An Explanation Of Financial Analysis Using The FASBs Preliminary Views On Financial Statement Presentation

Abstract

The Financial Accounting Standards Board (FASB) issued a discussion paper entitled “Preliminary Views on Financial Statement Presentation” on October 16, 2008, in which they presented a new format for the primary financial statements.  The proposed statements are segmented into functional activities of the entity on a net-asset basis. The Board’s objectives are to present a cohesive set of financial statements that are useful in predicting future cash flows and assessing liquidity and financial flexibility.  This paper describes the proposed statements, examines the application of financial ratios, and assesses the extent to which the Board’s objectives are satisfied.