What is the impact of Business Drivers Accounting (BDA) on financial statements?

Business Drivers Accounting (BDA) focuses on understanding how various business activities and decisions impact financial performance and condition. By analyzing these drivers, businesses can see how operational decisions translate into financial outcomes.

When using BDA, it is essential to recognize that business drivers can have implications for both the income statement and the balance sheet. For instance, decisions about pricing, production levels, or cost management will influence revenue and expense accounts, directly affecting the income statement's profitability measures. Additionally, changes in business activities, such as investments in assets or logistics improvements, can impact the balance sheet by altering assets and liabilities values.

This holistic approach of BDA ensures that financial statements reflect not just historical performance but also the underlying business activities that drive that performance, highlighting its relevance across both critical financial reporting areas.