Compilation Reports and Disclosures

question 51

Essay

Compilation reports and disclosures
You have been engaged to perform a compilation service for Raven Company.Management informs you that it will not include the required disclosures in the financial statements.What effect will this have on you with respect to this engagement?

Understand the accounting procedures for asset disposals including gain or loss calculations.

Describe unique characteristics of natural resources in accounting, including their depletion.

Understand the importance of intangible assets and their amortization.

Grasp the concept of commercial substance and its effect on the accounting for asset exchanges.

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Definitions:

Constant-Growth DDM

A version of the dividend discount model that assumes dividends grow at a constant rate indefinitely.

Dividend

Funds disbursed by a corporation to its owners, often from the company's profits, as a profit sharing.

Expected Growth Rate

The predicted percentage increase in the value of an investment, asset, or economy over a certain period of time.

Required Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.