Analyzing Company Disclosures
Apart from the financial statements, the foot notes in the annual reports disclose a great deal of information about the accounting policies and transactions. Many disclosures related to significant policies are also made under the section ‘Management Discussion and Analysis’.
The footnotes of a US GAAP or IFRS reporting company will discuss many important things such as its inventory accounting methods, accounting for long-lived assets, tax treatment, and its accounting treatment of leases.
If there is any change in an accounting standard or if the comoany is adopting a new standard the management will also discuss the impact of this change on the financial statements.
The analyst should carefully read these disclosures and use this information in their financial analysis.
- Objective of Financial Reporting Standards
- Financial Reporting Standard-setting Bodies and Regulatory Authorities
- SEC Filings: Forms Providing Key Information for Analysts
- Global Convergence of Accounting Standards
- IASB Conceptual Framework for Financial Reporting
- Conceptual Framework - Recognition of Elements of Financial Statements
- Differences in IFRS and US GAAP Frameworks
- Characteristics of an Effective Financial Reporting Framework and the Barriers
- Monitoring Developments in Financial Reporting Standards
- Analyzing Company Disclosures
- Financial Reporting Standards - Video