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Unformatted text preview: 10-K Most critical section: Risk factors-covers everything that could go wrong 2 nd most critical section: Selected financial data-summary info for 5 years-can do a ton of analysis quickly Effect of Inflation and Changing Prices: can be substantially important in some industries Chapter 2 HW-Movement towards fair value is because things change prices over time -one criticism of FS is there is little forward looking info...companies are hesitant to do so because of liability concerns about promises made-2 types of inputs for Fair Value acct:-observable: market prices obtained from sources independent of reporting company i.e. quoted market prices of traded securities-unobservable: values determined through assumptions from the reporting company b/c the asset/liab is not traded 3 levels: level 1 is most reliable and exact prices, level 2 are quoted prices for identical tems (not exact though), level 3 are used when no substitutes can be found, they reflect a managers assumptions and are least reliable...
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- Spring '11