Chapter 2, Problem 10CT

Summary Introduction

Financial Statements:

Financial statements are the accounting reports of any organization that are prepared with a purpose to disclose its past performance and also the assets and liabilities of the company along with the finances. These statements are prepared either on an annual basis or on a quarterly basis.

Management Discussion and Analysis

The Management Discussion and Analysis (MD&A) is a part of the financial statements.

It is a preface in which the management of the company examines and discusses about the important events that might have occurred in the recent quarter or year. The future goals and projects are also discussed as a part of the Management Discussion and Analysis (MD&A).

Notes to the Financial Statements

The public companies are supposed to disclose their yearly financial statements. The financial statements include the balance sheet, the income statement, cash flow statement and the statement to the shareholder’s equity. Apart from these disclosures, the firms provide additional notes in which they provide thorough details about the information that is provided in the statements. These are known as the notes to the financial statements.

To Identify:

The meaning of Management Discussion and Analysis (MD&A) in the financial statements and the notes to the financial statements.