Towards a More User Friendly Financial Statement Analytical Essay by Nicky
Towards a More User Friendly Financial Statement
Looks at the backward-looking and forward-looking aspects of the financial statement and argues for better forward-looking models.
# 148616
| 2,875 words
| 8 sources
| APA
| 2011
| 
Published
on Oct 28, 2011
in
Business
(Accounting)
, Business
(Finance, Investment and Banking)
, Accounting
(General)
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Description:
This paper explains that the financial statement provides a historical look at a company's performance, assuming that the future will be similar to the past; whereas, the forward-looking statement, with no standard formula, is only a guess. Next, the author discusses the problem of how to account for the modern problem of intellectual property, which affects the relevancy of the accounting statement. The paper stresses the need for new accounting standards to improve the relevancy, transparency and user friendliness of the financial statement, especially to meet the requirements of the changing, non-professional audience.
Table of Contents:
Introduction
The Nature of the Forward-Looking Statement
Ulterior Motives
Historical Information
The Need for Relevancy
Accounting for Intellectual Property
Do We Need New Guidelines?
Conclusion
Table of Contents:
Introduction
The Nature of the Forward-Looking Statement
Ulterior Motives
Historical Information
The Need for Relevancy
Accounting for Intellectual Property
Do We Need New Guidelines?
Conclusion
From the Paper:
"The manager has a motive to make their company appear to be a good investment for the future. However, so many times, shareholders only look at profits now, rather than what the company is stashing away for the future. Saving for the future means having less in the present. Managers must attract investors, therefore, there is a motive to make their company appear to be more profitable than it is in reality. They are not telling untruths, they are just rearranging the numbers so that they will appear to be more attractive to the present investor."Sample of Sources Used:
- Cadwalader, Wickersham, & Tact LLP. 1999. Application of the Safe Harbor for Forward- Looking Statements. Findlaw. Accessed April 23, 2009 <http://library.findlaw.com/1999/Oct/1/131194.html>.
- Giroux, G. (n.d.). American Big Business and Cost Accounting. In A Short History of Accounting and Business. Accessed April 23, 2009 <http://acct.tamu.edu/giroux/history.html>.
- Harris v. Ivax Corporation 182 F.3d 799, 807-08 (11th Cir. 1999). Findlaw. Accessed April 23, 2009 <http://caselaw.lp.findlaw.com/cgi- bin/getcase.pl?court=11th&navby=case&no=984818man>.
- Schweihs, R. 2002. Valuation of Intellectual Property is the focus of the new accounting guidelines. Intellectual Property and Technology Law Journal. May 1, 2002. Accessed April 23, 2009 <http://www.accessmylibrary.com/coms2/summary_0286- 25432670_ITM.>.
- Stoll, J. and Terlep, S. 2009. GM to Offer Two Choice: Bankruptcy or More Aid. February 16, 2009. Wall Street Journal. Accessed April 23, 2009 <http://online.wsj.com/article/SB123458663412987489.html>.
Cite this Analytical Essay:
APA Format
Towards a More User Friendly Financial Statement (2011, October 28)
Retrieved June 07, 2023, from https://www.academon.com/analytical-essay/towards-a-more-user-friendly-financial-statement-148616/
MLA Format
"Towards a More User Friendly Financial Statement" 28 October 2011.
Web. 07 June. 2023. <https://www.academon.com/analytical-essay/towards-a-more-user-friendly-financial-statement-148616/>