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#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
You can identify the types of accruals and valuation entries in the [...] section of MD&A and in the significant accounting policies footnote, both found in the annual report.
Answer
Critical accounting policies/estimates

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
You can identify the types of accruals and valuation entries in the [...] section of MD&A and in the significant accounting policies footnote, both found in the annual report.
Answer
?

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
You can identify the types of accruals and valuation entries in the [...] section of MD&A and in the significant accounting policies footnote, both found in the annual report.
Answer
Critical accounting policies/estimates
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An important first step in analyzing financial statements is identifying the types of accruals and valuation entries in an entity’s financial statements. Most of these items will be noted in the critical accounting policies/estimates section of management’s discussion and analysi

Original toplevel document

7. USING FINANCIAL STATEMENTS IN SECURITY ANALYSIS
ions of balance sheet accounts. Accruals and valuation entries require considerable judgment and thus create many of the limitations of the accounting model. Judgments could prove wrong or, worse, be used for deliberate earnings manipulation. <span>An important first step in analyzing financial statements is identifying the types of accruals and valuation entries in an entity’s financial statements. Most of these items will be noted in the critical accounting policies/estimates section of management’s discussion and analysis (MD&A) and in the significant accounting policies footnote, both found in the annual report. Analysts should use this disclosure to identify the key accruals and valuations for a company. The analyst needs to be aware, as Example 4 shows, that the manipulation of earnings and a

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