Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 5

.............. Inventories Initial work in progress (Final inventories of work in progress) Inventories. Initial semi-finished products of production (Final inventories of semi-finished products of production) Cost of Finished Products Inventories Initial of finished products (Closing inventories. of finished products) Inventories Initial goods not processed but sold in the state in which they were purchased goods not processed but sold in the state in which they were purchased (Closing inventories of goods not processed but sold in the state in which they were purchased) ----------------------------------------------------------------- COST OF GOODS SOLD (COST OF SALE) 3. Administrative costs: Identifies all administrative costs and negative income components incurred for corporate representation purposes 4. Commercial costs: It identifies the sum of commercial, marketing and sales costs 5. Research and Dev. Costs: Identifies the sum of research and development costs incurred during the year 6. Overhead Costs: These costs identify notional values present only in companies belonging to a group. The holding company performs activities from which the subsidiaries or affiliated companies benefit free. It defines group strategy, identifies tax strategies, determines the financial management of intra-group flows, manages human resources at the senior/management level and, often, engages in institutional marketing activities. Subsidiaries or associates enjoy the benefits of these activities free of charge. The holding company does not 'pass on the costs to the companies by issuing invIAO (Italian Accounting Organism (Henceforth IAO, in italian language OIC))es but carries out the transaction off the books for internal company purposes only. In the presence of overhead costs in the reclassified profit and loss account, the net income for the year in the final balance sheet differs from the income in the reclassified profit and loss account by precisely the amount of the costs charged off-balance sheet. These amounts are set off the books, and thus, without impact on the subsidiary's financial statements, by parent companies. In the absence of accounting movements, these costs do not appear in the subsidiary's financial statements and therefore only represent amounts included in the reclassification to assess the performance of the subsidiary's management. Including this item allows for a better assessment of the subsidiary's characteristic performance. This company is also "loaded" with the negative income components of which, although it does not make any disbursements as the parent company bears them, it benefits from these amounts. 31 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) C © 2022 Global Journals Does the Formal Structure of the Cash Flow Statement have an Impact on the Understanding of the Data Contained in the Report Explaining the Company's Financial Dynamics? b) Non Characteristics 1. Revnue and cost from asset non charactetistic Management Non-capital assets are all income and expenses arising from capital investments, constituting invested capital, which is not used in the company's core business. As noted in the preceding pages, capital assets comprise two sub-aggregates, referred to as short-term assets and long-term assets, within which those balance sheet items must be included, respectively maturing within the financial year or beyond the next financial year not utilised in the company's core business. Examples include civil buildings, securities and equity investments (please note that the above reclassifications and remarks on profit and loss reclassified to cost of sales and revenues can be applied to all non-banking and insurance companies). If such non-characteristic balance sheet items result in revenues or if such investments require incurring costs, the negative and positive income values are to be included in the asset management of the non- characteristic business activity of the enterprise. 2. Income from financial management and financial management costs: All income and expenses arising from receivables or payables of a financial nature are to be included under financial management. These amounts consist primarily of interest income and expenses on current bank accounts or other financial debts and receivables. Following both national and international accounting standards, exchange rate gains and losses are also shown in this aggregate. This is because exchange rate activity is always considered, by the abovementioned standards, to be outside the purely typical business activity. 3. Revenues and costs from non-characteristic activities by definition: concerning non-characteristic activities by definition, it must be emphasised that the aggregate under consideration is often improperly identified with the expression "extraordinary revenues and costs". The aggregate of extraordinary expenses/income, however, does not coincide with the aggregate of non-recurring items by definition, as it is possible to identify numerous accounting values that, although ordinary, identify income items of non-recurring nature (e.g. capital gains/losses deriving from the sale of fixed assets connected to the regular replacement of assets within the production process). The aggregate 'non-typical income and expenses by definition' must include items that, by their