Q1: What are objectives that a business pursue?

What is a business objective?

A business objective is a measurable result an organization is aiming to accomplish. Many

business professionals form objectives using the SMART goal method, which stands for specific,
measurable, achievable, relevant and time-based.

As the organization grows, it's important to regularly form new business objectives to effectively
track employees' performance and ensure the business is progressing and improving.

Business objectives are also a great way for you and your team members' employees to identify
your strengths and areas of improvement. Once you determine these, you can implement new
strategies to help enhance your own performance, which contributes to improving the
organization's efficiencies overall.

Reference: A Guide To the Objectives of an Organization

Why are business objectives important?

Creating a strong business objective is important for your organization because it:

- Keeps employees focused on growth

- Strengthens key elements of the business
- Motivates you and/or team toward a goal
- Helps structure tasks and responsibilities
- Can increase your market share
- Drives team cooperation and collaboration
- Builds better working relationships
- Can promote better cost control and budgeting

References: What Is the Difference Between Goals and Objectives?

The four main objectives of a business

While every business might have specific goals according to their specific industry, team,
product, financial standing, business objectives often fall into four main categories:

- Economic
 - Human
- Organic
- Social

1. Economic objectives

Most businesses cite financial growth as an overarching goal or business objective, but
depending on your business’s unique financial needs, your economic objective could be:

Survival: While the ultimate goal is to make enough money to pay for all overhead costs and
also make a profit, small businesses or new businesses might be focused on simply making
enough revenue to cover the costs so that they can stay in business.

Profit earning: Beyond business survival, owners want to earn enough to have a salary and/or
be able to grow the business.

Growth: Most business owners consider growth: how they will grow, what actions they will take
when demand outpaces production and how short- and long-term growth will affect their
business.

2. Human or individual objectives

The motivation of human objectives in a business is to find ways to meet the needs of your
employees, so that they feel valued and supported. Common examples of human or individual
objectives include:

- To pay competitive salaries

- To offer employee perks, like unlimited vacation or team appreciation events
- To provide safer and more health-conscious working environments
- To provide personal growth and development opportunities
- To provide incentives to motivate employees

3. Organic objectives

Organic business objectives are goals that incorporate all aspects of the business: its
development, survival, progress and outlook. Common examples include:
 - To use profits to raise capital or strengthen the business
- To use growth models to contribute to business’s success
- To drive innovative ideas through focused activities
- To improve brand and reputation
- To grow production size to meet demand

4. Social objectives

Social business objectives are created to help or give back to society in some way. Businesses
often set social goals:

- To ensure better quality products for customers

- To ensure fair prices for customers
- To ensure fair trade practices
- To ensure fair employment practices (anti-discriminatory)
- To protect the environment by taking reasonable steps to limit corporate carbon footprint
- To serve the community (schools, charities, social programs etc)

Reference: 15 Ethical Principles in Business

Q2: What are the needs of internal and external stakeholders?

Q3: What are the differences between IFRS and GAAP?

Local vs. Global
Rules vs. Principles
Inventory Methods
Inventory Write-Down
IFRS
Is used in more than 110
countries around the world,
including the EU and many
Asian and South American
countries
Principles-based
First In, First Out (FIFO)
Allow inventories to be
GAAP
Is only used in the United
States.
Rules-based
First In, First Out (FIFO)
Last In, First Out (LIFO)
Allow inventories to be
Reversals
Fair Value Revaluations
Fixed Assets
Investment Property
Lease Accounting
written down to market value. written down to market value.
If the market value later
increases, IFRS allows the
earlier write-down to be
reversed
Allows revaluation of the
following assets to fair value
if fair value can be measured
reliably: inventories,
property, plant & equipment,
intangible assets, and
investments in marketable
securities
Under IFRS, these same
assets are initially valued at
cost, but can later be revalued
up or down to market value
Includes the distinct category
of investment property
- Allows lessees to
exclude leases for low-
valued assets
- Includes leases for some
kinds of intangible assets
Reversal of earlier write-
downs is prohibited
Revaluation is prohibited
except for marketable
securities
GAAP requires that long-
lived assets, such as
buildings, furniture and
equipment, be valued at
historic cost and depreciated
appropriately.
Has no such separate
category
- Has no such exception
- Excludes leases of all
intangible assets from the
scope of the lease
accounting standard

Q4: What are the constrains and threats of IFRS and GAAP?

IFRS:

- IFRS is less detailed than GAAP

 - Implementation costs for small businesses: The transition to IFRS for these businesses far
outweighs the benefits
- Capital markets and the standards are not the same in different countries

GAAP:

- Not being used globally

- GAAP tends to take a "one-size-fits-all" approach rather than accounting for the immense
diversity that is often seen between companies.
- Long wait times for new standards: GAAP policy boards go through rigorous deliberation
and an extensive process to set new standards for the generally accepted accounting
principles