ACCT 2240 Lecture Notes - Lecture 6: Financial Statement, Accounts Receivable
12 Dec 2015
School
Department
Course
Professor
Document Summary
Explain how qualitative characteristics apply in each of the following situations: A company acquires land in exchange for shares, but the shares are lightly traded and cannot be easily valued. The company proposes to use its own internal expert"s appraisal for the land. A significant economic downturn occurs just as a company is preparing to issue its financial statements, three months after year-end. Because of the downturn, the collectability of its quite substantial accounts receivable is in doubt. The company"s cfo proposes that the company delay the issuance of the financial statements for another two or three months, until the collectability of accounts becomes clearer. The ceo of a major biotechnology company wishes to show the company"s important internally generated assets on the balance sheet. She is concerned that the financial statement users are deprived of relevant information when they assess the earnings potential of the firm.
