Financial statement presentation and disclosures Essay

Financial statement presentation and disclosures - seek ExampleThe financial deals and agreements go issue have a positive material effect on the follow. They will be not presented in the symmetricalness sheet because they do not affect the borrowing efficacy and these activities hide a certain amount of liability. Variable- bet Entities It is a concept which is introduced in the US Financial accountancy Standards in FIN 46 which refers to the entity (investee) in which the investors holds a certain amount of controlling interests which is not base on majority of the voting rights. It is almost synonymous to the concept of the special purpose entity. It is subject to the desegregation of certain financial conditions related to the variable interests. It is the primary beneficiary of the 7E which is defined as the person with a company with a majority of variable interest (Madura, 2007). Non controlling Interest Non controlling interest refers to the willpower stake in a cor poration in which the required position gives the investor the chance to understand the air the company operates. Majority of the positions held by the investors are deemed to be non controlling interests because their ownership stake is very oft insignificant relative to the total outstanding shares. Disclosure Off balance sheet transactions, Variable-Interest Entities, and Non controlling Interest Off balance sheet transactions The Company engages in varied financial transactions which should be with the US GAAP principles that are not recorded in the company financial statements. These financial transactions involve the varying degrees, credit, interest rate, elements of credit and liquidity find. These transactions are used to manage the bespeak of customers in the form of funding, letters of credit and loan commitments. Firstly, to know what are the elements in the off balance sheet transactions, critically analyze them and their administrations. Secondly, to assess the likelihood of the occurrences of an unknown trend, commitment, demand and any event or uncertainty that could affect the off balance sheet arrangement and thirdly, the assessment would be required to resolve about the management trend. This would help in assessment of the uncertainty of the variables and would also help in arrangement of the off balance sheet elements and variables. The following items are necessary for the disclosure of certain items like The character and the business purpose if the companys off balance sheet arrangement for the variables (Groppelli & Nikbakht, 2006). The importance of the companys off balance sheet arrangement of the variables with respect to the liquidity, capital resources, credit risk, market risk and the support of some benefits (Hall, 2007). The amount and nature of the interests retained, issues securities other form of indebtedness that is incurred by the company in connection with the arrangements The amount and nature of any amount of o bligation or liabilities of the company that arise out of the arrangements that are likely to become material Any known event, demand , uncertainty that will sequel in the termination of or reduction of material benefits that the company has proposed Variable-Interest Entities The variable entity model does not prevail because the enterprise is being evaluated or consolidated for the traditional operating entity. As per the Accounting Standards Codifications