ACC 113 Lecture Notes - Lecture 17: Tunxis Community College, Retained Earnings, Financial Statement
6 Jan 2021
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Document Summary
Earning targets: a company"s own projected earnings for the current fiscal period and financial analysts" independent projections. These put managers under pressure to achieve these expectations. Stock markets can react violently to missed targets especially when the company. Faced with the pressure management can make small adjustments such as: misses it"s own targets: changes in measurement, adjustments to reserves. Measurement is a significant issue for those f/s elements measured at fair value. Their can be conflict in the qualitative criteria if the valuation for basis is weak. If management chooses the fair value method for qualifying land and buildings it requires revaluation annually, management could use appraisals which suit their own specific needs instead of maintaining objectivity. Small variations is estimate can have a large impact. Reserves: in ifrs, voluntary (appropriation) or involuntary (restriction) segregation of the company"s earnings into a separate line item within the retained earnings.
