquent partner, the company can demand compliance with the obligation through the executive process or exclude said partner through the summary process.
Contributions to the capital stock of companies
Contributions in money are disbursed in the opportunity and conditions stipulated in the articles of incorporation. The contribution that is paid when the company is constituted or when the capital is increased must be deposited, in the name of the company, in a banking or financial company of the national financial system at the time the corresponding public deed is granted. Once the public deed of incorporation has been granted and even if the registration process of the company in the Registry has not been completed, the money deposited according to the previous article can be used by the administrators, under their personal responsibility, to meet necessary expenses of the company. The delivery of real estate contributed to the company is deemed to have been made when the public deed is granted in which the contribution is recorded.The delivery of personal property contributed to the company must be completed no later than when the public deed of incorporation or capital increase is granted, as the case may be.
Obligations and assets
The social assets are responsible for the obligations of the company, without prejudice to the personal responsibility of the partners in those corporate forms that contemplate it.
Profit distribution:
The distribution of benefits to partners is made in proportion to their contributions to capital. However, the articles of incorporation or the statute may establish other proportions or different forms of distribution of benefits. All partners must assume the proportion of the losses of the company that is established in the articles of incorporation or the statute. Only members who provide only services can be exempted from this obligation. In the absence of an express agreement, losses are assumed in the same proportion as profits.
The distribution of profits can only be made on the merit of the financial statements prepared at the end of a specified period or the cut-off date in special circumstances agreed by the board of directors. The sums that are distributed cannot exceed the amount of the profits that are obtained. If a part of the capital has been lost, no profits are distributed until the capital is repaid or reduced by the corresponding amount. Both the company and its creditors may repeat for any distribution of profits made in contravention of this article, against the partners who have received them, or demand reimbursement from the administrators who have paid them. The latter are jointly and severally liable.
Company names
The public limited company can adopt any name, but it must necessarily include the indication "public limited company" or the initials "SA". In the case of companies whose activities can only be carried out, in accordance with the law, by public limited companies, the use of the indication or acronyms is optional.
The shares and capital stock of companies
In the joint-stock company, the capital is represented by registered shares and is made up of contributions from shareholders, who are not personally liable for corporate debts. The contribution of services in the public limited company is not allowed.
In order for the company to be incorporated, it must have its capital fully subscribed and each subscribed share paid for at least a quarter. The same rule applies to the capital increases that are agreed.
The capital increase of companies:
The capital increase is agreed by a general meeting, complying with the requirements established for the modification of the statute, is recorded in a public deed and is registered in the Registry. The capital increase may originate from: 1. New contributions; 2. The capitalization of credits against the company, including the conversion of obligations into shares; 3. The capitalization of profits, reserves, benefits, capital premiums, revaluation surpluses; and 4. The other cases provided by law. The capital increase determines the creation of new shares or the increase in the nominal value of existing ones.
The general meeting may delegate to the board of directors the power to: 1. Indicate the opportunity in which a capital increase agreed by the general meeting should be carried out. The agreement must establish the terms and conditions of the increase that can be determined by the board of directors; and, 2. Agree on one or more capital increases up to a certain amount through new contributions or capitalization of credits against the company, within a maximum period of five years, in the opportunities, the amounts, conditions, according to the procedure that the board of directors decides, without prior consultation with the general meeting. The authorization may not exceed the amount of the paid share capital in effect at the time the delegation has been agreed.
The reduction of the capital of companies:
The capital reduction is agreed by a general meeting, fulfilling the requirements established for the modification of the statute, is recorded in a public deed and is registered in the Registry. The capital reduction determines the amortization of issued shares or the decrease in their nominal value. It is carried out by: 1. The delivery to its holders of the amortized nominal value; 2. The delivery to its holders of the amount corresponding to their participation in the equity of the company; 3. The forgiveness of passive dividends; 4. The reestablishment of the balance between the capital stock and the net worth diminished as a consequence of losses; u, 5. Other means specifically established when agreeing to reduce capital.
The capital reduction agreement must state the amount by which the capital is reduced, how it is done, the resources with which it is made and the procedure by which it is carried out.
The memory and the directory of the companies:
At the end of the fiscal year, the board of directors must formulate the report, the financial statements and the proposal for the application of profits, if any. From these documents, the economic and financial situation of the company, the state of its business and the results obtained in the past year must be clearly and precisely stated. The financial statements must be made available to the shareholders with the necessary advance notice to be submitted, in accordance with the law, to the consideration of the annual mandatory meeting.
In the report, the board of directors reports to the general meeting on the progress and status of the businesses, the projects developed and the main events that occurred during the year, as well as the situation of the company and the results obtained. The report must contain at least: 1. An indication of the significant investments made during the year; 2. The existence of significant contingencies; 3. The important events that occurred after the close of the fiscal year; 4. Any other relevant information that the general meeting must know; and, 5. The other reports and requirements established by law.
Financial statements and international financial reporting standards:
The financial statements are prepared and presented in accordance with the legal provisions on the matter and with accounting principles generally accepted in the country. As of the day following the publication of the call to the general meeting, any shareholder may obtain at the company's offices, free of charge, copies of the documents referred to in the previous articles. The approval by the general meeting of the documents mentioned in the previous articles does not matter the discharge of the responsibilities that the directors or managers of the company may have incurred.
TAX ASPECT
In the case of commercial companies, merchandise is movable property that is generally taxed.
The Tax Code establishes the general principles, institutions, procedures and rules of the tax-legal system. The Tax Code governs the legal relationships originated by taxes. For these purposes, the generic term tribute includes:
- Tax: It is the tribute whose fulfillment does not originate a direct consideration in favor of the taxpayer by the State. Contribution: It is the tribute whose obligation has as a generating event benefits derived from the performance of public works or state activities. Rate: It is the tax whose obligation is the effective provision by the State of a public service individualized to the taxpayer. The payment received for a service of contractual origin is not a fee. The rates, among others, can be:
1 - Excise duties: these are fees that are paid for the provision or maintenance of a public service.
2 - Rights: these are fees that are paid for the provision of a public administrative service or the use or exploitation of public goods.
3 - Licenses: these are rates that are levied on obtaining specific authorizations to carry out activities of private benefit subject to control or supervision.
GENERAL SALES TAX
In accordance with the General Sales Tax Law; In Peru, the General Sales Tax levies, among other operations: The sale of movable property in the country. The goods of the company are movable property; therefore taxed with the general sales tax; but said tax is not part of the cost of the inventory of the merchandise; because the company has the right as a tax credit against the tax debit that corresponds to the sales.
For the purposes of applying the Tax, it is understood as:
- SALE:
- Any act by which assets are transferred for consideration, regardless of the designation given to the contracts or negotiations that originate such transfer and the conditions agreed by the parties. The removal of assets by the owner, partner or holder of the company or the company itself, including those made as a discount or bonus, with the exception of those indicated by this Law and its Regulations, such as the following: - The withdrawal of inputs, raw materials and intermediate goods used in the preparation of the goods that the company produces. - The delivery of goods to a third party to be used in the manufacture of other goods that the company has commissioned. - The withdrawal of assets by the builder to be incorporated into the construction of a property.- The removal of goods as a consequence of the disappearance, destruction or loss of goods, duly accredited in accordance with the Regulations. - The withdrawal of goods to be consumed by the company itself, whenever necessary to carry out the taxed operations. - Non-consumable goods, used by the company itself, as long as it is necessary for carrying out the taxed operations and that said goods are not withdrawn in favor of third parties. - The withdrawal of goods to be delivered to the workers as a working condition, provided that they are essential for the worker to provide their services, or when such delivery is provided by law. - The withdrawal of goods resulting from the transfer by subrogation to the insurance companies of the damaged goods that have been recovered.
- MOVABLE PROPERTY: Corporal goods that can be taken from one place to another, the rights relating to them, distinctive signs, inventions, copyrights, key rights and the like, ships and aircraft, as well as documents and titles whose transfer implies that of any of the aforementioned goods. SERVICES:
- Any benefit that one person performs for another and for which he or she receives a remuneration or income that is considered third category income for the purposes of Income Tax, even when it is not subject to the latter tax; including leasing of movable and immovable property and financial leasing. It is understood that the service is provided in the country when the subject that provides it is domiciled in it for the purposes of Income Tax, regardless of the place of conclusion of the contract or payment of the remuneration. The service is used in the country when, being provided by a non-domiciled subject, it is consumed or used in the national territory, regardless of the place where the consideration is paid or received and the place where the contract is signed.The free delivery that does not imply transfer of ownership, of goods that make up the fixed assets of a company linked to another economically, except in the cases indicated in the Regulation. For the purpose of establishing the economic link. In the case of the international passenger transport service, the General Sales Tax is applied on the sale of tickets that are issued in the country or on those documents that increase or decrease the sale value of the tickets provided that the service is starts or ends in the country, as well as those that are acquired abroad to be used from the country.In the case of the international passenger transport service, the General Sales Tax is applied on the sale of tickets that are issued in the country or on those documents that increase or decrease the sale value of the tickets provided that the service is starts or ends in the country, as well as those that are acquired abroad to be used from the country.In the case of the international passenger transport service, the General Sales Tax is applied on the sale of tickets that are issued in the country or on those documents that increase or decrease the sale value of the tickets provided that the service is starts or ends in the country, as well as those that are acquired abroad to be used from the country.
The tax obligation in the General Sales Tax originates:
- In the sale of goods, on the date the payment voucher is issued in accordance with what is established in the regulations or on the date the good is delivered, whichever occurs first. In the case of ships and aircraft, on the date the corresponding contract is signed. In the case of the sale of distinctive signs, inventions, copyrights, key rights and the like, on the payment date or dates indicated in the contract and for the amounts established; on the date the income is received, for the amount received, be it total or partial; or when the payment voucher is issued according to what is established in the Regulation ,whichever occurs first.In the withdrawal of goods, on the date of the withdrawal or on the date on which the payment receipt is issued in accordance with the provisions of the Regulation, whichever occurs first.In the provision of services, in the date on which the payment voucher is issued according to what is established in the Regulations, or on the date on which the remuneration is received, whichever occurs first. In the cases of supply of electricity, drinking water, and final telephone, telex and telegraphic services, on the date of receipt of the income or on the expiration date of the term for payment of the service, whichever occurs first.
INCOME TAX
According to the Income Tax Law of Peru; Income Tax is levied on: a) Income that comes from capital, work and the joint application of both factors, understood as those that come from a durable source capable of generating periodic income; b) Capital gains; c) Other income that comes from third parties, established by this Law; d) The imputed income, including the enjoyment or enjoyment, established by this Law.
The following are included within the income provided for in subsection a): 1) Royalties; 2) The results of the sale of: (i) Rustic or urban land by the urbanization or subdivision system; (ii) Properties, included or not under the horizontal property regime, when they have been acquired or built, totally or partially, for the purposes of the sale; 3) The results of the sale, exchange or habitual disposition of goods.
In accordance with Article 62 of the Income Tax Law: Taxpayers, companies or companies that, due to the activity they develop, must carry out an inventory, will value their inventories at their acquisition or production cost, adopting any of the following methods, provided they are applied uniformly from exercise to exercise:
- First In, First Out (FIFO); Daily, Monthly or Annual Average (WEIGHTED OR MOVING); Specific Identification; Retail or Retail Inventory; Basic Stock.
The regulation of the Law establishes for taxpayers, companies or societies, depending on their annual income or by the nature of their activities, special obligations related to the way they must keep their inventories and record their costs.
According to Article 35 of the Regulations of the Income Tax Law in relation to inventories and cost accounting: Tax debtors must keep their inventories and record their costs according to the following rules:
-
- When their annual gross income during the preceding fiscal year has been greater than one thousand five hundred (1,500) Tax Units of the current fiscal year, they must keep a cost accounting system, the information of which must be recorded in the following records: Cost Registry, Registry of Permanent Inventory in Physical Units and Registry of Valuated Permanent Inventory When your gross annual income during the preceding year has been greater than or equal to five hundred (500) Tax Tax Units and less than or equal to one thousand five hundred (1,500) Tax Tax Units for the year ongoing, they should only keep a Permanent Inventory Record in Physical Units.When their gross annual income during the preceding fiscal year has been less than five hundred (500) Tax Units for the current fiscal year, they should only carry out physical inventories of their inventories at the end of the fiscal year. and b), additionally they must carry out, at least, a physical inventory of their stocks in each fiscal year.
They must record in a Cost Register, in separate accounts, the constituent elements of the cost of production for each stage of the production process. These elements are included in the corresponding International Accounting Standard, such as: direct materials, direct labor and indirect production expenses.
- Those who must keep a cost accounting system based on permanent inventory records in physical or valued units or those who, without being obliged, choose to carry it regularly, may deduct losses due to lack of inventory, at any date within the fiscal year, provided that the Physical inventories and their valuation have been approved by those responsible for their execution and also comply with the provisions of the second paragraph of subsection c) of Article 21 of the Regulation.The method of valuation of inventories may not be changed without authorization from SUNAT and it will effects as of the year following the one in which approval is granted, after making the adjustments that said entity determines. SUNAT by means of a Superintendency Resolution may:
- Establish the requirements, characteristics, content, form and conditions in which the records established in this Article must be kept. Exclude the tax debtors included in subsection a) of this Article, from keeping the Permanent Inventory Registry in Physical Units. the procedures to be followed for the execution of taking physical inventories in harmony with the accounting standards referred to such procedures.
In all cases in which tax debtors carry out physical inventories of their inventories, the results of said inventories must be endorsed by the accountant or person responsible for their execution and approved by the legal representative. In order to show the real cost, the tax debtors must prove, through the records established in this Article, the units produced during the fiscal year, as well as the unit cost of the items that appear in the final inventories. During the taxable year, tax debtors may have a Standard Cost System that adapts to their business, but when formulating any balance for tax purposes, they must necessarily value their inventories at real cost.Tax debtors must provide the report and the necessary technical studies that support the application of the aforementioned system, when required by SUNAT.
According to Article 64 of the Income Tax Law: For the purposes of this law, the value that the importer assigns to imported goods and products may not be greater than the ex-factory price in the place of origin plus the expenses to the Peruvian port, in the manner established by the regulations, taking into account the nature of the imported goods and the modality of the operation. If the importer assigns a higher value to the goods and products, the difference will be considered, unless proven otherwise, as taxable income of the importer. Likewise, for the purposes of this law, the value assigned to the goods or products that are exported may not be less than their real value, understood as the current value in the consumer market less expenses, in the manner established by the regulation,taking into account the exported products and the modality of the operation. If the exporter assigns a lower value than indicated, the difference, unless proven otherwise, will be treated as taxable income of the exporter.
According to Article 37 of the Regulations of the Income Tax Law regarding import and export: In order to determine the value of imports and exports referred to in Article 64 of the Law, the following will be taken into account provisions:
a- The value of imported goods will be made up of the ex-factory price plus expenses, duties and taxes in the country of origin, freight, insurance, exchange differences, duties and other import taxes, customs clearance costs, and other expenses incurred until the goods enter the company warehouses.
b - The sale value of the exported goods will be determined as follows:
- CIF value, for the current value in the consumer market, less the duties and other taxes imposed on the admission of said goods in the destination country, as well as the Customs clearance expenses and other expenses incurred until the goods are entered. to the recipient's warehouses; y FOB Value, for the current value in the consumer market, minus all the items referred to in the previous paragraph, as well as freight and insurance.
By the current value in the consumer market, it is understood the wholesale price that governs in said market. In the event that the aforementioned price is not public and notorious knowledge, or that its application on goods of the same or similar nature could generate doubt, the prices obtained by other companies in the placement of goods of the same or similar nature will be taken in the same market and within the taxable year.
In accordance with Article 20 of the Income Tax Law: The gross income is made up of the set of income subject to the tax obtained in the taxable year. When such income comes from the sale of assets, the gross income will be given by the difference between the total net income from such operations and the computable cost of the assets sold. In the case of depreciable or amortizable assets, for the purposes of determining the tax, the computable cost will be reduced by the amount of depreciation or amortization that should have been applied in accordance with the provisions of the I. Income Law. The total net income resulting from the sale of assets will be established by deducting returns, bonuses,discounts and similar concepts that respond to the customs of the square.
By computable cost of the disposed assets, it will be understood the cost of acquisition, production or construction, or, where appropriate, the value of income to equity or value in the last inventory determined according to Law, adjusted according to the adjustment rules for inflation with tax incidence, as appropriate. Be understood by:
- Acquisition cost: the consideration paid for the good acquired, increased in the improvements incorporated on a permanent basis and the expenses incurred as a result of its purchase such as: freight, insurance, dispatch expenses, customs duties, installation, assembly, normal commissions, including those paid by the transferor due to the acquisition or transfer of goods, notarial expenses, taxes and duties paid by the transferor and other expenses that are necessary to place the assets in a condition to be used, transferred or economically exploited. In no case will interest be part of the acquisition cost Value of income to equity: the value that corresponds to the market value in accordance with the provisions of this Law, except as provided in the following article.
In accordance with Article 31 of the Single Ordered Text of the Income Tax Law: Merchandise or other assets that the owner or owners of companies withdraw for their personal or family use or for activities that do not generate achieved results. for the Tax, they will be considered transferred at their market value. The same treatment will be dispensed to the operations that the companies carry out on behalf of their partners or in favor of them.
In accordance with Article 32 of the Single Ordered Text of the Income Tax Law: In cases of sales, contributions of goods and other transfers of property, provision of services and any other type of transaction of any title, the value assigned to goods, services and other benefits, for tax purposes, will be the market. If the assigned value differs from the market value, be it due to overvaluation or undervaluation, the National Superintendency of Tax Administration - SUNAT will adjust it for both the acquirer and the transferor.
ACCOUNTING ASPECT
The accounting is recorded using a special tool called the General Business Accounting Plan (PCGE), this document has the following objectives:
1) The accumulation of information on the economic facts that a company must register according to the activities it carries out, in accordance with a code structure that complies with the official accounting model in Peru, which is the one that corresponds to the International Information Standards Financial - IFRS1.
2) Provide companies with accounting codes to record their transactions, which allow them to have an adequate degree of analysis; and based on this, obtain financial statements that reflect its financial situation, results of operations and cash flows;
3) Provide supervisory and control bodies with standardized information on the transactions that companies carry out.
It is a requirement for the application of the PCGE, to observe what the IFRS establishes. Additionally, and without jeopardizing the application of the provisions of IFRS, the rules of law, jurisprudence and commercial customs and practices must be considered.
In general, the following should be considered:
- The accounting of the companies must be sufficiently detailed to allow the accounting recognition of economic facts, in accordance with the provisions of this PCGE, and thus facilitate the preparation of complete financial statements, and other financial information; Operations must be recorded in the accounts that correspond to their nature; Companies must establish in their accounting plans up to five digits, those that have been established for the registration of information according to this PCGE In some cases, and for reasons of handling the detail of information, the Companies can incorporate additional digits, as necessary, maintaining the basic structure provided by this PCGE. Such additional digits may be necessary to recognize the use of different currencies;operations in different lines of business or geographic areas; more detailed information, among others; If companies develop more than one economic activity, the subaccounts and divisions that are necessary for the separate registration of the operations corresponding to each economic activity must be established; Companies can use the codes to level of two digits (accounts) and three digits (subaccounts) that have not been established in this PCGE, provided that they request the corresponding authorization from the National Directorate of Public Accounting, in order to achieve a homogeneous use.The subaccounts and divisions that are necessary for the separate registration of the operations corresponding to each economic activity must be established; Companies can use the two-digit (accounts) and three-digit (subaccounts) level codes that have not been set. in this PCGE, provided that they request the corresponding authorization from the National Directorate of Public Accounting, in order to achieve a homogeneous use.The subaccounts and divisions that are necessary for the separate registration of the operations corresponding to each economic activity must be established; Companies can use the two-digit (accounts) and three-digit (subaccounts) level codes that have not been set. in this PCGE, provided that they request the corresponding authorization from the National Directorate of Public Accounting, in order to achieve a homogeneous use.
The accounting systems and records of the companies
Accounting records all business transactions, asset operations, liabilities, income and expenses; such transactions are recognized, measured, noted and presented in special reports. Accounting reflects the investment and financing of companies through the double entry technique. This refers to the fact that each transaction is reflected in at least two accounts or accounting codes, one or more debit and other credit (s). The total of the debit values must be equal to the total of the credit values, thus maintaining a balance in the accounting record.
The accounting record is not subject to the existence of a formal document. In cases where the essence of the operation has been carried out as indicated in the Conceptual Framework for the Preparation and Presentation of IFRS Financial Statements, the corresponding accounting record must be made, even if there is no supporting evidence.
In all cases, the accounting record must be supported by sufficient documentation, many times provided by third parties, and on other occasions generated internally. The transactions carried out by the companies are recorded in the books and accounting records that are necessary, without prejudice to compliance with other provisions of the law.
The books, records, documents and other evidences of the accounting record will be kept for the time that is necessary for the control and follow-up of the transactions, without prejudice to what other provisions of the law prescribe.
Update procedure and validity
The accounting accounts are affected by the intensive process of reviewing current accounting standards, and by the development of new forms and types of business, or on aspects not discussed so far, which will foreseeably lead to other modifications to IFRS, or the incorporation of new IFRS. Consequently, updating the PCGE must become a continuous process. The National Directorate of Public Accounting, in use of its powers, will dictate the procedures it deems necessary for the permanent update of the General Business Accounting Plan, through additional regulations and the issuance of opinions on aspects that require some regulation, after consulting the Council Accounting Regulations.Within this procedure, periodic monitoring with professional bodies and accounting professionals is contemplated.
Fundamentals of accounting
A chart or chart of accounts is a necessary tool for processing accounting information. This accounting information responds to the application of accounting standards for the treatment of the financial effects of the events and economic estimates that the companies make, regulations that are not replaced in any of its extremes, by the issuance of this PCGE. However, for the full understanding of the latter, various concepts of the aforementioned regulations are reproduced, which includes, without limitation, the International Financial Reporting Standards - IFRS.
The concepts mentioned below have been taken from the edition of IFRS published by the International Accounting Standards Board: 1) Theoretical Basis in force internationally. In all cases, the prescriptions of IFRS prevail over the provisions contained in this PCGE. This PCGE is consistent and is homogenized with the IFRS official by the Accounting Regulatory Council (CNC). In cases where there are no specific regulations on certain issues, such as trusts, employee participation in their deferred portions, and others, the corresponding part of the PCGE has been developed based on international experience. In addition, it takes into consideration the accounting standards of international force (see Annex II, at the end of this PCGE);2) International Accounting Standards Board (IASB). Body responsible for establishing accounting standards at the international level, starting in 2003. This work was in charge of the International Accounting Standards Committee (IASC); 3) IFRS and IAS have been made official with various resolutions issued by the CNC.
International financial reporting standards (IFRS):
The standards establish the requirements for recognition, measurement, presentation and information to be disclosed, regarding facts and estimates of an economic nature, which are presented in a summarized and structured manner in the general purpose financial statements. IFRS are built taking into account the Conceptual Framework, which aims to facilitate the coherent and logical formulation of IFRS, based on a single theoretical structure, to resolve accounting treatment issues. IFRS are designed to be applied to all for-profit entities. However, nonprofits may find them appropriate. In this regard, the International Public Sector Accounting Standards Board (JNICSP for its acronym in Spanish),of the International Federation of Accountants (IFAC)
According to the Conceptual Framework, the responsibility for the preparation and presentation of financial statements rests with the company's management. Consequently, the adoption of accounting policies that allow a reasonable presentation of the financial situation, management results and cash flows is also part of this responsibility. In Peru, the General Law of Companies attributes to the manager, responsibility for the existence, regularity and veracity of the accounting systems, the books that the law orders to keep, and the other books and records that an orderly merchant must keep. For its part, the Board of Directors, in accordance with the General Law of Companies, must prepare the financial statements at the end of the year.
Two fundamental hypotheses guide the development, adoption and application of accounting policies: By accrual, the effects of transactions and other events are recognized when they occur (not when money or other cash equivalents are received or paid). Likewise, they are recorded in the accounting books and they are reported in the financial statements of the periods to which they relate. Thus, users are informed not only of past transactions that involve the collection or payment of money, but also of the payment obligations in the future and the rights that represent cash to be collected in the future. The financial statements are prepared on the basis that the entity is in operation and that it will continue its operating activities for the foreseeable future (estimated at least twelve months in the future).
Qualitative characteristics of the financial statements
The financial statements of companies are the end product of financial accounting; These documents are special, official, formal and therefore have certain qualitative characteristics, which are the following:
- Comprehension: The information in the financial statements must be easily understandable by users with reasonable knowledge of economic activities and the business world, as well as their accounting, and with a willingness to study the information with reasonable diligence. However, information on complex topics must be included for reasons of relevance, even though it is difficult for certain users to understand. Relevance (relative importance or materiality):The relevance of the information is affected by its nature and relative importance; In some cases, nature alone (presentation of a new segment, conclusion of a future contract, change of cost formula, among others) can determine the relevance of the information. Information is material when, if it is omitted or presented in an erroneous way, it can influence the economic decisions of users (evaluation of past, current or future events) taken from the financial statements. Reliability:The information must be free from material errors, biases or prejudices (it must be neutral) in order to be useful, and users can trust it. Furthermore, for the information to be reliable, it must accurately represent the transactions and other events that are intended; be presented according to its essence and economic reality, and not only according to its legal form. Likewise, it must be taken into account that in the preparation of financial information a series of situations arise subject to uncertainty, which require judgments that must be made exercising prudence. This implies that assets and income as well as obligations and expenses are not overvalued or undervalued. In order for the information in the financial statements to be considered reliable, it must be complete. Comparability:The information must be presented in a comparative way, in a way that allows users to observe the evolution of the company, the trend of its business, and, even, it can be compared with information from other companies. The comparability is also based on the uniform application of accounting policies in the preparation and presentation of financial information. This does not mean that companies should not modify accounting policies, as long as there are other more relevant and reliable ones. Users of financial information must be informed of the accounting policies used in the preparation of financial statements, of any changes in them, and of the effects of said changes. Relevant and reliable information is subject to the following restrictions: Opportunity:In order for financial information to be useful, it must be made known to users in a timely manner, so that it does not lose its relevance. This, without losing sight of the fact that in certain cases a fact is not fully known or a transaction has not been concluded; in these cases a balance must be struck between relevance and reliability. Balance between cost and benefit: It refers to a restriction rather than a qualitative characteristic. While it is true that the evaluation of benefits and costs is a process of value judgments, it must focus on the fact that the benefits derived from the information must exceed the costs of providing it. Balance between qualitative characteristics:Without losing sight of the objective of financial statements, it is proposed to achieve a balance between the qualitative characteristics mentioned. Fair presentation. The application of the main qualitative characteristics and the appropriate accounting standards should result in reasonably presented financial statements.
Elements of financial statements
Financial statements reflect the effects of transactions and other events of a company, grouping them by categories, according to their economic characteristics, which are called elements. In the case of the balance sheet, the elements that measure the financial situation are: assets, liabilities and equity. In the income statement, the items are income and expenses. The Conceptual Framework does not identify any unique element of the statement of changes in equity or the statement of cash flows, which rather combines elements of the balance sheet and the statement of profit and loss. For the purposes of developing the PCGE, these elements are considered for the initial classification of the accounting codes. The essential characteristics of each item are discussed below.
- Asset: resource controlled by the entity as a result of past events, from which the company expects to obtain economic benefits. Liability: present obligation of the company, arising from past events, at which maturity, and to pay it, the entity expects to dispose of resources that incorporate economic benefits. Net worth: residual part of the assets of the company after deducting the liabilities. Income: these are increases in economic benefits, produced during the accounting period, in the form of inflows or increases in the value of assets, or as decreases in obligations that result in increases in equity, and are not related to contributions from the owners to this patrimony.Expenses: decreases in economic benefits, produced in the accounting period, in the form of outflows or decreases in the value of assets, or originated in an obligation or increase in liabilities, which result in decreases in equity, and not they are related to the distributions made to the owners of that patrimony.
Recognition and measurement of the elements of financial statements
Any item that meets the definition of an item should be recognized provided that: it is probable that any economic benefit associated with the item will flow to or leave the business; and, the item has a cost or value that can be reliably measured; This applies to the assets, liabilities, income and expenses of companies. On the other hand, the measurement bases, or determination of the monetary amounts in which the elements of the financial statements are recognized take into account the following aspects:
- Historical cost: the asset is recorded at the amount of cash and other items that represent obligations, or at the fair value of the consideration given in exchange at the time of acquisition; the liability, for the value of the product received in exchange for incurring a debt, or, in other circumstances, for the amount of cash and other equivalent items expected to be paid to satisfy the corresponding debt, in the normal course of the operation. Running cost:the asset is carried in the accounting for the amount of cash and other cash equivalent items, which would have to be paid if the same asset or an equivalent is currently acquired; the liability, for the amount, without discounting, of cash or other cash-equivalent items, that would be required to settle the liability at the present time. Realizable value: the asset is accounted for by the amount of cash and other cash equivalent items that could be obtained, at the present time, by the unforced sale of the asset. The liability is carried by its settlement values, that is, by the amounts, without discounting, of cash or other cash equivalents, which are expected to be used in the payment of debts. Present value:the asset is accounted for at present value, discounting the net cash inflows that the item is expected to generate in the normal course of the operation. The liability is accounted for at present value, discounting the net cash outflows that are expected to be needed to pay such debts, in the normal course of operations. Fair value:This form of measurement is cited in a number of accounting standards. Fair value is the price for which an asset can be acquired or a liability paid, between interested parties, duly informed, in a transaction under conditions of free competition. Fair value is preferably calculated by reference to a reliable market value; the listing price in an active market is the best fair value reference, meaning an active market is one that meets the following conditions: - the goods exchanged are homogeneous; - buyers and sellers are permanently present; and, - the prices are known and easily accessible to the public. In addition, these prices reflect actual, current, and regularly occurring market transactions. In other cases,In the absence of a reference market to measure fair value, other forms of measurement based on discounted values of associated future cash flows are accepted.
ACCOUNTING AND FINANCIAL CONCEPTS
Available assets: Includes cash and bank funds that do not have restrictions on their use, as well as those investments that were acquired in order to convert them into cash in the short term or, those that despite having been acquired to be held at maturity or to have a degree of ownership in the long term, they have been destined for sale.
Financial assets - purchase commitment: Refers to financial assets that an entity acquires and whose transfer and cash flows will take place in the future, when they are recognized on the contract date.
Fixed assets: Capital assets that are expected to be held for a period greater than one financial year, intended to be used in the main activities of the entity, or in activities that support or complement those main activities. This Element includes Financial Investments (to be held until maturity and financial instruments representing patrimonial law) whose maturity, disposal or realization is expected to occur in a period of more than one year, to Real Estate assets, machinery and equipment, acquired directly or through financial leasing operations; to real estate investments; to biological assets; and other long-term assets.
Assets for derivative financial instruments: Those that grant at the beginning of the contract the right to exchange financial assets or liabilities under potentially favorable conditions for the company. As the market evolves, such conditions can effectively become business-friendly.
Realizable assets: Includes the assets of the company that are expected to be converted into cash or its equivalents in the normal course of operations. Includes inventories and non-current assets available for sale.
Value update: It is any change in value, which increases or decreases, the value of an asset or a liability, by reference to an external value, for example the market. A value update does not involve exchange, although sometimes it can be established under that assumption (see also the definition of fair value). Rather, a value update results from the holding (possession) of assets and claims.
Joint Venture / Joint Venture: It is a contractual agreement whereby two or more parties undertake an economic activity that is subject to joint control.
Punishment: Elimination or withdrawal from the accounting of an amount previously recognized as an asset. An example can be cited as an account receivable for which the means of collection were exhausted and that was previously recorded in a valuation account (doubtful collection estimate). In that case, both the account receivable and the valuation account are eliminated.
Compensation of accounts: For the purpose of its presentation in the financial statements, it is the accumulation of debit and credit balances, that is, its presentation in a netted or netted manner.
Goodwill (Goodwill): Payment in excess of the fair value of assets less liabilities acquired in a business combination, made by the acquirer, and that represents an expectation of future economic benefit.
Memorandum account: Accounts that are used for the accounting control of commitments and contingencies that do not affect the financial situation, results and cash flows until the balance sheet date they represent, but that could later do so. It is divided into debit memorandum accounts (contingencies) and creditor memorandum accounts (commitments).
Body of the financial statements: It is, for purposes of presenting financial information, the exposure of any item directly in the financial statements.
Waste: Irrecoverable loss of quality of stocks, which makes them unusable for the purposes for which they were intended.
Impairment of assets: It is the loss of value of assets, which must be recognized in the financial statements, while, in general, the expected inflows of economic benefits, associated with these assets, are less than the values that are carried forward in books. The methods for their recognition differ, depending on whether they are available, realizable or fixed assets.
Accrued: Fundamental Hypothesis of Accounting. On this basis, the effects of transactions and other events are recognized when they occur (and not when money or other cash equivalents are received or paid), and are reported on in the financial statements. Financial statements prepared on an accrual basis inform users not only about past transactions that involve income or outflows of cash flows, but also about future obligations and resources that represent flows of cash income to be received in the future.
Temporary differences: These are the differences that exist between the book value of an asset or liability and their tax base. Temporary differences can be taxable (taxable) or deductible.
Company, entity or economic entity: This term refers both to the accounting subject, as to any legal person, and to other business forms as well as to the managed assets; which carry out an organized economic activity for the production, transformation, circulation, administration or custody of goods, for the provision of services and others.
Related entity: Term used to refer to an entity with which there is a link of control (subsidiary), significant influence (associate), representation (branch), or joint control over another entity (joint ventures).
Deliveries to be rendered: Money given to managers, officials and employees, mainly to cover expenses on behalf of the company, such as travel, accommodation, among others, in accordance with the policy implemented by the company. By their nature, these deliveries are recorded in Accounts receivable from staff, shareholders and directors. In certain circumstances, companies also deliver funds to be rendered to third parties, in which case they will be recorded in Sundry Accounts Receivable - Third Parties.
Qualified Stock: Are those stocks that necessarily require a significant period of time to be ready for sale.
Measurement date : Date on which the value of exchanged goods or services is determined, and obligations assumed; or, the date on which the value of an asset or liability is estimated.
Fixed funds: Cash on a fixed or determined amount, also called Petty Cash. The disbursements for which they have been destined are settled periodically, in such a way that the funds are maintained over time. The company determines the form, currency and limits for its use.
Financial institution: Includes banks; financial; municipal boxes; rural savings and credit banks; small and micro enterprise development companies (EDPYME); and any other entity that carries out activities similar to those mentioned.
Financial instrument: It is a contract that gives rise to both a financial asset in a company and, simultaneously, a financial liability or capital instrument in another company, among which accounts receivable, accounts payable, shares, bonds are considered. and derivatives (options, futures, forwards, among others).
Financial instruments - cash flow hedging: They refer to financial instruments that are used to reduce or extinguish the effect of exposure (hedge or hedge) to the variation in cash flows.
This exposure can be attributed to a particular risk associated with a recognized asset or liability (as in the case of future interest payments on a debt at variable rates) and that can affect the results of the period.
Equity or equity or capital instrument: it is a residual participation in the assets of the company, after the deduction of its liabilities.
Research: Refers to original and planned studies that are undertaken with the aim of obtaining new scientific or technological knowledge.
Accounting books: These are the records that systematically accumulate information on the elements of the financial statements, from which the quantitative financial information that is exposed in the body of the financial statements or in notes to them flows. Said accounting books include at least one daily transaction record (journal) and a balance accumulation record (ledger) .
Consignment merchandise: that which is sent to sellers or distributors for subsequent sale. As long as the control of the asset and the risks and benefits inherent to the asset have not been transferred, it will remain as an asset of the consignor.
Loss : deterioration or loss of a product produced by foreseen or unforeseen causes in an industrial process or by causes inherent to its nature.
Contract (negotiation) date method: In a transaction for the purchase or sale of financial assets, the recognition of the asset to be received and the liability to be paid, as well as the derecognition of the asset being sold, the recognition of the item Receivable related to the operation and the result of the sale or disposition by other means, will be made on the date of contracting (negotiation).
Settlement date method: In a transaction for the purchase or sale of financial assets, the recognition of the asset received, as well as the derecognition of the asset sold and the recognition of the result of the sale or disposal by other means, will be made in the settlement date.
Discontinued operations (discontinued activities): It is a component of the company (comprising operations and cash flows that can be distinguished from the rest of the same) that has been sold or disposed of in another way, or has been classified as held for sale.
Participation in revaluation surplus. It refers to the recognition by accumulation of the net effect of increases and decreases in the measurement at equity participation value, of investments in the equity of entities under control (subsidiaries) or significant influence (associates), when said equity participation is based on variations equity due to updating the value of the entity where it was invested.
Item: Term used to refer to an account, subaccount or division, or transactions contained therein.
Liabilities for derivative financial instruments: Those that grant, at the beginning of the contract, the obligation to exchange financial assets or financial liabilities under potentially unfavorable conditions for the company. As market performance takes place, these conditions can effectively become unfavorable for the company.
Accounting policies: They cover the principles, foundations, bases, agreements, rules and procedures adopted by a company in the preparation and presentation of its financial statements.
Presentation of financial statements: Exposure of quantitative or qualitative information, either in the body of the financial statements, or in the explanatory notes.
Goods or Real Estate Products: These are real estate acquired or built by the entity for its commercialization.
Reclassification: For purposes of the presentation of financial statements and notes, includes the accumulation of financial information, in an item other than the one that contains the account or sub-accounts in which the transaction or the balance of similar transactions is recognized in accounting books. Thus, for example, advances to suppliers are recognized in a liability account (with credit balance), but are presented according to the purpose of the advance. Therefore, if the advance corresponds to inventory purchases, its proper presentation, after reclassification, is that of inventory to be received.
Natural resources: Resources that are extracted from nature and are treated as stocks; among them we have minerals, oil, gas, fish, wood.
Reversal of temporary differences: Corresponds to the decrease in temporary differences between accounting and tax bases, which have as a consequence, the reversal of deferred tax assets and liabilities recognized in previous periods. Reversals produce effects contrary to those previously recognized. Thus, for example, if a taxable temporary difference gave rise to the recognition of an accounting expense for income tax and a tax liability for the same amount, in previous periods, its reversal will give rise to the recognition of income (savings) for income tax. income, and consequently, a lower liability, in the current period.
Item: It is a separate presentation line in the body of the financial statements.
Operating segments: Identifiable components of a company where each one of them produces a different type of product or service, or a different group of related products or services, for which it is exposed to risks and returns different from those of other segments of the company.
Geographical segments: Identifiable components of a company involved in operations in a country or in a group of countries within a particular geographic area, as determined by the company according to specific circumstances. They are exposed to risks and returns different from those of other segments that carry out their activities in different geographical areas.
Share-based payment transactions: Those in which the company receives goods or services in exchange for its own equity instruments, or acquires goods and services incurring obligations whose amounts are based on the price of its shares or other equity instruments of its own..
Transactions between related parties: Transfer of resources, services or obligations between related companies, regardless of whether or not a price associated with the object of that transfer is considered.
Account transfer (or between accounts): accounting record within the same account, through subaccounts (three-digit level) or any greater disaggregation. For example, in the case of exchange of bills with invoices, within Accounts receivable.
Fair value: It is the value at which a good or service can be exchanged at the date of the financial statements, between two or more economic agents, buyer (s) and seller (s), aware of the object of the exchange, in a transaction of free competition. The usual way to determine fair value is by reference to a comparable market measurement. However, in some cases, other methods provide a measure of fair value, as is the case of property, plant and equipment appraisals, for the purpose of determining their revalued value.
Recoverable value (amount): It is the higher value between the net sale price of an asset (or a cash-generating unit) and its value in use.
CONCEPTS RELATED TO FINANCIAL INDICATORS
Analysis of expenses versus sales: Analysis of the relationship between marketing expenses and sales to keep those at the proper level.
Portfolio analysis: Instrument by which management identifies and evaluates the different businesses that make up the company.
Value Analysis: A cost reduction approach in which components are carefully analyzed to determine whether they can be redesigned, standardized, or manufactured using cheaper production methods.
Financial analysis: Analysis of the projection of sales, costs and profits of a new product to determine if these factors meet the objectives of the company.
Investor Angel: It is a natural person willing to invest in ventures in the early stages of their development.
Capital goods : Industrial goods that are a part of the finished product, including installations and accessory equipment.
Purchase goods : Consumer goods that the consumer, in the selection and purchase process, compares on the basis of quality, price and model.
Specialty goods : Consumer goods with unique characteristics or brand identification for which a significant group of buyers is willing to make a special effort.
Common Use Goods : Consumer goods that are typically purchased frequently and immediately, and with minimal purchasing and comparison effort.
Durable goods: Tangible goods that normally survive various uses.
Industrial goods: Products acquired by individuals and organizations to process or use them in a business.
Unsought goods : Consumer goods that the consumer does not know, or that he knows but does not normally think about buying.
Non-durable goods : Tangible goods that normally run out after one or more uses.
Best effort: Placement method whereby investment banks only commit to doing their best.
Book building: Process that will determine the final placement price of the stock. In it, all the offers, in quantity and price, made by the interested parties are registered.
Business portfolio: Set of businesses and products that make up the company.
Demand curve : Curve that shows the number of units that the market will buy in a given period at different prices.
Primary placement: Issuance of shares whose objective is to produce a capital increase.
Secondary placement: Issuance of shares that does not produce a capital increase. Investors tend to view it with little sympathy because the money raised usually cannot enter the company.
Combined placement: Integrates the two previous methods.
Definition of the mission: Statement of the general purpose of the organization, this is what it wants to achieve in the global context.
Derived demand: Organizational demand that ultimately comes from (or derives from) the demand for consumer goods
Down round: Financing sought when the performance of the company has declined significantly.
Account statement: Financial statement that shows the assets, obligations, net profits of a company at a certain time.
Operating statement: Financial report showing the company's sales, cost of goods sold, and expenses for a completed period.
Early-stage capital: Next phase of financing after seed capital, it is collected when the business is in its startup phase.
Capital expansion: Second or third stage of funds for the growth of a company that is generating income.
Flat round: Financing sought when the performance of the company has been average or mediocre.
General partner: Independent fund management group; they receive a portion of the proceeds from managed funds.
Global coordinator: Investment bank in charge of structuring and coordinating the ipo.
Green shoe: This is a clause included in the securities placement agreement that establishes that the issuer may authorize the placement consortium to distribute a greater number of shares at the original price.
Gray market Gray market: Unofficial stock market that takes place between the close of the subscription and the official start of its listing.
Financial intermediaries: Banks, finance companies, insurance companies and other institutions that help finance transactions or insure against risks related to the purchase and sale of goods.
Ipo initial public offering: It is the process by which a company places its shares for the first time in an authorized stock market.
Incubator: A company that provides different facilities for setting up a company (offices, management, marketing, and the like) and helps companies in formation in exchange for an equity interest in the business.
Limited partner: Passive investor in an investment fund, which does not fulfill an active management role.
Gross margin: Difference between net sales and cost of goods sold.
Private equity: Private investment groups whose operations range from start-up capital to the capital required for the different rounds.
Quiet period: Period during which the company and the participating banks cannot release any type of information. In the United States, this stage lasts up to 25 days after the ipo.
Return on Investment (RI): Common measure of administrative effectiveness; relationship between net earnings and investment.
Executive Summary: An introductory section of a marketing plan that presents a concise summary of the main objectives and recommendations presented in the plan.
Replacement capital: Funds to acquire shares in a company from other shareholders of the same (individuals, risk funders or the stock market).
Seed capital: First step of venture capital, being able to work sometimes, in conjunction with «angels».
Transactions: Business between two parties that involves at least two things of value, agreed conditions, term of the agreement and place of the same
Money transaction: Marketing transaction in which goods or services are exchanged for money
Barter Transactions : Marketing transaction in which goods or services are exchanged for other goods or services
Time to market: Period of time from the seed capital status of a company to when it reaches an ipo.
Strategic Business Unit (SBU): A company unit whose mission and objectives are different and can be planned independently; It can be a company division, a product line in a division, or sometimes a single product or brand
Up round Financing: sought when the performance of a company has been very good and its valuation is increasing.
Underwriting: Placement method. The participating banks undertake the commitment to acquire all the unplaced shares at a certain price.
Venture capital: This is a segment that makes investments focused on higher risk dates and can also reach initial ventures that require early funds to develop prototypes and / or carry out "beta" tests.
CONCEPTS ON BUSINESS DECISION MAKING
Strategic Risk: It is identified as a characteristic, circumstance of a project or condition of the environment in which it is developed, in which it is recognized that it may have a potential negative effect on the project or on the quality of the products. Example: Increase in unemployment rate and informal trade. Example: Increase in inefficiency to provide services due to Increases in service needs in the face of change processes in international trade models.
Contingency: By contingency is understood any possibility that something happens or not, that a certain situation may or may not occur. The concept, in the organizational field, refers to all those events that impact the organization's activity to the point of damaging its normal operating capacity. Examples: Prolonged power outages, water floods, cybercrime, incessant insecurity.
Global Objective: It is the ultimate or longer term scope or development goal that the specific or strategic objectives will contribute to achieve. It is usually linked to the mission of the organization. Example: Promote the right of every woman, man and child to enjoy a healthy life, with equal opportunities for all.
Strategic Objective: It is the approach of where you want to go long term. It is considered to facilitate decision making with lasting effects and that has an impact on the entire organization. They are set by top management. Example: Strengthen decision-making in middle management in the next twelve months. Example: Improve the organizational climate in the next 2 years.
Tactical Objective: They are built based on the strategic objective of the organization. They are called tactical objectives because they are the formal objectives of the company and are set by areas to help achieve its purpose. Example: At the end of the Leadership workshop, the participants will be in a position to assume the role of leader in various situations of their daily lives and in the various areas in which they operate. Example: That the participants acquire the necessary knowledge about the most effective leadership models in the high-performance organization.
Strategy: It constitutes the route to be followed by the main lines of action to achieve the purposes, objectives and goals set. Examples: Budget discipline to achieve economic stability in a country. Fundamental principles and routes that will guide the administrative process to achieve the objectives to which it is desired to reach. A strategy shows how an institution intends to achieve those goals. 3 types of strategies can be distinguished: short, medium and long term according to the time horizon.
Goal: It constitutes the quantitative expression of the objectives or the results that are intended to be obtained. It is the desired level of performance. It is expressed in quantities referred to a space and a specific period. Examples: a) A Housing Institute has among its goals to deliver 2,000 more houses in 2009; b) A worker establishes as his goal to save 15% of salary in the first semester of the year.
Objective: The desired result is determined. What would be ideal and what is possible to achieve. The objective must be expressed in terms of results, that is clear, priority, consistent. That it is ambitious but achievable, that it is limited in time, that it includes necessary elements such as: quantity, quality. It is a statement expressed through an action verb, which answers the questions: What do we want to achieve? How much do we want to achieve? Where is it going to take place? By when do you want to achieve?
SWOT (Strengths, Weaknesses, Opportunities, Threats): It is a tool that allows to form a picture of the current situation of the company and organization, thus allowing to obtain an accurate diagnosis that allows, based on this, to make decisions in accordance with the objectives and policies formulated. SWOT analysis involves performing an analysis of the entity's environment and classifying the information to identify action alternatives, said classification is based on the strengths that an organization has, they are a defense against possible threats in the environment and weaknesses can be taken as the Waste of opportunities in the external environment. Strengths and opportunities refer to INTERNAL conditions of the organization itself, while weaknesses and threats refer to EXTERNAL conditions to the organization and that impact it. Example:Strengths are teamwork and leadership. The weaknesses are lack of motivation and pessimism. The opportunities are to increase productivity and effectiveness. The threat is excessive government regulation.
Mission: It specifies the functional role that the organization will play in its environment and clearly indicates the scope and direction of its activities. It is the reason for being of an organization.
Priority: qualitative element that determines the highest preference; it is used in planning or scheduling to point out what is most important and therefore requires more attention. Examples: Goal Achievements; transparency.
Need: The state derived from the lack or lack of something at a given time and under certain circumstances. Example: A customer service department with 5 employees. Over time the number of clients increases, until it reaches a level where the 5 employees cannot serve all of them and the need arises to hire another employee.
Strategic Plan: Highly specialized approach to planning, with a global, integrative, innovative and adaptive perspective, developed by the Organization's Senior Management, who through the systematic analysis of current and future own and external factors and indicators, which will affect its evolution, project the competitive permanence of the company in the most distant possible scenario, limiting the uncertainty of the future and preparing it from today to redefine it in the morning. Example of an Opportunities program, contemplated in the National Development Plan. Its classification was adapted to the methodology presented here, exclusively as an example:
Tactical Plan: Tactical planning is one that corresponds to develop the functional or departmental areas of the organization. The purpose of tactical planning is the progressive implementation or execution of what is stipulated in the strategic plan. The tactical planning is carried out from the current strategic plan and corresponds to carry it out to the functional directors or middle managers. Example: Modify the organization's operation and procedure manuals.
Operational Plan: Operational plans are developed from the tactical plans of each functional area or department and specify in detail the following questions: what, how, who, when, where, with what. These questions are about the tasks, activities and processes to be carried out, with time horizons that can be annual, quarterly, monthly, weekly or even daily. Flow charts or Gantt charts are commonly used in operational planning, since they require the greatest degree of detail and precision. Example: Study program and analysis of administrative reforms.
Vulnerability: Susceptibility of receiving damage, affectation or injury under certain circumstances. Examples: a) Municipality x of the state of Guarico, has suffered constant economic losses due to the drought, this situation has been repeated in the last 2 years and is something that must be taken into account for the agricultural budget
Synchrony: Coordinated interaction. According to the general theory of Systems, the interactions between the parts or components of a system generate an added value greater than that which would be achieved if each component worked separately. It refers to the action of one or more substances that have different effects when put together than they can have individually. Example: A production line in a manufacturing company. Each person on the line performs a defined action to obtain the final product.
Facilitator: Member-Leader of a team whose main responsibility is to provide the means and / or resources necessary to simplify the task and achieve the objectives of a team. Examples: The instructor who teaches courses in organizations; the office manager and / or co-worker who shares her ideas and work techniques.
Interactivity: It is the exchange of information between different entities or systems that generates effects between them (according to the Schneiderman paradigm). The interactivity between the members of a team is an element that depends on the degree of integration that has developed between them. Examples: a) When it comes to modifying, updating or reforming company policies on wages or days off, in an interactive context the management and employees will contribute ideas and all will be taken into account when reaching a final decision. b) It not only consists of all team members talking to each other. This is only part of it, when talking about interactivity it is said that all the opinions of the members of a team are heard, valued and accepted or rejected in accordance with the common good.
Situational Influence: Any action or example of behavior that encourages other people or groups to change their attitude and behavior. Example: When a collaborator goes to his boss to clear any doubts or questions about a certain project and does not receive feedback or does not manage to clear his doubts, communication is broken, generating a negative influence on the situation.
Input: Inputs are products, services or information necessary to carry out a process. The inputs are provided by the suppliers of the process, and to avoid variability in the process they must be clearly specified. Examples: In the manufacture of shoes, the main inputs are leather, glue, accessories and the energy used in manufacturing, which in the end allow them to be built and offered. When it comes to customer service or offering a service, the input will be the employee's own attention and the resources or skills they have to serve the customer.
Standard: It is the measurable part of the work goals: quantity, time and cost and can be classified into three types: a) standard of results of quantity of a work goal; b) standard of time results of a work goal and c) standard of cost results of a work goal. Examples: A minimum number of sales achieved by the commercials of a company; a number of orders processed in a certain period…
Indicator: Explicit measure used to determine the progress of the objectives and what really happens compared to what has been planned in terms of quality, quantity and timeliness.
Total Quality: Involving process that involves all members of an organization in the identification and continuous improvement of each aspect of the service and the continuous improvement of the systems and processes of each product or service. "Do things right the first time." Examples: The attention in the service to users, clients and beneficiaries as the raison d'être of any public institution; ISO 9000 and 9001 certification.
Budget: Advance calculation of an expense or service in an accounting document that shows the anticipated estimate from income and expenses related to a certain activity or organization for a certain period of time.
Download the original file
