Question

1. Why are the notes to the financial statements an integral part of the financial statements? Provide an example of what might be in the notes.

2. What is included in the summary of significant accounting policies disclosure? Provide an example of what might be included.

3. How does the role of the FASB differ from that of the Securities and Exchange Commission with regard to the establishment of accounting standards?

Answer 1

(1) The Summary of Significant Accounting Policies

* Nature of operations

* Basis of Preparation

* Use of estimates

* Cist of products sold

* Selling, General and Administrative

* Revenue Recognition

* Other non- operating income, NEt

* Currency translation

* Cash flow presentation

* Cash equivalents

* Investments

* Inventory valuation

* Property, plant & equipment

* Good and other Intangible assets

* Fair values of financial statements

* Stock based compensation

* Stock split

* New pronucements

(2) Segments for which P&G reported segmented information are:-

. Fabric and home care

.Beauty care

. Baby and Family care

.Health care

.Snacks and beverages

Beauty care is the largest segment

Company’s largest customer is Wal Mart Inc

(3) The Interim information reported by P&G are quarterly results which includes net sales, operating income, net earnings and diluted net earnings per common share