The term "earnings quality" refers to the ability of reported earnings to predict an entity's future earnings. To enhance predictability, financial analysts attempt to distinguish between a company's transitory earnings (transactions or events not
likely to occur in the future) and its permanent earnings. It is tempting to assume that transitory earnings are represented primarily by discontinued operations and extraordinary items. All items of revenue and expense included in operating income may not be permanent, however. Restructuring costs often are included in determining operating income, yet may or may not continue in the future. Required: Do you think restructuring costs represent transitory earnings or permanent earnings? Explain.
Restructuring costs might represent either transitory earnings or permanent earnings. The determination is very much dependent on the history of a company in recording such charges. Some would argue that for a company recording frequent restructuring charges such charges represent more of a permanent element of earnings. Much of the determination depends on the nature of the restructuring charges. Information provided in the notes to the financial statements describing the nature of the restructuring and management's future plans is vital in determining if the restructuring charge is permanent or transitory.
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Indicate whether the statement is true or false
You are a union representative for Teamsters Local 695 representing bus drivers, canning workers, police and firefighters, and truck drivers. An angry member calls the union hall because he has just learned the union has been paying for television ads supporting a presidential candidate he does not favor. What can you tell this union member about how union funding for political campaigns works and what can be done to address his concerns?
What will be an ideal response?
When planning a report, you should base the structure, formality, and length on
A) the writing style you use. B) your decision to include supplementary parts. C) the needs and desires of the reader. D) the unity and coherence of the report. E) how you collect and interpret your data.
Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n):
a. incidental beneficiary. b. creditor beneficiary. c. donee beneficiary. d. assignee.