Question

The notes to the financial statements do all of the following except?

1) Provides managers' insights into their strategies and their analysis of the company's exposure to risk factors.
2) Explain assumptions the company has used to measure and report accounting information.
3) Explain how the company values property, plant, and equipment, how it is being depreciated, how much depreciation has been accumulated to date, and the expected useful lives of the assets.
4) Explain how the company accounts for inventory and what cost methods the company uses to value inventory

Answer 1

Notes to the financial statements do not provide managerial insights or strategies. They are intended to give details on accounting assumptions, explain valuations of assets like property and equipment, and describe inventory accounting methods.

Step-by-step explanation:

The notes to the financial statements do not provide managers' insights into their strategies and their analysis of the company's exposure to risk factors. Instead, the notes are primarily used to disclose important information about the financial condition and accounting practices of the company. Here's what the notes typically include:

• Explanations of the accounting assumptions used to measure and report information.
• Details on how the company values its property, plant, and equipment (PP&E), including methods of depreciation, accumulated depreciation, and the assets' expected useful lives.
• Information on inventory accounting and the cost methods the company uses to value their inventory.

Overall, the notes are an essential part of the financial statements that contribute to transparency and provide the necessary context for understanding the reported figures.