FINANCIAL STATEMENTS PRESENTATION Accounting Matters OVERVIEW Financial statements

FINANCIAL STATEMENTS PRESENTATION Accounting Matters

OVERVIEW Financial statements presentation is a very essential activity for an organization as it signifies the importance of all the stakeholders. There is however some important accounting concepts that the stakeholders need to know. This paper will discuss the financial statement presentation and disclosures associated with consolidations related to off balance sheet transactions, Variable-Interest Entities, and Noncontrolling Interest. It will also discuss the disclosure requirements; also what implications, both positive and negative, these disclosures may have to the reader of the financials.

OFF-BALANCE SHEET TRANSACTIONS The FDIC, (2004) examined Off- Balance Sheet transactions and reported that it covers a variety of items which may include lending activities, swaps, futures, forwards, and option contacts, among others.

VARIABLE INTEREST ENTITIES A variable interest entity refers to a legal subject to consolidation according to the provisions of the variable interest subjections of ASC 810 -10 -20.

NONCONTROLLING INTEREST The Noncontrolling Interests in consolidated financial statements are contained in FASB No. 160 and re described in the ARB No. 51. This section addressed topics such as clear identification in the financial statements of the ownership of interests in subsidiaries; clear identification of the net income attributed both the parent and the subsidiary; clear presentation of changes in parent’s ownership interests; clear presentation of the gain or loss upon consolidation using fair value; and clear presentation of disclosures that distinguish interests of the parent and subsidiary.

REFERENCES FDIC, (2004). Off-balance sheet activities. DSC Management Manual of Examination Policies. Section 3. 8 Financial Accounting Standards Board, (2007). Statement of Financial Accounting Standards Number 160; Accounting for noncontrolling interests in consolidated financial statements. Norwalk, Ct. PWC, (2009). 10 minutes on the off-balance sheet arrangements. Pricewatershouse. Coopers LL. P. NY. Source www. pwc. com PWC, (2013). Guide to accounting for variable Interests. Pricewatershouse. Coopers LL. P. NY. Source www. pwc. com Robert G. Morgan, Martha M. Pointer, Katherine N. Morgan, and William D. Cooper, (2010). Accounting for noncontrolling interests in consolidated financial statements; an explanation of FASB Statement No. 160.