CHAPTER 24

PRESENTATION & DISCLOSURE

IN FINANCIAL REPORTING
FULL DISCLOSURE PRINCIPLE
Full disclosure principle call any financial facts
significant enough to influence the judgment of an
informed reader.  expanded disclosure 
- the costs may be certain but the benefits of
disclosure not as apparent
- the costs can be substantial in some cases and the
benefits difficult to assess
- information overloaded

Increase in Reporting Requirements

Reasons:
- Complexity of the business environment
- Necessity for timely information more complete
interim data
- Accounting as a control and monitoring device

Differential Disclosure
IFRS SMEs (ETAP) less complex than full IFRS:
 Topics not relevant for SMEs are omitted. (EPS,
interim financial reporting, segment reporting)
 Simplified IFRS for SMEs allows fewer
accounting policy choices. (no option to
revaluate PPE & intangible asset, no corridor
approach for actuaria; gains and losses)
 Many principle for recognizing and measuring
assets, liabilities, revenue, and expenses are
simplified. (goodwill is amortized, all borrowing
and R&D costs are expensed)
 Significantly fewer disclosures are required
(roughly 300 versus 3.000)
 To further reduce standard overload, revisions
to the IFRS for SMEs will be limited to once
every three years.

NOTES TO FINANCIAL STATEMENTS

Notes are an integral part of the financial
statements of a business enterprise.
 Notes are means of amplifying or explaining the
items presented in the main body of the
statements
  Can explain in qualitative term information
pertinent to specific financial statement items.
 Can provide supplementary data
 Can explain restrictions imposed by financial
arrangement or basic contractual agreement.

Accounting Policies
Accounting policies are the specific principles,
bases, conventions, rules, and practices applied
by a company in preparing and presenting
financial statements.
A statement identifying the accounting policies
adopted and followed by the reporting entity is
an integral part of the financial statements 
answers such questions:
 What method depreciation is used?
 What valuation method is employed?
 What amortization policy is followed?
 Etc.
Common Notes
DISCLOSURE ISSUES
CURRENT REPORTING ISSUES