| List of Figures | p. ix |
| Acknowledgments | p. xiii |
| Ernst and Young Financial Services Industries Consulting Practice | p. xv |
| Introduction to Performance Measurement | |
| The Changing State of Banking | p. 3 |
| How to Use This Guide | p. 5 |
| Strategic Performance Measures | p. 7 |
| The Changing Evolution of Management Information | p. 21 |
| Income Statement Components of Performance Measurement | |
| Defining the End Product | p. 39 |
| Income Statement Presentation and Classification | p. 40 |
| Profit and Loss versus Contribution Reporting | p. 46 |
| Expense Component Classifications | p. 50 |
| Income Statement Components | p. 63 |
| Revenue Components | p. 64 |
| Other Income Statement Items | p. 73 |
| Surveys | p. 79 |
| Other Branch Issues | p. 81 |
| Cost Accounting Approaches and Methodologies | p. 85 |
| Full-Absorption Costing (Average Actual Costing) | p. 86 |
| Expected Costing | p. 88 |
| Standard Costing | p. 90 |
| Components of Standard Costs | p. 91 |
| Techniques for Unit Cost Development | p. 95 |
| Choosing an Appropriate Technique | p. 99 |
| Hourly-Rate Calculations | p. 100 |
| Related Issues | p. 101 |
| Automation | p. 102 |
| Level of Accuracy | p. 103 |
| Cost Transfer Approaches | p. 103 |
| Direct Allocation Approach | p. 104 |
| Sequential Allocation Approach | p. 107 |
| Sequence Determination | p. 108 |
| Simultaneous Allocation Approach | p. 111 |
| Choosing the Right Cost Transfer | p. 113 |
| Impact of Unit Costing | p. 113 |
| Multiple Centers | p. 114 |
| Choosing an Expense Distribution Mechanism | p. 116 |
| Specific Selection Criteria | p. 118 |
| Sources of Volume Data for Use as Allocation Bases | p. 120 |
| Sample Surveys | p. 121 |
| Manual Logs | p. 121 |
| Activity Based Costing | p. 123 |
| Activity Based Costing Defined | p. 125 |
| Activity Based Costing's Foundation in Business Process Analysis | p. 126 |
| Activity Based Costing Supports Consistent Views of Profitability Measurement | p. 128 |
| How Does Activity Based Costing Work? | p. 129 |
| Illustrative Example of Activity Based Costing Flow | p. 133 |
| Overall Approach to Implementing Activity Based Costing | p. 137 |
| Some Implications of Activity Based Costing's Use | p. 140 |
| Information Technology | p. 143 |
| The Information Technology Organization | p. 143 |
| Developing Computer Operations Costs | p. 146 |
| Cost Allocation in a Non-Mainframe Environment | p. 159 |
| Computer Operations Costs Allocation Summary | p. 161 |
| Variations on Computer Operations Costing | p. 161 |
| Developing Systems and Programming Costs | p. 162 |
| Developing Network Computing Costs | p. 164 |
| Data Collection Requirements | p. 165 |
| Job Accounting Systems | p. 166 |
| Project Control Systems | p. 167 |
| Transfer Pricing of Funds | p. 175 |
| Funds-Transfer Pricing Objectives | p. 176 |
| General Principles | p. 178 |
| Specific Issues | p. 180 |
| Looking into the Future | p. 183 |
| Balance Sheet Components of Performance Measurement | |
| Balance Sheet Components of Performance Measurement | p. 187 |
| What Value Should Be Used? | p. 188 |
| Assignment of Balances | p. 189 |
| Responsibility Assignment and Performance Measurement | p. 193 |
| Assignment of Compensating Balances | p. 194 |
| Assignment of Corporate Demand Deposit Balances | p. 199 |
| Assignment of Workout Loans | p. 200 |
| Assignment of Interest Payables and Interest Receivables | p. 202 |
| Assignment of Fees Receivable | p. 203 |
| Assignment of Fixed Assets | p. 204 |
| Loan Loss Reserve and Loan Migration Analysis | p. 205 |
| Float | p. 212 |
| Deposit Reserves | p. 214 |
| Due-From Accounts | p. 215 |
| Capital Issues | p. 217 |
| Why Assign Capital? | p. 217 |
| Economic Assignment | p. 219 |
| Portfolio Effects | p. 221 |
| Hurdle Rates | p. 223 |
| Market Comparables | p. 225 |
| Nonasset-Intensive Businesses | p. 225 |
| Off-Balance Sheet Instruments | p. 226 |
| Line-of-Business Results | p. 226 |
| Implementation Issues Related to Performance Measurement | |
| Getting Started | p. 231 |
| Approaching the Development of Performance Measurement Information | p. 231 |
| Stating Objectives | p. 232 |
| Determining Project Scope | p. 233 |
| Accounting Theories | p. 234 |
| Allocation Methodologies | p. 235 |
| Communications and Documentation | p. 236 |
| Report Formats | p. 236 |
| Data Management | p. 237 |
| Organizing and Staffing | p. 239 |
| Conceptual Design | p. 240 |
| Implementation | p. 240 |
| Staffing Requirements | p. 241 |
| Steering Committee | p. 241 |
| Task Forces | p. 242 |
| Keys to Success | p. 246 |
| System Design Considerations | p. 251 |
| Conceptual Design--Foundation | p. 251 |
| Detailed System Design | p. 255 |
| System Implementation Issues | p. 263 |
| No Two Performance Measurement Systems Are Exactly Alike | p. 263 |
| Assessing Information Needs and Design Implications | p. 264 |
| Implementation Planning and Scope | p. 266 |
| Platform Selection Criteria | p. 270 |
| New Technologies: Changing the Economics | p. 273 |
| Performance Reporting Data Architecture | p. 274 |
| Build or Buy (and Modify) | p. 277 |
| System Development and Implementation | p. 278 |
| Using Performance Measurement Information | |
| Managing and Using Product and Customer Information | p. 285 |
| Managing the Information | p. 286 |
| Using the Information | p. 289 |
| Pricing Elasticity | p. 292 |
| Planning and Budgeting | p. 307 |
| Methodologies for Planning and Budgeting | p. 308 |
| Elements of Budgeting | p. 311 |
| Forms of Budgeting | p. 312 |
| Value-Added Budgeting Components | p. 317 |
| Cost/Expense Management | p. 319 |
| Traditional Uses of Cost and Profitability Information | p. 320 |
| Fixed and Variable Cost Analysis | p. 322 |
| Acquisition Cost Analysis | p. 323 |
| Capacity Analysis | p. 324 |
| Life-Cycle Costing | p. 325 |
| Target Costing | p. 326 |
| Total Cost Management Overview | p. 327 |
| Why the Process Analysis Is Important in Total Cost Management | p. 329 |
| Root Cause Identification | p. 330 |
| Process Value Analysis | p. 330 |
| Value-Added versus Non-Value-Added Cost Analysis | p. 332 |
| Continuous Improvement | p. 333 |
| Index | p. 335 |
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