Syllabus C2

Explain the principles of decision making, including the identification and use of relevant cash flows and qualitative factors.

- Relevant cash flows and their use in short-term decision making.
- Consideration of the strategic implications of short-term decisions.

Explain the conflicts between cost accounting for profit reporting and inventory valuation, and information required for decision making.

- Relevant costs and revenues in decision making and their relation to accounting concepts.

Explain the issues that arise in pricing decisions and the conflict between marginal cost’ principles, and the need for full recovery of all costs incurred.

- Marginal and full cost recovery as bases for pricing decisions in the short and long-term.