BUSS1030 Lecture Notes - Lecture 7: Regional Policy Of The European Union, Financial Statement, Earnings Before Interest And Taxes
31 Jul 2018
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Chapter 3: pages 92-100, 131-142 (ignore stock approach to calculating profit) Enron example of how financial statements can be manipulated. Enron created offshore entities, units used primarily to avoid taxes and to hide operating losses. They also provided the company"s principals and managers with full anonymity that would shield the massive losses. As with many lies, small ones spawned larger ones, which then made it necessary to cover up more. Learning objective 1: explain the nature and purpose of a statement of financial performance (income statement) and its relationship with the statement of financial position. Nature of the income statement: profit (or loss) the difference between the increases in owners" equity (capital) aka income, and the decreases in owners" equity, aka expenses. Format of the statement of financial performance (lo3) Income attributable to owner/s of business added to equity figure in the balance sheet and taking account of non-operating expenses.
