RSM320H1 Chapter Notes - Chapter 23: Financial Statement Analysis, Financial Statement, Income Statement

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3 Dec 2017
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Information disclosure is an important part of capital markets: Financial statements are only one source of information for investors: other sources include: New releases: users must use caution because not all disclosure is good disclosure. The full disclosure principle calls for financial reporting of significant facts affecting the judgment of an informed reader. The problems of implementing this principle are costs of disclosure or information overload. Materiality also applies to note disclosures-obscuring material information with immaterial information makes it less understandable. Over the past several decades, disclosures for public companies have significantly increased. The accounting policies of the entity must be disclosed as the first note or in a separate (cid:862) u(cid:373)(cid:373)a(cid:396)(cid:455) of ig(cid:374)ifi(cid:272)a(cid:374)t a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g poli(cid:272)ies(cid:863) se(cid:272)tio(cid:374) p(cid:396)e(cid:272)edi(cid:374)g the (cid:374)otes. Illegal acts are defined as (cid:862)a (cid:448)iolatio(cid:374) of a do(cid:373)esti(cid:272) o(cid:396) fo(cid:396)eig(cid:374) statuto(cid:396)(cid:455) la(cid:449) o(cid:396) go(cid:448)e(cid:396)(cid:374)(cid:373)e(cid:374)t (cid:396)egulatio(cid:374) att(cid:396)i(cid:271)uta(cid:271)le to the e(cid:374)tit(cid:455) o(cid:396) to (cid:373)a(cid:374)age(cid:373)e(cid:374)t o(cid:396) e(cid:373)plo(cid:455)ees a(cid:272)ti(cid:374)g o(cid:374) the e(cid:374)tit(cid:455)"s (cid:271)ehalf. (cid:863)

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