December 30, 2013
Full disclosure is the reporting of any financial facts significant enough to influence the judgment of an informed reader. The Financial Accounting Board is responsible for establishing the rules and regulations in regards to a company providing full disclosure with their financial statements. The areas that are directly affected by the FASB include financial statements, notes to the financial statements and the supplementary information. Although these are the ones directly affected by the FASB, for a company to participate in full disclosure the company should also include other means of financial reporting and any other pertinent information. (Kieso, Weygandt, & Warfield, 2012).
Interim Reporting Each business can use a different method of financial reporting so it is important ethically to report anything and everything that the “informed reader” will need to make a fair assessment of the business. According to the AICPA’s Special Committee on Financial Reporting businesses must provide more forward looking information, focus more on the factors that create longer term value and better align information that is reported externally with the information reported internally. For a business to be able to have up to date information it is important to have interim reports. Interim reporting will break down the length of time between the reporting which in turn will give a better forecast. As part of an interim report the following will be disclosed the sales or gross revenues, basic and diluted earnings per share, seasonal revenue, costs or expenses, significant changes in estimates or provisions for income taxes, disposal of an extraordinary item, contingent items, changes in accounting principles and significant changes in financial reporting. As important as interim reporting is a business does want to stay away from