23-Other - Chapter 23 Chapter 23 Other Measurement and...

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Unformatted text preview: Chapter 23 Chapter 23 Other Measurement and Disclosure Issues Other Measurement and Disclosure Issues 2 Other Measurement and Other Measurement and Disclosure Issues Disclosure Issues Disclosure Issues Full disclosure principle revisited Increase in reporting requirements Accounting policies Illegal acts Segmented reporting Interim reporting Internet financial reporting and continuous disclosures IFRS/Private Enterprise GAAP Comparison Comparison of IFRS and private enterprise GAAP Looking ahead Other Measurement Issues Related-party transactions Subsequent events Reporting on financial forecasts and projections Auditors Reports Unqualified opinions Qualified opinions Adverse opinions Unincorporated Businesses 3 The Full Disclosure Principle The Full Disclosure Principle The full disclosure principle calls for financial reporting of significant facts affecting the judgement of an informed reader The problems of implementing this principle are costs of disclosure or information overload The profession continues to develop guidelines: should a given transaction be disclosed what format this disclosure should take 4 Increase in Increase in Reporting Requirements Reporting Requirements Reasons for increasing reporting requirements of public companies: Complexity of the business environment (e.g. derivatives, business combinations, pensions) Need for timely information (e.g. interim data, financial forecasts) Accounting used as a control and monitoring device (e.g. disclosure of management compensation, related-party transactions, errors and irregularities) 5 Types of Financial Information Types of Financial Information F i n a n c i a l S t a t e m e n t s B a l a n c e S h e e t S t a t e m e n t o f I n c o m e S t a t e m e n t o f C a s h F l o w s S t a t e m e n t o f C h a n g e s i n S h a r e h o l d e r s E q u i t y / R e t a i n e d E a r n i n g s N o t e s t o t h e F i n a n c i a l S t a t e m e n t s E x a m p l e s : A c c o u n t i n g P o l i c i e s C o n t i n g e n c i e s I n v e n t o r y M e t h o d s N u m b e r o f S h a r e s O u t s t a n d i n g A l t e r n a t i v e M e a s u r e s ( m a r k e t v a l u e s o f i t e m s c a r r i e d a t h i s t o r i c a l c o s t ) 6 Types of Financial Information Types of Financial Information O th e r M e a n s o f F in a n c ia l R e p o r t in g E x a m p le s : M a n a g e m e n t D is c u s s io n a n d A n a ly s is L e tte r s to S h a r e h o ld e r s O t h e r I n f o r m a t i o n E x a m p l e s : D i s c u s s i o n o f C o m p e t i t i o n a n d I n d u s t r y A n a l y s t s R e p o r t E c o n o m i c S t a t i s t i c s N e w s A r t i c l e s a b o u t C o m p a n y 7 Notes to Financial Statements Notes to Financial Statements Notes amplify or explain items presented in...
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This note was uploaded on 10/26/2011 for the course ACCT 3410 taught by Professor Jobs during the Spring '11 term at Kwantlen Polytechnic University.

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23-Other - Chapter 23 Chapter 23 Other Measurement and...

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