Term
| Why is financial info needed? |
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Definition
| Demand for financial info |
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Term
| Why financial disclosure required? |
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Definition
| The supply of financial info |
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Term
| Problems w/Info asymmeterry |
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Definition
-entrepreneurs have > info regarding value of business
- entrepreneurs communications w/investors not completely credible bc incentive to inflate value of ideas |
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Term
| How to reduce Info Asymmetry |
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Definition
- increase disclosure
- increase credibility of the disclosure |
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Term
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Definition
- snapshot of resources, claims on firm as of a specific date
- usually last day of fiscal q/fiscal year
- resources from 2 perspectives: 1)specific resources firm holds
2) claims on firm by persons/entities |
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Term
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Definition
-measures and reports financial results of a firm's performance for a period of time ie quarter or year
- |
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Term
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Definition
| inflows of assets and the settlements of obligations from selling goods/providing services |
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Term
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Definition
| outflow of assets that a company consumes and obligations it incures in the proces of operating business to generate revenues |
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Term
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Definition
-bottom-line profit (loss) for a period
NI= Rev- Exp+Gains-Losses |
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Term
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Definition
- reports for a period of time the net cash flows (inflows-outflows)
- operating, investing, and financing activities
- how firm is generating/using cash
-complements I/S-- differ from accrual based income |
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Term
| Statement of Shareholder's Equity |
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Definition
-info about common shareholders' equity calims on the company and changes during the period
- includes investments/distributionsn to owners
- NI
- other comprehensive income items
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Term
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Definition
| -amounts initially contributed by shareholders for an interest in a company, ie common stock, additional paid in capital, and other additional paid in capital |
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Term
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Definition
-cumulative NI in excess of divideds declared, ie retained earnings
- shareholder's equity effects from the recognition/valuation of certain assets/liabilites whether acc. or comprehensive income |
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Term
| Management Discussion and Analysis |
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Definition
-extensive narrative discussion and quantitative analysis
-provides insight into:
a) strategies
b) management's evaluation of company's performance
c) business risk factors
d) expectations about the future |
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Term
| Managers'/Independent Auditors Attestations |
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Definition
- imposed by SOX
-management responsible for f/s and underlying accounting/control system
- independent auditors responsible for assessingn company's internal control system etc |
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Term
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Definition
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Term
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Definition
| extensive annual report, incl f/s |
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Term
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Definition
| extensive quarterly report incl f/s |
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Term
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Definition
| extensive annual report incl f/s from Non US companies |
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Term
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Definition
| significant events that affect company |
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Term
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Definition
| report used when management requests the right to vote through proxies for shareholders at shareholders' meetings |
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Term
| Supply of Financial Acc. Info determined by? |
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Definition
1. authoritative accounting standards ie GAAP/IFRS
2. choices, methods, estimates, and judgements made
3. auditing conducted by esternal auditors |
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Term
| Qualitative Characteristics |
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Definition
- relevance
-faithful representation
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Term
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Definition
Information that is capable of making a difference in decisions made by F/S users
- predictive value
- confirmatory value
-materiality
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Term
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Definition
When words and numbers accurately predict economic substance
- complete
- neutral
- free from error |
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