he quality of Walmart’s financial information helps its users to correct their prior expectations on share prices. Answer Walmart is the only company in its industry to depreciate its plant assets on a straight-line basis. Answer Walmart switches from first-in first-out (FIFO) to average-cost (AVCO) and then back to FIFO over a 2-year period. Answer Walmart does not issue its first-quarter report until after the second-quarter results are reported. (Do not use relevance.) Answer Walmart has attempted to determine the replacement cost of its inventory. Three different valuators have produced significantly different amounts for the inventory value. The CFO decided to report the middle value for external reporting purposes.
Qualitative characteristics make accounting information useful for decision-making purposes. Identify the qualitative characteristic that is being adopted or not adopted for each of the following situations.
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comparability predictive value
consistency relevance
confirmatory value timeliness
faithful representation understandability
materiality verifiability
- The quality of Walmart’s financial information helps its users to correct their prior expectations on share prices. Answer
- Walmart is the only company in its industry to
depreciate its plant assets on a straight-line basis. Answer - Walmart switches from first-in first-out (FIFO) to average-cost (AVCO) and then back to FIFO over a 2-year period. Answer
- Walmart does not issue its first-quarter report until after the second-quarter results are reported. (Do not use relevance.) Answer
- Walmart has attempted to determine the replacement cost of its inventory. Three different valuators have produced significantly different amounts for the inventory value. The CFO decided to report the middle value for external reporting purposes.
Any financial statement depicts the company's finances. In other words, it gives quantitative data to investors, management, the government, and others. Qualitative data is information that cannot be measured or expressed numerically. It will be intangible in nature, but it will have a significant impact on quantitative inputs and resources. For example, an effective management team will make a prudent decision that will result in increased returns for the company and the overall growth of the organization and associated members.
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