FIN 360 Chapter Notes - Chapter 1: International Accounting Standards Board, Financial Statement, Form 10-Q
Document Summary
Financial statements help us understand these business activities. A company"s strategic (or business) plan reflects how it plans to achieve its goals and objectives. Demand for financial statements has existed for centuries as a means to facilitate efficient contracting and risk-sharing. Decision makers and other stakeholders demand information on a company"s past and prospective returns and risks. Supply of financial statements is driven by companies that wish to lower their costs of financing and less obvious costs such as political, contracting, and labor. Both regulation and bargaining power affect disclosure costs and benefits and thus play roles in determining the supply of accounting information. Reports resources (assets): inventories goods that the company intends to sell to its customers (converted to cash) short-term asset, property, plant and equipment company"s office building or manufacturing facilities, Two ways a company can finance its assets: owner financing raise money from shareholders, non-owner financing raise money from banks or other creditors and suppliers.