GAAP are the set of regulations which are used in the readying of fiscal statements. Every organisation which trades publically must let go of their fiscal statements each twelvemonth. These fiscal statements are used by the investors, Bankss and creditors to find the fiscal wellness of the organisation. For the intent of comparing the fiscal statements of the companies, the information provided on the fiscal statement must be in a similar format. GAAP is based around four cardinal premises, four general rules and four basic restrictions. The four cardinal premises of GAAP are concern entity, traveling concern, pecuniary unit and clip period rule. The four general rules are cost, gross, fiting and revelation and the four basic restrictions are objectiveness, materiality, consistence and prudence ( Wise geek, 2011 ) .
This history collects the full sums which are the decreases of an plus. This history will largely hold a recognition balance. There are two types of contra-asset histories. First is the allowance for dubious histories, which gives an estimation at the terminal of every accounting period for the expected losingss. This history appears as a lessening in the histories receivable balance on the balance sheet. Second is the accrued depreciation, which records the depreciation of an plus over its utile life. The sum by which an plus is depreciated that is recorded in the accrued depreciation history. A lessening of assets is shown by this history on the balance sheet ( Rec wizard, 2010 ) .
It is a term which is used in depicting the original cost allied with a given purchase. The sum is presented on the same requisites as at the clip of purchase. It is non even adjusted for rising prices or for any other ground. This method is used in many concern state of affairss but it besides considered of less value in nearing the existent worth of any economic merchandise from this point of position by some fiscal analysts. For illustration, if xyz purchases an plus for $ 6000 and keeps an estimation so the depreciation cost will be $ 600 per twelvemonth. The plus after the first twelvemonth will be depreciated to $ 5500. If the monetary value of the plus after the first twelvemonth will be $ 5900, xyz will non compose the monetary value of the plus after the first twelvemonth. The plus will remain of the original monetary value and less the depreciation till the clip plus is non sold ( Wise geek, 2011 ) .
Accrual Basis vs. Cash Basis Accounting:
These are two methods of managing hard currency in a concern. In hard currency footing accounting, net incomes are merely recorded when one receives hard currency from the clients and the disbursals are merely recorded when one truly writes a cheque to the marketer. This method is simple and does non devour a batch of clip but it can go a hurting if you sell merchandises or purchase merchandises on recognition. In accrual footing accounting the income is merely recorded when the payment is received and the disbursals are merely recorded when one receives goods. Accrual method of entering hard currency flow is more appropriate because it gives a proper image of the fiscal statement. It records the income or payments when they truly incur ( Tool kit, 2011 ) .
Accounting Standards Codification:
The FASB has officially launched its accounting criterions codification which is a research tool that will be used as a individual beginning of dependable nongovernmental U.S by and large accepted accounting rules. This recognizes legion of U.S GAAP dictums into 90 accounting subjects. This codification even includes Securities and Exchange Commission counsel in different subdivisions. The bing standard paperss will go antediluvian by the new codification and will be taken as non-authoritative by the FASB. The advantages of accounting criterions codification are that they will be supplying entree to all important subjects in one topographic point, it will assist in cut downing the clip spent in researching of the people, it will cut down the opportunities of nonconformity with standard through better serviceability and will be supplying right cognition with existent clip updates ( Nowalk, 2009 ) .
Samsung electronics is globally recognized organisation which supplies engineering throughout the universe. They are one of the biggest electronic organisation which industry consumer every bit good as concern related electronic merchandises.
RTL group is one of the biggest European amusement webs ; they operate in 11 different states while holding the largest production houses in the universe. Their viewership is more than 200 million people across Europe.
Lockheed Martin Corporation is one of the biggest organisations in its ain conference ; it provides IT and security solutions throughout the universe. The major portion of their gross revenues is in astronauticss and infinite industry.
The one-year studies for the twelvemonth of 2009 of the companies Samsung, RTL group and Lockheed Martin Corporation have been selected to be revised for their fiscal statements. In the undermentioned paragraphs the fiscal statements of each of these three companies will be analyzed in different facets.
Fiscal Statements: The fiscal statements of the company have been published including balance sheets, income statement, hard currency flow statement and appropriations of maintained net incomes. The figures are presented in South Korean currency which is so translated in US dollars. The fiscal statements are provided with footers which give the elaborate information of accounting policies and fiscal necessities for describing. Previous twelvemonth stoping 2008 figures are provided every bit good for comparing ( Samsung, 2009 ) .
Net Income and hard currency flow: The Company is doing good sum of net income and hard currency flow from operating activities. If we compare both the statements so it is obvious that there is great rise in the hard currency flow than the net income which possibly of import to the organisation.
Companyi??s Future Trends: Great addition in the histories receivable has besides been seen which indicates that the company has been giving a batch of recognition to its clients ; this may make jobs in the coming old ages.
Individual Sections: Samsung has besides provided the section based coverage on geographical country which is under the note 34 on page 88 of the one-year study for the twelvemonth of 2009 ( Samsung, 2009 )
Fiscal Statements: The fiscal statements in the one-year study are presented in a different manner than the other companies. Annual study of RTL group contains amalgamate income statements every bit good as amalgamate statement of comprehensive income, amalgamate statement of fiscal place, statement of alterations in equity and hard currency flow statement. The figures are presented in Euros. The fiscal statements besides provide the figures of the old twelvemonth for comparing ( RTL group, 2009 ) .
Net Income and Cash Flow: The Company has shown a great rise 2million Euros in its comprehensive income whereas its net hard currency from operating activities is in a moribund province by 302million Euros.
Companyi??s Future Trends: This shows that despite of demoing net net income for the twelvemonth ; company may travel through hard currency jobs and it might necessitate financess from external beginnings.
Individual Sections: Segment coverage of the RTL group is based on the concern section and geographical arrangements of companies and clients. It can be found under note 4 on page 127 of the fiscal statement ( RTL group, 2009 ) .
Lockheed Martin Corporation: Lockheed Martin Corporation has a different construction and layout of fiscal statements. The company records consolidated fiscal statements every bit good as statement of net incomes, balance sheet, hard currency flow statement and statement of stockholderi??s equity alterations in equity. Consolidated fiscal statements are provided as good which includes elaborate accounting policies and extra fiscal information. The figures are presented in US dollars. Financial statement besides provides the figures of the old for comparing ( Lockheed Martin, 2009 ) .
Net Income and Cash Flow: It is noted in the fiscal statement of 2009 that the companyi??s net income was in a moribund province, its hard currency flow from operating activities has declined a batch.
Companyi??s Future Trends: The Companyi??s state of affairs can acquire worse if the company keeps on running in a worsening province and could make fiscal issues for the company, since it will non be able to pay for its operations.
Individual Sections: Segment coverage of Lockheed Martin Corporation is on the footing of concern sections and client classs which are provided under the note 4 on page 66 of the fiscal study.