PORTABLE MBA IN FINANCE AND ACCOUNTING CHAPTER 2

2 ANALYZING BUSINESS EARNINGS. Eugene E. Comiskey Charles W. Mulford. A special committee of the American Institute of Certified Public Accountants (AICPA) concluded the following about earnings and the needs of those who use financial statements: Users want information about the portion of a company’s reported earnings that is stable or recurring and that provides a basis for estimating sustainable earnings. | ANALYZING 2 BUSINESS EARNINGS Eugene E. Comiskey Charles W. Mulford A special committee of the American Institute of Certified Public Accountants AICPA concluded the following about earnings and the needs of those who use financial statements Users want information about the portion of a company s reported earnings that is stable or recurring and that provides a basis for estimating sustainable While users may want information about the stable or recurring portion of a company s earnings firms are under no obligation to provide this earnings series. However generally accepted accounting principles GAAPs require separate disclosure of selected nonrecurring revenues gains expenses and losses on the face of the income statement or in notes to the financial statements. Further the Securities and Exchange Commission SEC requires the disclosure of material nonrecurring items. The prominence given the demand by users for information on nonrecurring items in the above AICPA report is no doubt driven in part by the explosive growth in nonrecurring items over the past decade. The acceleration of change together with a passion for downsizing rightsizing and reengineering have fueled this growth. The Financial Accounting Standards Board s FASB issuance of a number of new accounting statements that require recognition of previously unrecorded expenses and more timely recognition of declines in asset values has also contributed to the increase in nonrecurring items. A limited number of firms do provide on a voluntary basis schedules that show their results with nonrecurring items removed. Mason Dixon Bancshares 35 36 Understanding the Numbers provides one such example. Exhibit shows a Mason Dixon schedule that adjusts reported net income to a revised earnings measure from which nonrecurring revenues gains expenses and losses have been removed. This is the type of information that the previously quoted statement of the AICPA s Special Committee calls for. Notice .

Không thể tạo bản xem trước, hãy bấm tải xuống
TÀI LIỆU MỚI ĐĂNG
Đã phát hiện trình chặn quảng cáo AdBlock
Trang web này phụ thuộc vào doanh thu từ số lần hiển thị quảng cáo để tồn tại. Vui lòng tắt trình chặn quảng cáo của bạn hoặc tạm dừng tính năng chặn quảng cáo cho trang web này.