Financial Decisions: Focusing on Financial Impact & Innovation

Financial Decisions: Focusing on Financial Impact & Innovation
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While making financial decisions one has to consider the financial impact and innovation that affect the financial position of an organization, person or entity. A financial impact is an effect that cannot be controlled, but which change the financial position (Geddes, 2013). Businesses operate for profits and in cases where there are operating losses the operating expenses have a financial impact on the reporting entity if they affect the finances negatively after the occurrence of an unlikely event. Managers and accountants then need to pay attention to financial impact to mitigate risks that may threaten the financial position of the reporting entity.
Financial innovation is associated with the creation and use of different financial instruments for financial purposes (Geddes, 2013). The financial innovation process also includes the products and technologies. Some of the financial products include being securitized assets, mortgages and derivatives,...