Open AccessThe Commitments Statement: A New Statement for Creditors
Author(s) -
Saeid Jabbarzadeh Kangarlouei,
Rezgar Talebpour Asl,
Asghar Azizi
Publication year - 2012
Publication title -
journal of economics and behavioral studies
Language(s) - English
Resource type - Journals
ISSN - 2220-6140
DOI - 10.22610/jebs.v4i1.297
Subject(s) - creditor , statement of changes in financial position , statement (logic) , financial statement analysis , accounting , financial statement , valuation (finance) , business , ibm , point (geometry) , actuarial science , finance , financial ratio , accounting information system , law , accounting management , political science , audit , debt , materials science , geometry , mathematics , nanotechnology
Much has been written lately concerning the failure of several major corporations to report their financial statuses accurately. Enron, Global Crossing, IBM and others have failed to provide accurate information to their investors and to provide full disclosure of liabilities that would influence the valuation. The present paper is focusing on creditors as a main group of accounting information users, which have been neglected, in field of information presentation. To solve this problem we introduce a new financial statement called “the commitments statementâ€. In the beginning, we point out financial reporting goals and users` informational needs. Then, we mention the issue, which creditors’ informational needs have not been well provided; and the reasons are explained. We continue with inspection of providing information related to solvency and recognition of financial flexibility of entities. Finally, we introduce “the commitments statement†and explain how to provide this statement. We end with the conclusion section.