Financial Statements Of Business Enterprises

SFAC 5 address how various elements of financial statements and how they should be recognized and measured. Recognition is referred to as the process of admitting information into financial statements and measurement as the process of associating numerical amounts to the elements. According to SFAC 5, an item should be recognized in the basic financial statements when it meets four criteria such as definition, measurability, relevance and reliability.

The 2012 income statements for Google and Apple are built according to the following assumptions. For each company, the revenue will increase at the average rate for the past two years. The dynamics for each company have changed significantly in the past two years, as each in that time span has grown from being a relatively small player in mobile to being the two world leaders. Apple in particular has only had the iPad for a couple of years, so prior growth rates are not applicable. For Google, the short time frame reflects what should be maturity in the online advertising market, resulting in growth rates that are slower than the company has enjoyed on average in the past 10 years.

The IASB and FASB are working on a joint project to develop a common conceptual framework which based on the existing conceptual framework underlying FASB and IASB. The objective of the measurement phase “is to provide guidance for selecting measurement bases that satisfy the objectives and qualitative characteristics of financial reporting” (FASB, 2009b). In fact, the IASB’s framework defines measurement as the process of determining the monetary amounts that are recognized in financial statements (IASB, 2001) whereas FASB’s framework separates measurement into selection of the monetary unit and choice of attribute (SFAC 5, 2008). This indicates that both framework do not provide identical measurement, neither provide much guidance on measurement (IASB, 2004a). Thus measurement is the most challenging components that which has not been reached

The balance sheet, income statement, and statement of cash flows for each company is presented in the Appendix. Dollar Tree’s financial statements are presented in Attachments 2-4 (pages XXX-XXX). Dollar General’s financial statements are presented in Attachments 5-7 (pages XXX-XXX). All calculations described in this current section can be found in Attachment 8 (page XXX).

When financial statements represent more than one corporation, we refer to them as consolidated financial statements. So, how does consolidated financial statements play a role in corporations? What are the reasons and benefits for the consolidation of financial statements? What are the steps that are necessary to ensure the proper accounting? What are a few excerpts from Accounting Standards Codification? Thus, these are a few of various questions that are asked to further understand Consolidated Financial statements.

In any business operations, full financial disclosure refers to the provision of the necessary information about a company for better decision making by the people accustomed. It is the financial revelation of a given company. There are some financial disclosures in any business that ensure proper understanding of financial statements to the financial readers, or potential auditors. Examples are the annual financial reports and the financial declarations of the company. The annual financial reports of the enterprise are very useful since they discloses the revenues recognized in the business, and the accountability of the inventories plus the income taxes accounted for during that period of operation. Second, is the disclosure of this financial statements which gives the actual revelation of the company 's stock options, liabilities and the effects of foreign currencies?! This disclosure includes the company 's balance sheet of the year, income statements and also the cash statements flows of that year. This information gives a proper understanding of the financial status users about the effects of inflation and price change on property and inventories (Berger, 2011).

(2012). Business analysis valuation: Using financial statements (5e ed.).] This model can give a actual probability on firm being bankruptcy finally, and it is the most intuitive way.

To be recognized, revenues must be realized or realizable and earned. The revenue-earning activities include delivering or producing goods, rendering services or performing other activities that constitute its ongoing major or central operations, and revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues [SFAC No. 5, “Recognition and Measurement in Financial Statements of Business Enterprises”] (Streaser, Sun, Zaldivar, & Zhang, 2014). The SEC, (Staff Accounting Bulletin No. 104) believes that revenue is generally realized or realizable and earned when the following criteria are met:

- The standards and requirements that govern the preparation of the consolidated financial statements 2015 is International Financial Reporting Standards (IFRS). And it’s follow accounting policies.

Under the historical cost model assets are initially reported at the cost incurred on their acquisition. Subsequent to initial recognition, this cost may be allocated as an expense to reporting periods in the form of depreciation or amortization for certain assets, as the service potential or ability to generate economic benefits provided by such assets are consumed over their useful lives.

For organizations, it is essential to collect information over a specific period of time and present the information in a structured way towards intended readers. The collection of information can be in the form of financial reporting, project reports and annual reports. Businesses sets goals at the beginning of a fiscal year, and when it comes to the end of the year, investors of the company would like to know how well did the company perform and what financial position is the company at. They are able to find the information in annual reports published by organizations to the general public. Likewise, organizations are required by law to prepare an annual report to present crucial information to shareholders, and allow regulatory agencies to access updated data. It is expected that neutrality should be the characteristic throughout the report. However, in narrative texts companies might create an image that is perceived to be optimistic and positive, neglecting poor performances.

1. by having a Good Operating Margin which is a margin ratio used in measuring a company 's pricing strategy and operating efficiency. Thus the operating margin. Measures your operating profitability, it indicates how much of each dollar of revenues used is left over after both costs of goods sold and operating expenses are considered. Operating margins are important because they measure efficiency. The higher the operating margin, the more profitable a company 's core business is. for example I Created a Mock report Called Dean 's Report I report the following Numbers on my Financial statement for my Event I held.

The health of any organization or firm is dependent upon the numbers associated with it. These include the firm 's income statement, balance sheet, statement of cash flows, and ratio analysis. For any investor, lender, or owner to have a full picture of the performance of any entity, it is imperative that they have an in depth knowledge of the construction of values associated with individual line items described and detailed in these documents. In addition, the overall health of the organization can be determined by the reflection of said numbers. In short, these documents make up the nutrition label of the specific company (U.S. Security and Exchange Commission, 2007).

Financial statements are an important part of any company. The financial statements provide potential investors, as well as the company’s management and creditors, with useful information about the financial position of the company. The financial statements of a company comprise the income statement, the balance sheet, and the statement of cash flows. Financial statements are important, but understanding and being able to use the information presented in financial statements to make decisions is also very important.

There are various models of asset measurement, these include Historical Cost(HCA), current purchasing power(CPP), replacement cost(RCA) or current cost(CCA), Net realizable