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Balance Sheet

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					Balance Sheet
   Usefulness of Balance Sheet
    – Liquidity
    – Financial flexibility
   Limitations of Balance Sheet
    – Values are not current value
    – Estimates are used
    – Valuable resources and claims are not
      included
Balance Sheet
   Current Assets - cash and other assets
    expected to be converted into cash, sold, or
    consumed within one year or the operating
    cycle, whichever is longer.
    –   Cash
    –   Short term Investments
    –   Accounts Receivable
    –   Receivables
    –   Inventory
    –   Prepaid Expenses
Balance Sheet

 Long-Term Investments
 Property, Plant, & Equipment
 Intangibles
 Other Assets
Balance Sheet
 Current Liabilities - obligations
  reasonably expected to be liquidated
  either through the use of current assets
  or the creation of other current liabilities
 Long-Term Liabilities
 Financial Instruments
Balance Sheet (cont)

   Owners’ Equity
    – Capital stock
    – Additional paid in capital
    – Retained earnings
   Classified Balance Sheet Format
Additional Information
   Contingencies
    – Gain not recorded until contingency is
      resolved
    – Loss recorded if probable and amount can
      be reasonably estimated
      • if reasonably possible, then disclose the
        existence of the contingency
 Valuations & Accounting Policies
 Contracts & Negotiations
Additional Information (cont.)
   Subsequent Events
    – Events that provide additional evidence about
      conditions that existed at the balance sheet date,
      affect the estimates used in preparing financial
      statements, and, therefore, result in needed
      adjustments
    – Events that provide evidence about conditions that
      did not exist at the balance sheet date, but arise
      subsequent to that date and do not require
      adjustment of the financial statements
Additional Information (cont.)

   Techniques of Disclosure
    – Notes
    – Cross reference and contra items
    – Supporting schedules
   Terminology
Statement of Cash Flows
 Purpose
 Content & Format
    – Operating activities
    – Investing activities
    – Financing activities
 Preparation
 Usefulness of the Statement of Cash
  Flows

				
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posted:1/17/2012
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