Accounting technicians scheme west africa

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A.6.1 Size Based Classification
Based on the size of the capital investment, total assets, sales turnover or the number of people employed, business can be classified as micro, small, medium or large business. The Federal Ministry of Industries has classified enterprises into four categories by size. These are micro enterprises, small scale enterprises, medium scale enterprises and large scale enterprises. According to this classification i) A micro enterprise is a business with value of total fixed assets excluding land not exceeding N ii) A small scale enterprise is that with value of fixed assets between N and N million. iii) Medium scale enterprises have the value of fixed assets ranging between N million and N million. iv) Large scale enterprises are those whose fixed assets exceed the N million mark. Business enterprises may also be classified according to the number of paid employees. The classification currently applicable in Nigeria using size of employment is as follows
Micro-enterprises
1-10 employees Small scale enterprises
11-100 employees Medium scale enterprises
101-300 employees Large scale enterprises
301 and above. The classification of business on the basis of size varies from one period to another within the same country. For example, in the seventies, a small scale business in Nigeria was defined as that with total assets excluding land not exceeding N, and size of employment not exceeding 50.

A.6.2 Use of Output Based Classification
The Use-Based Classification emphasizes the nature of output and its use. Business can be grouped into basic industries, capital goods industries, intermediate goods industries and consumer goods industries. a) Basic industries are those which provide the basic inputs or raw materials for the development of other industries. For example, fertilizer is the basic input for agriculture coal, oil and gas are also regarded as basic to the development of other industries. b) Capital goods industries are industries that produce plants, machinery, equipment, and tools which are required for the manufacturer of other goods and services. Capital goods industries require high capital investment. c) Intermediate goods industries are industries that produce goods such as materials, parts and components used in the production of other goods. This type of industry enhances the value of goods by changing their physical forms. d) Consumer goods industries are industries, the output of which is used by the final

7 consumers. Consumer goods industry can be further classified as consumer durables and consumer non-durables. Examples of consumer non-durables are soaps, toothpaste, foodstuff and other consumable items. Consumer durables include refrigerators, television sets, bicycles, cars, etc. which serve the customers fora long period of time.

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