如下

问题如下：

Question An analyst gathers the following information about a take-or-pay contract disclosed by a company in the notes to its financial statements:

To properly reflect the company's leverage, using constructive capitalization, the analyst should adjust the company's reported financial statements by:

选项：

A.A.adding €8,000,000 to the assets and adding €8,000,000 to the liabilities.

B.B.adding €10,000,000 to the assets and adding €10,000,000 to the liabilities.

C.C.adding €8,000,000 to the assets, adding €10,000,000 to the liabilities and subtracting €2,000,000 from equity.

解释：

Solution

1. Correct because one common source of off-balance-sheet obligation is purchase contracts, which may be structured as take-or-pay contracts. Analysts typically adjust reported financial statement information by constructively capitalizing, where material, purchase obligations. Constructive capitalization means that the analyst estimates the amount of the obligation as the present value of future purchase obligation payments and then adds the amount of the obligation to the company’s reported assets and liabilities. In this case, the analyst should add €8,000,000 to the company’s reported assets and liabilities.

2. Incorrect because it increases both assets and liabilities with the future purchase obligation of €10,000,000 while constructive capitalization means that the analyst estimates the amount of the obligation as the present value of future purchase obligation payments being €8,000,000 and then adds the amount of the obligation to the company’s reported assets and liabilities.

3. Incorrect because the equity position is not adjusted with €2,000,000 but only assets and liabilities with €8,000,000 since constructive capitalization means that the analyst estimates the amount of the obligation as the present value of future purchase obligation payments being €8,000,000 and then adds the amount of the obligation to the company’s reported assets and liabilities.

Evaluating Quality of Financial Reports

• describe indicators of balance sheet quality