Notes to Financial Statements Essay

1937 Words May 13th, 2015 8 Pages
2014
Michael Velazquez
FIRST SOLAR, INC.
12/31/2014

ACCT 551 Course Project
Notes to Financial Statements

Source for the original company financial statements: http://files.shareholder.com/downloads/FSLR/63956618x0x819571/AD02242D-C0E5-4C49-AE46-A8265164AD5F/First_Solar_2014_Annual_Report_Bookmark_-_Final.pdf TABLE OF CONTENTS

Consolidated Balance Sheets for the year ended December 31, 2014, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03 Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . .
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First Solar, LLC was formed in 1999 as a Delaware limited liability company, it was then renamed to First Solar US Manufacturing, LLC in 2006. In 2003 we formed First Solar Holdings, LLC to act as a holding company to First Solar US Manufacturing, LLC and its subsidiaries. In 2006 we incorporated the holding company and renamed it to First Solar, Inc.

Note 1 - Significant Accounting Policies

Basis of presentation

The accompanying consolidated financial statements contain accounts of First Solar, Inc. and all its subsidiaries. The statements are prepared in accordance with the United States generally accepted accounting principles (“U.S. GAAP”).
All intercompany transactions have been eliminated for the purpose of consolidation. Investments in other affiliates of less than controlling interest are accounted for on a cost or equity basis.

Use of estimates

Under U.S. GAAP we are required to use certain estimates that affect the total amounts reported in the accompanying consolidated financial statements. We use estimates to account for bad debt allowance, percentage-of-completion revenue recognition, useful life of assets, depreciation of assets, inventory valuation, accrued expenses, income taxes and tax valuation allowances, warranties, goodwill. Actual results may differ from our estimates.

Accounts receivables and allowance for bad debt

The allowance for bad debt is based on historical trend, age of the receivables, and

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