Bobby Young is the accountant for the Blazers Ltd. which operates a new professional hockey team. He has just finished preparing the financial statements for the team's first yearend, which falls on December 31,2021 . The chief financial officer (CFO) of the team is Bucky Ryan and he has just reviewed the financial statements and made the following requests of Bobby: 1. The team's bank needs a final copy of the financial statements by January 15, 2022, so Bobby recorded the utilities expense for December 2021 based on an estimate because he normally receives the utility bill three weeks after the month relating to the bill, Bucky wants this removed from the financial statements because it is not a "solid" number based on an invoice. 2. The team has bought a small building near the arena. The city selected this area for some significant development and consequently the value of the property has risen15%in the past year. Bobby has not shown this increase in value on the financial statements but Bucky would like him to do so. 3. The team recently signed Wayne Crosby to play next year. Upon signing, the team paid Wayne a" no strings attached" signing bonus. Bobby recorded this as an expense but Bucky would like him to record it as an asset since it relates to a future period. What is the objective of financial reporting? Do Bucky's suggestions for what the company should report on the financial statements meet the objective of financial reporting? Explain
Bobby Young is the accountant for the Blazers Ltd. which operates a new professional hockey team. He has just finished preparing the financial statements for the team's first yearend, which falls on December 31,2021 . The chief financial officer (CFO) of the team is Bucky Ryan and he has just reviewed the financial statements and made the following requests of Bobby: 1. The team's bank needs a final copy of the financial statements by January 15, 2022, so Bobby recorded the utilities expense for December 2021 based on an estimate because he normally receives the utility bill three weeks after the month relating to the bill, Bucky wants this removed from the financial statements because it is not a "solid" number based on an invoice. 2. The team has bought a small building near the arena. The city selected this area for some significant development and consequently the value of the property has risen15%in the past year. Bobby has not shown this increase in value on the financial statements but Bucky would like him to do so. 3. The team recently signed Wayne Crosby to play next year. Upon signing, the team paid Wayne a" no strings attached" signing bonus. Bobby recorded this as an expense but Bucky would like him to record it as an asset since it relates to a future period. What is the objective of financial reporting? Do Bucky's suggestions for what the company should report on the financial statements meet the objective of financial reporting? Explain
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