Accounting Standards: The financial statements of a business must confirm the generally accepted accounting principles (GAAP). This term refers to various methods, rules, practices and procedures developed over the times based on need for regulating the preparation of financial statements, these principles have been developed in response to changes in the business environment. The process of developing is jointly carried out by various groups such as Financial Accounting Standards Board. American Institute of Certified Public Accountants, Certified Public Accountants, and Securities and Exchange Commission.
The accounting information and their need for given users using provided information.
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Chapter 1 Solutions
Financial Accounting: The Impact on Decision Makers
- Evaluate the company’s latest annual financial statements (balance sheet, income statement, and cash flow statement) and comment on the company's financial performance and position. In your response, use the requirements of IAS 1 as a guide.b) Identify and discuss key accounting principles and standards applied in the company’s financial reporting process indicating their reasons for choosing these and how they were applied. Comment briefly on the appropriateness of the choices made given the company’s industry, location and type (e.g. MNC, regional conglomerate, etc.)c) Critically analyze any significant accounting policies and estimates disclosed in the notes to the financial statements. In your answer, indicate whether the company complied with the accounting standards and conventions.arrow_forwardObtain the most recent annual reports for the company BP plc and British American Tobacco p.l.c . Examine the segmental disclosures provided in the segment notes of the annual reports of the two companies and comment on the following: i. Based on extracts from the segment notes, · how much and what segmental information is provided in the segment notes? · discuss whether the companies are in compliance with the relevant accounting standard, and · discuss the similarities and differences between their disclosure practices. ii. Comment on whether the information is useful and sufficient to allow shareholders to make informed investment decisions. iii. Discuss the implications of your analysis and findings, such as policy implications.arrow_forwardWhat is the purpose of Regulation S–K? Choose the correct.a. Defines generally accepted accounting principles in the United States.b. Establishes required disclosure of nonfinancial information with the SEC.c. Establishes required financial disclosures with the SEC.d. Indicates which companies must file with the SEC on an annual basis.arrow_forward
- Financial statements and reports What happened to assets, earnings, dividends, and cash flows during the financial year? Accounting practice in the United States follows the generally accepted accounting principles (GAAP) developed by the Financial Accounting Standards Board (FASB), which is a nongovernmental, professional standards body that monitors accounting practices and evaluates controversial issues. The Securities and Exchange Commission (SEC) requires all publicly traded companies to periodically report their financial information. A publicly held corporation must publish an annual report that contains the balance sheet, income statement, statement of cash flows, statement of stockholders’ equity, and other financial information for analysis. The following table lists descriptions of the major financial statements and reports that a firm publishes. Identify the correct statement or report for each description. Description Statement or Report Explains the…arrow_forwardWhat is the purpose of Regulation S–K?a. Defines generally accepted accounting principles in the United States.b. Establishes required disclosure of nonfinancial information with the SEC.c. Establishes required financial disclosures with the SEC.d. Indicates which companies must file with the SEC on an annual basis.arrow_forwardFor a publicly owned company, indicate which of the fol-lowing accounting activities are likely to occur at or shortly after year-end. (More than one answer may be correct.)a. Preparation of income tax returns.b. Adjusting and closing of the accounts.c. Drafting of disclosures that accompany the fi nancialstatements.d. An audit of the fi nancial statements by an independentCPA fi rm.arrow_forward
- Management Discussion and Analysis is required in annual reports filed with the Securities and Exchange Commission. It includes management's analysis of current operations and its plans for the future. Typical items included in the MD&A are as follows: Management's analysis and explanations of any significant changes between the current and prior years' financial statements.Important accounting principles or policies that could affect interpretation of the financial statements, including the effect of changes in accounting principles or the adoption of new accounting principles.Management's assessment of the company's liquidity and the availability of capital to the company.Significant risk exposures that might affect the company.Any “off-balance-sheet” arrangements such as leases not included directly in the financial statements. Such arrangements are discussed in advanced accounting courses and textbooks.Using Google, enter Kroger Annual Report in the search field. Access the…arrow_forwardVarious types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business enterprise.Identify the type of change that is described in each item above and indicate whether the prior year’s financial statements should be recast when presented in comparative form with the current year’s financial statements. 1. A change from the completed-contract method to the percentage-of-completion method of accounting for long-term construction-type contracts. 2. A change in the estimated useful life of previously recorded fixed assets as a result of newly acquired information.…arrow_forwardhttps://www.republictt.com/pdfs/annual-reports/RFHL-Annual-Report-2022.pdf Financial Reporting Analysis: Use Republic Financial Holdings Limited Annual Report 2022 to answer the Questions. a) Evaluate the company’s latest annual financial statements (balance sheet, income statement, and cash flow statement) and comment on the company's financial performance and position. In your response, use the requirements of IAS 1 as a guide. b) Identify and discuss key accounting principles and standards applied in the company’s financial reporting process indicating their reasons for choosing these and how they were applied. Comment briefly on the appropriateness of the choices made given the company’s industry, location and type (e.g. MNC, regional conglomerate, etc.) c) Critically analyze any significant accounting policies and estimates disclosed in the notes to the financial statements. In your answer, indicate whether the company complied with the accounting standards and…arrow_forward
- Which of the following standards set the required disclosures forconsolidated financial statements? a. IFRS 3 – Business Combinationb. IFRS 10 – Consolidated Financial Statementsc. IFRS 12 – Disclosure of Interest in Other Entitiesd. IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errorsarrow_forwardTitle Use the information for Sorpon Corporation in E18-6, and assume that the company reports accounting. Description Use the information for Sorpon Corporation in E18-6, and assume that the company reports accounting income of $180,000 in each of 2012 and 2013, and no reversing differences other than the one identified in E18-6. In addition, assume now that Sorpon Corporation was informed on December 31, 2012, that the enacted rate for 2013 and subsequent years is 35%. In BE Sorpon Corporation purchased equipment very late in 2011. Based on generous capital cost allowance rates provided in the Income Tax Act, Sorpon Corporation claimed CCA on its 2011 tax return but did not record any depreciation as the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amounts of $25,000 in 2012, $30,000 in 2013, and $40,000 in 2014. Sorpon s accounting income for 2011 is $200,000 and the tax rate is 40% for all years. There are no future tax…arrow_forward_______ accounting standards require companies to group items within OCI based on __________: U.S. GAAP; whether they will be reclassified subsequently into net income or whether they will be subsequently reclassified into income when specific conditions are met. IFRS; whether they will be reclassified subsequently into net income or whether they will be subsequently reclassified into income when specific conditions are met. U.S. GAAP; their expected future categorization on the income statement into income from continuing operations and discontinued operations. IFRS; their expected future categorization on the income statement into income from continuing operations and discontinued operations.arrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning