The Statement Of Financial Statements - 3386 Words

FIN 48 Summary At the beginning of November in 2007, the Statement of Financial Statements (SFAS) board decided to postpone the enactment of FIN 48 financial reporting and accounting and income taxes until later that year on December 15, 2007. The purpose of FIN 48 is to force public companies to analyze company’s tax positions and evaluate the probability that their tax position will require them to be audited and if they are audited will their records be sufficient and accurate. If an organization finds that their tax position is likely to not be sustained a liability is created and the tax benefit of their position decreases. Some tax positions that organizations should think about include the choice not to file a return in a certain location, a shift of revenue between tax jurisdictions, the characterization of revenue or a choice to not include reporting taxable income in tax documents. Additionally, a choice to classify a transaction, organization, or other position in a tax return as tax exempt, extra compensation in a C-Corporation, international transfer pricing, Inventory capitalization, and unrelated business income (Feeley Driscoll, P.C, 2008) Summary This description of an organizations tax position as a result of FIN 48 is a process that involves two steps, one being recognition and two being measurement. In step one the organization determines how likely it is that their stated tax position will be maintained after being audited. This includesShow MoreRelatedFinancial Statement And Financial Statements942 Words   |  4 Pagescompany’s financial statements contain the true fiscal pulse of the company. If ever there is a need to check the health of a company to see how strong or weak it is fiscally, the financial statements hold the answers. These statements allow shareholders, lenders, and investors the opportunity to assess a number of things about the company such as how it can grow it’s customer base, where it falls short at any particular time, and even how well the company is doing amongst it’s peers. Financial statementsRead MoreFinancial Statement Of Financial Statements822 Words   |  4 PagesFi nancial Statements The business world requires exacting standards to ensure all costs are correctly accounted for and considered. To this end the financial statements have become the centerpiece for business evaluation. The income statement, balance sheet, statement of cash flow and ratios for analysis of financial statements play a critical role in business evaluation. Income Statement The income statement is a mainstay of business operations and expenses. 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It’s also important to recognize the Auditor’s opinion letter, balance sheet, operating statement, statement of changes in net assets, and statement of cash flows and footnotes of their involvement in the process. Relevant accounting articlesRead MoreFinancial Statements And Financial Statement789 Words   |  4 Pageslook at financial statements. Financial statements help companies keep track of their financial performance during a specific period of time. Financial statements are composed of income statement, balance sheet, and a statement of cash flows. This paper will explore these three forms as well as the types of accounts that make up owners’ equity. Financial Statements Financial statements are integral reports for companies. The reports included in financial statements documentRead MoreFinancial Statement : Financial Statements1702 Words   |  7 Pages1- Financial statements Summary report that shows how a firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and what is its current financial position. The three basic financial statements are the (1) balance sheet, which shows firm s assets, liabilities, and net worth on a stated date; (2) income statement (also called profit loss account), which shows how the net income of the firm is arrived at over a stated period, and (3) cash flow statement, which showsRead MoreFinancial Statements Of Financial Statement Fraud1304 Words   |  6 Pages Financial Statement Fraud Financial statement fraud is any intentional or grossly negligent violation of generally accounting principles (GAAP) that is undisclosed and materially effects any financial statement. Fraud can take many forms, including hiding both bad and god news. Research shows that financial statement fraud us relatively more likely to occur in companies with assets of less than $100 million, with earnings problems, and with loose governance structures (Hopwood, Leiner, YoungRead MoreFinancial Statement Analysis And Financial Statements1704 Words   |  7 Pagesinformation to those that need it (Siam, Rashid, 2010). Financial statements analysis is very important to various users because it helps to express the overall financial health of the organization (Gibson, 2013). Managers use the financial statements to measure the profitability of a company, manage day to day activities and make important decisions about pricing, production that will benefit the organization (Gibson, 2013). Financi al statements are also used to form contracts between organizationsRead MoreFinancial Statements And Financial Statement Analysis Essay3026 Words   |  13 PagesLITERATURE REVIEW INTRODUCTION Financial statements are usually means of communicating information on a company’s operations. They contain information on the revenues, expenses, assets, liabilities and retained earnings of the business. 2.2 FINANCIAL STATEMENT ANALYSIS According to Drake (2010), financial statement analysis is the selection, evaluation, and interpretation of financial data, along with other pertinent information, to assist in investment and financial decision-making. Moreover, itRead MoreFinancial Statements And Corporate Statements887 Words   |  4 PagesFinancial Statements Financial statements are a means of outlining financial activities for a specified business or any other entity. That information is presented in a specified order and represents all activities for that business in a specified accounting period. There are several types of financial statements and these statements tell investors specific information about a company and how it operates. Income statement, balance sheet, owner’s equity section, and a statement of cash flow are very