118-INCOME STATEMENTS-1 - Hidden reserves (smoothing)...

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118-Income statements p1 INCOME STATEMENTS Usefulness Evaluate past performance Predict future performance Assess likelihood of achieving future cash flows Profits matter! Dilbert Limitations All value added not measurable Choice of accounting methods Judgment Quality of earnings/earnings management Accelerated revenue recognition Delayed expense recognition One-time charges (“big bath”)
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Unformatted text preview: Hidden reserves (smoothing) Classification within the income statement Outright fictitious items Notion of permanent or recurring earnings Income statement components (chart) 118-Income statements p2 Examples Company Page CocaCola 5 DuPont 231 Newmont 254 Pfizer 273 Retained earnings Comprehensive income Intra-period tax allocation Earnings per share...
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This note was uploaded on 09/09/2009 for the course ECON 118 taught by Professor Loster during the Spring '07 term at UCSB.

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118-INCOME STATEMENTS-1 - Hidden reserves (smoothing)...

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