Accounting All-in-One For Dummies

Chapter 4

Reading Explanatory Notes and Disclosures

In This Chapter

Touching on corporate governance

Studying the characteristics of a corporation

Finding out more about a company by reading its notes and disclosures

Figuring out who is responsible for full disclosure

This chapter begins with a quick overview of corporate governance and ends by shedding light on the explanatory notes and other information found in most corporate annual reports. For a complete picture of corporate annual reports, see Chapter 5. Annual reports educate the shareholders about corporate operations for the past year.

Also in this chapter, you find out how a business becomes a corporation, and you review the four characteristics of a corporation: continuity, easy transferability of shares, centralized management, and (the biggie) limited liability.

The complete list of notes and disclosures that may appear on a corporate annual report is quite long, so this chapter can't cover them all. Instead, it focuses on the most common explanatory notes and disclosures popping up on corporate annual reports.

Realizing ...