Full Disclosure Principle – Calls for financial reporting of any financial facts significant enough to influence the judgment of an informed reader.
Illustration 24-1: Financial Statements – Balance Sheet, Income Statement, Statement of Cash flows, and statement of changes in stockholders’ equity. Notes to financial statements – Accounting policies, contingencies, inventory methods, number of shares of stock outstanding, alternative measures. Supplementary Information – changing prices disclosures, oil and gas reserves information. Other means of financial reporting – management’s discussion and analysis and letter to stockholders Other information – Backlog and sec forms, analysts reports, economic statistics, news articles about company. * Financial Statements & Notes to Financial Statements: Basic Financial Statements * Financial Statements, Notes to Financial Statements, & Supplementary Information: Area directly affected by existing FASB rules. * Financial Statements, Notes to Financial Statements, Supplementary Information, & Other means of Financial Reporting: Financial Reporting * Everything plus “other information”: All information useful for investment, credit, and similar decisions.
Notes to Financial Statements – the means of explaining the items presented in the main body of the statements. Explain in Qualitative terms information. Supplementary quantitative data can also be given to expand the nature of information. Explain restrictions, financial and basic contractual arrangements.
Accounting Policies – are the specific accounting principles and methods a company currently uses and considers most appropriate to present fairly its financial statements. * GAAP state it is essential for financial statement users to have this information for making sound decisions. * Must be an integral part of the financial statements. * First note or separate summary of