Financial Statements Paper Part 2

1193 WordsAug 1, 20125 Pages
Landry’s Restaurants, Inc Financial Statements II Classic Payroll Services Acc 497 October 5, 2010 Abstract The previous Landry’s Restaurants, Inc Financial Statements paper discussed the financial stability of the company from an independent viewpoint. The comparison of the assessment provided to the management perspective provided in the Annual Report will now be discussed. Concerns from management, and recommendations to address weaknesses and the managements concerns will be reviewed. Landry’s Restaurants, Inc Financial Statements II The financial condition of Landry’s Restaurants, Inc. was discussed previously based on the information provided in the financial statements of the company. The management of…show more content…
Notes, Interest and Restrictions Management is concerned about the higher interest rates resulting from the long-term debt obligations being created. Refinancing of bank credit into long-term notes has caused a material amount of interest increases and notes to be secured by stock of the company and its subsidiaries. Restrictions on indebtedness, net worth and fixed charge ratios must be adhered to in conjunction with the notes created. Policies and procedures will formulate to allow the company to maintain compliance but may impact the current business operations (F. Phillips, 2006).. Accounting Policies and Standards Changing Two additional areas that concern management are accounting policies and FASB standards changing. Accounting policies dictate that “properties to be disposed of are reported at the lower of their carrying amount or fair value, reduced for estimated disposal costs, and are included in other current assets” (F. Phillips, 2006). The Landry’s acquisitions increased the properties to approximately 300, but as the disposal of the properties occurs the loss will be significant. FASB updates standards regularly to adapt to changes in the different industries. Landry’s management does not see any material impact from changes in the accounting standards. Two recent pronouncements to consider are FIN 46 and SFAS No. 144. FIN46, “Consolidations of Variable Interest Entities” discusses the financial reporting of
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