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#cfa-level-1 #implications-for-financial-analysis #reading-25-understanding-income-statement #revenue-recognition
it is generally possible to characterize the relative conservatism of a company’s policies and to qualitatively assess how differences in policies might affect financial ratios.
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Although it may not be possible to calculate the monetary effect of differences between particular companies’ revenue recognition policies and estimates, it is generally possible to characterize the relative conservatism of a company’s policies and to qualitatively assess how differences in policies might affect financial ratios.

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3.3. Implications for Financial Analysis
estimates. In order to analyze a company’s financial statements, and particularly to compare one company’s financial statements with those of another company, it is helpful to understand any differences in their revenue recognition policies. <span>Although it may not be possible to calculate the monetary effect of differences between particular companies’ revenue recognition policies and estimates, it is generally possible to characterize the relative conservatism of a company’s policies and to qualitatively assess how differences in policies might affect financial ratios. <span><body><html>


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