Is a company required to disclose related party transactions?
Yes, absolutely. If a company has a related party transaction, then the company is required to disclose the nature of the relationship in the financial statements. Other additional disclosures that are required include concentration of credit risk and contingencies.
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What can financial statements tell readers?
Financial statements can be used for just about anything the reader wants them to be used for! Financial statements can tell the reader about the economic resources owned by the company, the solvency and liquidity, as well as their ability to obtain financing. Financial statements also provide a high-level of the operations of the business. […]
What must be included in a full set of financial statements under US GAAP?
Under U.S. GAAP, financial statements that are issued with the Security & Exchange Commission (SEC) must include an income statement, balance sheet, cash flow, statement of changes in owner’s equity, and statement of comprehensive income. The SEC issued regulation S-X and regulation S-K. These regulations govern what financial and non-financial information is required to be […]