Procter And Gamble Financial Statement Analysis

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Procter & Gamble Financial Statement Analysis
Most people think of financial statements as a tool only used by accountants and financial experts, but over the years they have grown to become a powerful tool in analyzing the financial
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An independent audit firm is necessary in obtaining unbiased opinions and to be able to test the company’s internal controls to ensure proper accounting principles are applied each and every year.
Advertising Accounting Policy
According to Skinner (2008), under the US GAAP, capital expenditures are capitalized however most research and development (R&D), and advertising expenditures are expensed as incurred. P&G’s advertising costs are treated as a selling, general and administrative expense (SG&A) and are charged to expense as incurred, they were $9.7 billion in 2013 and $9.3 billion in 2012, the advertising costs can be found in the Financial Summary (Unaudited), whereas SG&A costs as a whole are listed in the Consolidated Statement of Earnings (CSU-Global,
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Looking at the Consolidated Statements alone does not paint a full picture of the company’s operations and decisions. It is absolutely necessary to read the notes to obtain a deeper understanding of which policies are in place for the numbers to make sense. P&G’s financial statements and notes were very useful in learning their revenue recognition policy, and trade promotions. One can clearly see where P&G used historical cost versus fair value. Additionally, P&G was clear in regards to the accounting policy related to advertising. The information provided seemed to be transparent and useful, one can say that it achieved the objective of financial

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