chap002FinancialReportingandAnalysis〔财务报表分析-台湾中兴大学〕.pptVIP

Financial Reporting and Analysis Financial Reporting Environment Earnings Announcements ? Key summary measures (pre-audit) ? Often one to six week lag ? Informative to market ? Lacks supporting financial details Environmental Factors Environmental Factors Environmental Factors Environmental Factors Environmental Factors Environmental Factors Environmental Factors Environmental Factors Environmental Factors Environmental Factors Financial Accounting Stewardship Safeguard assets Increase equity value Protect creditors ?Accountability Performance Measurement Information Perspective Amount …of Timing prospective Uncertainty net cash inflows ?Predictability Decision Usefulness Financial Accounting Financial Accounting Double Entry - duality from accounting equation, A=L+E Historical Cost - fair objective values from arm’s-length transactions Accrual Accounting - recognize revenues when earned, expenses when incurred Full Disclosure - measure and/or disclose material events and transactions Materiality - threshold when information impacts decision making Conservatism - reporting or disclosing the least optimistic information about uncertain events and transactions Financial Accounting Financial Accounting Timeliness - periodic disclosure, not real-time basis Frequency - quarterly and annually Forward Looking - limited prospective information Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Accruals--The Cornerstone Myth: Since company value depends on future cash flows, only current cash flows are relevant for valuation. Myth: Company value equals discounted future cash flows. Myth: All cash flows are value relevant. Myth: All accruals accounting adjustments are value irrelevant. Myth: Cash flows cannot be manipulated. Myth: All income is manipulate