International Accounting

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CHAPTER 24
Full Disclosure in Financial Reporting
ASSIGNMENT CLASSIFICATION TABLE
Topics 1. 2. 3. 4. 5. 6. 7. 8. *9. The disclosure principle; type of disclosure. Questions 2, 3, 4, 24 1, 2 3 4, 5, 6, 7 1, 2 3 1 2 Brief Exercises Exercises Problems Cases 1, 2, 3, 4 1, 2, 3, 4, 5 5, 13 6, 7, 8

Role of notes that accom- 1, 5, 6 pany financial statements. Subsequent events. Segment reporting; diversified firms. Discussion and analysis. Interim reporting. 7 8, 9, 10, 11, 12 13, 14 17, 18, 19, 20

9, 10

Audit opinions and fraudu- 21, 22 lent reporting. Earnings forecasts. Interpretation of ratios. 15, 16 23, 24, 25, 29 8 8 4, 5, 6 4, 5, 6 4, 5, 6 4, 5, 6 4, 5, 6 26, 27 8, 9, 10 4, 5, 6 4, 5, 6 25, 28 1 1 1 1 1 1 3, 5 3, 4 11 12 14

*10. Impact of transactions on ratios. *11. Liquidity ratios. *12. Profitability ratios. *13. Coverage ratios. *14. Activity ratios. *15. Comprehensive ratio problems. *16. Percentage analysis.

*This material is covered in an Appendix to the chapter.

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ASSIGNMENT CHARACTERISTICS TABLE
Level of Difficulty Moderate Moderate Moderate Simple Moderate Moderate Complex Moderate Moderate Simple Complex Simple Moderate Moderate Simple Moderate Moderate Simple Moderate Simple Moderate Moderate Moderate Simple Moderate Time (minutes) 10-15 15-20 5-10 20-30 20-30 30-40 40-50 24-30 35-45 40-60 40-50 10-20 20-25 20-25 24-30 20-25 30-35 20-25 24-30 20-25 30-35 24-30 15-20 10-15 24-35

Item E24-1 E24-2 E24-3 E24-4 E24-5 E24-6 P24-1 P24-2 P24-3 P24-4 P24-5 C24-1 C24-2 C24-3 C24-4 C24-5 C24-6 C24-7 C24-8 C24-9 C24-10 C24-11 C24-12 C24-13 C24-14

Description Post-balance-sheet events. Post-balance-sheet events. Segmented reporting. Ratio computation and analysis; liquidity. Analysis of given ratios. Ratio analysis. Subsequent events. Segmented reporting. Ratio computations and additional analysis. Horizontal and vertical analysis. Dividend policy analysis. General disclosures, inventories, property, plant, and equipment. Disclosures required in various situations. Disclosures required in various situations. Disclosures, conditional and contingent liabilities. Post-balance-sheet events. Segment reporting. Segment reporting—theory. Segment reporting—theory. Interim reporting. Treatment of various interim reporting situations. Financial forecasts. Disclosure of results—ethics. Reporting of subsequent events—ethics. Effect of transactions on financial statements and ratios.

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LEARNING OBJECTIVES
1. 2. 3. 4. 5. 6. 7. 8. *9. *10. *11. *12. *13. Review the full disclosure principle and describe problems of implementation. Explain the use of notes in financial statement preparation. Describe the disclosure requirements for major segments of a business. Describe the accounting problems associated with interim reporting. Identify the major disclosures found in the auditor's report. Understand management's responsibilities for financials. Identify issues related to financial forecasts and projections. Describe the profession's response for fraudulent financial reporting. Understand the approach to financial statement analysis. Identify major analytic ratios and describe their calculation. Explain the limitations of ratio analysis. Describe techniques of comparative analysis. Describe techniques of percentage analysis.

*This material is covered in an Appendix to the chapter.

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CHAPTER REVIEW
1. Chapter 24 addresses the topic of financial statement disclosure. Accountants and business executives are fully aware of the importance of full disclosure when presenting financial statements. However, determining what constitutes full disclosure in financial reporting is not an easy task. Thus, the purpose of this chapter is to review present disclosure requirements and gain insight into future trends in this area. Chapter 24 presents basic financial statement analysis. This information is presented in Appendix 24A. Also included on the Wiley web site is a presentation of the effects...
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