A CONCEPTUAL FRAMEWORK FOR FINANCIAL ACCOUNTING AND REPORTING by RICHARD MACVE

Author:RICHARD MACVE
Language: eng
Format: epub
Publisher: Routledge

b)

the ability to obtain additional financing

c)

the amount of non-operating assets

d)

the ability to increase short-term funds flow by modifying operating and investing activities, including the ability to discontinue operations or sell operating assets (para.270).

A number of possibilities for giving information that would assist in assessing financial flexibility (and variations in it during the year) are suggested for comment, including information about borrowing facilities (and maximum and average borrowings outstanding during the year), credit ratings, and the separability and market values of assets; segregation of discretionary and non-discretionary expenses; and management comment and discussion of policy and plans.

Finally, some special matters relating to banks and insurance companies are considered.

REFERENCES—APPENDIX I

1. M. Moonitz, Obtaining Agreement on Standards in the Accounting Profession, op.cit.

2. See the reference to SEC requirements in FASB documents:

FAS33, ‘Financial Reporting and Changing Prices’, September, 1979.

Invitation to Comment on ‘Disclosures about Oil and Gas Producing Activities’, May 13, 1981.

Discussion Memorandum on ‘Reporting Funds Flows, Liquidity and Financial Flexibility’, December 15, 1980, chapter 10.

3. See for example A.J. Briloff, More Debits than Credits, New York: Harper & Row, 1976; The Truth about Corporate Accounting, New York: Harper & Row, 1980.

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