Context is very important to understand your responses to these questions. That means when you provide me with numbers explaining a question, without comparing
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Context is very important to understand your responses to these questions. That means when you provide me with numbers explaining a question, without comparing that number to total assets, total equity or net income gives me no idea about the importance of the numbers you provide.
1. Summarize the company’s “Basis for Presentation and Principles of Consolidation.” The basis of presentation might include whether or not the financial statements are using GAAP or IFRS, consolidation principles, etc.
2. Summarize the method(s) used by the company to account for their investments (e.g. equity method of accounting or cost method, etc). Include discussion of how the company accounts for available for sale securities and trading securities if any.
3. Summarize the company’s goodwill accounting and impairment of goodwill if any. Include any methodologies described by the company.
4. Summarize the company’s accounting for their foreign currency translation adjustments. Identify and describe the impact any foreign currency adjustments. Can you identify the method used to translate the foreign currency to US$$?
5. Summarize the accounting treatment for the company’s VIE’s, if any.
6. Summarize any acquisitions made during the year and the accounting treatment for the acquisitions described in the financial statements. Include any summaries of contingent consideration paid. Describe bargain purchases, if any.
7. Summarize the company’s hedging strategy(s) if any. There could be several strategies.
8. Identify the company’s derivative’s strategy (different than the hedging strategy) and what kind of predominant derivative contracts the company uses. Describe you reasoning why the company uses a particular kind of derivative contract.
9. Summarize the operating segments of the company and highlight any facts you find interesting and why.
10. Summarize the noncontrolling interests accounting in the consolidated financial statements.
11. Find an interim financial statement and disclosures and summarize and similarities and differences you find when comparing the interim financial statements to the annual consolidated year-end financial statements. For instance, was there evidence of earnings management each quarter or other manipulations during the year?