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The main components of an annual report for a listed company include financial highlights, governance and ownership structure, discussion and analysis of economic events, financial statements, balance sheets, income statements, cash flow statements, footnotes, auditors' reports, and management responsibility statements.

The OIC sets accounting principles and standards for small national businesses in Italy.

The notes provide important context for the numbers in the financial statements and are based on institutional frameworks.

<p>IASB (International Accounting Standards Board) sets international accounting standards (IFRS) to ensure comparability across companies.</p> Signup and view all the answers

<p>The auditor's report is a compliance report issued by independent auditors who verify a company's financial records.</p> Signup and view all the answers

<p>The cash flow statement helps investors assess a company's ability to pay debts, generate cash, and use cash efficiently.</p> Signup and view all the answers

<p>Cash flows are classified into operations, investing, and financing activities.</p> Signup and view all the answers

<p>Cash flow from operations should ideally be positive and is related to the core business.</p> Signup and view all the answers

<p>Cash flow from investing is expected to be negative as it involves acquiring long-lived assets.</p> Signup and view all the answers

<p>Asset evaluation principles distinguish between monetary and non-monetary assets, with different valuation rules for each.</p> Signup and view all the answers

<p>The allowance method estimates the amount of uncollectible accounts to be matched to related revenues, based on historical experience.</p> Signup and view all the answers

<p>Inventory is measured at the lower of cost and net realizable value, with costs including purchase, conversion, and bringing inventories to their present condition.</p> Signup and view all the answers

<p>The cost of inventories is assigned by specific identification or first-in, first-out/weighted average cost formula for interchangeable items.</p> Signup and view all the answers

<p>Acquired fixed assets should be recorded at their actual cost, which includes purchase price, applicable taxes, commissions, legal fees, and installation costs.</p> Signup and view all the answers

<p>Write-down of inventories to net realizable value and all losses are recognized as an expense in the period the write-down or loss occurs.</p> Signup and view all the answers

<p>The purpose of an annual report is to report on a company's activities throughout the past year, providing information about the company's financial performance and activities to shareholders and other interested parties.</p> Signup and view all the answers

<p>The typical length of an annual report can be up to 600 pages or more, and it varies depending on the complexity of the company. More complex companies tend to have longer annual reports.</p> Signup and view all the answers

<p>Listed companies are required to publish an annual report, while family-owned businesses may not have the same obligation.</p> Signup and view all the answers

<p>An annual report is intended to provide shareholders and other interested parties with information about the company's activities and financial performance.</p> Signup and view all the answers

<p>Most jurisdictions require companies to prepare and disclose annual reports, and many also require the annual report to be filed at the company's registry.</p> Signup and view all the answers

<p>Liquidity in a company refers to its ability to meet long-term obligations with pure cash, not assets. It is linked to profitability through the accrual principle, which recognizes revenues when goods or services are delivered, regardless of when cash flows occur.</p> Signup and view all the answers

<p>Investors use the balance sheet to assess a firm's financial obligations, investments, debt, and assets. It is typically organized into two sections, except in the UK where it's organized into one.</p> Signup and view all the answers

<p>Assets and liabilities are classified based on liquidity and activity-related criteria, with the former categorizing assets and liabilities into short-term (current) and long-term (non-current).</p> Signup and view all the answers

<p>The income statement is used by investors to examine sales, expenses, the economic result compared to competitors, and the company's operating income. Its typical presentation includes multiple steps, with the first step calculating the gross profit as the difference between revenues and cost of goods sold.</p> Signup and view all the answers

<p>The intermediate steps include calculating the gross profit, contribution margin, and operating profit. They are important for describing how profit is generated and include the impact of advertising and promotional costs on the company's earnings from core operations.</p> Signup and view all the answers

<p>The different methods are: 1. Straight-line method 2. Units-of-production method 3. Declining balance method (accelerated depreciation)</p> Signup and view all the answers

<p>Intangibles are amortized using the straight-line method.</p> Signup and view all the answers

<p>Non-monetary and monetary assets have different evaluation criteria: cost-based and fair value-based.</p> Signup and view all the answers

<p>Accounts receivables are valued at their net realizable value.</p> Signup and view all the answers

<p>Inventories are evaluated at the lower of cost (FIFO, LIFO, weighted average, specific identification) or market price.</p> Signup and view all the answers

<p>Listed companies</p> Signup and view all the answers

<p>Up to 600 pages, varies based on the complexity of the company</p> Signup and view all the answers

<p>Most jurisdictions require companies to prepare and disclose annual reports</p> Signup and view all the answers

<p>Information about the company's activities and financial performance</p> Signup and view all the answers

<p>The ease of converting to cash in monetary assets and the absence of this ease in non-monetary assets</p> Signup and view all the answers

<p>Using the straight-line method</p> Signup and view all the answers

<p>Historical cost minus the residual value</p> Signup and view all the answers

<p>At their depreciated cost</p> Signup and view all the answers

<p>Straight-line method</p> Signup and view all the answers

<p>At their net realizable value</p> Signup and view all the answers

<p>Company's ability to pay debts, generate cash, and use cash efficiently</p> Signup and view all the answers

<p>Acquiring long-lived assets</p> Signup and view all the answers

<p>Interest expenses and other financing costs</p> Signup and view all the answers

<p>IFRS</p> Signup and view all the answers

<p>Positive cash flow related to the core business</p> Signup and view all the answers

<p>To record revenues when goods or services are delivered, regardless of when cash flows occur</p> Signup and view all the answers

<p>Based on liquidity and activity-related criteria</p> Signup and view all the answers

<p>Multiple steps, including gross profit, contribution margin, and operating profit</p> Signup and view all the answers

<p>To assess a firm's financial obligations, investments, debt, and assets</p> Signup and view all the answers

<p>They describe how profit is generated and provide insights into different components of income</p> Signup and view all the answers

<p>Income statement, balance sheet, statement of cash flows</p> Signup and view all the answers

<p>IASB (International Accounting Standards Board)</p> Signup and view all the answers

<p>It is a compliance report issued by independent auditors who verify a company's financial records</p> Signup and view all the answers

<p>Important context for the numbers in the financial statements</p> Signup and view all the answers

<p>Assets, liabilities, and owner's equity</p> Signup and view all the answers

<p>To estimate the amount of uncollectible accounts to be matched to related revenues, based on historical experience</p> Signup and view all the answers

<p>At the lower of cost and net realizable value, including purchase, conversion, and bringing inventories to their present condition</p> Signup and view all the answers

<p>At their actual cost, including purchase price, applicable taxes, commissions, legal fees, and installation costs</p> Signup and view all the answers

<p>Depreciation</p> Signup and view all the answers

<p>In the period the write-down or loss occurs</p> Signup and view all the answers