ACCT 6230 Week 12 (2)

Week 12 Assignments – Financial Statement Disclosures

DUE DATE: Sunday midnight of Week 12, submitted in a MS Word (or Excel if

computations required) document with filename format:

Last First_Week X hwk.doc or .xls Make sure your name appears on each page of the

homework using the header function.

Homework questions:

1. What is the full disclosure principle in accounting? Why has disclosure increased

substantially in the past 10 years? With our recent economic crises, do you think the

increased disclosures were worthwhile? Why or why not?

2. Identify the segment information that is required to be disclosed by FASB No. 131. What

are the reporting thresholds? (FAS 131 is included in the readings reference section of

week 12).

Look at Oracle’s segment information on their 2008 10-k (Annual Report), pages 105-

107)

http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0000950134%2D08%2D0122

57%2Etxt&FilePath=%5C2008%5C07%5C02%5C&CoName=ORACLE+CORP&Form

Type=10%2DK&RcvdDate=7%2F2%2F2008&pdf=

or here and click on 10-K midway through page:

http://www.nasdaq.com/asp/quotes_sec.asp?symbol=ORCL&selected=ORCL&rpage=SE

C&%20

What information does this give you that you would not have if they only reported at the

consolidated level? Which segment has the highest margin in 2008? Which segment has

grown the most in the 3 years? Does the information in this section help you understand

these changes? Why or why not? In other words, as a reader of the financial statements,

are you able to understand the segment activity?

3. What is the Management Discussion & Analysis (MD&A) section of financial

statements? What types of information are included in the MD&A? Look at the MD&A

for Oracle’s 2008 Annual report (from link in #2, starting on pg 25, goes to page 59).

Read at least the opening paragraphs and skim each section. Do you find this format and

the topics covered in the MD&A useful? Which section(s), from your perspective

(perhaps as an investor, or in your job) do you find most/least useful?

4. Do you think too much information in the disclosures leads to overload and “reader

numbness”? In other words, there is so much information that it is too much for all but

the experts to digest? Or do you think that an investor (or entity engaging in business,

such as a banker or creditor) really receives value from the disclosures and it is up to

them to educate themselves enough about the disclosures to use them wisely?