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- Title
EDITORIALS.
- Abstract
This article presents information on the balance sheets and the regulations of the U.S. Federal Trade Commission. In the book "The Balance Sheet," by Charles B. Couchman, a detailed study of pro-forma statements is described. Couchman assumed that there has been a reasonably accurate distribution of the proceeds as between working capital and other forms of capital, the portion devoted to working capital can be applied to cash in bank or current liabilities. No respectable forecast can be made on working capital, as a comparison in any particular case of a pro-forma balance sheet with the actual balance sheet a year later will reveal. Infact, it is doubtful if in many instances the effect on fixed assets can be reasonably determined. Fabrication of a new product or changes in the fabrication of an old product may presumably require an investment in certain machinery. Without a detailed split of the proceeds of the issue to be sold, the proforma balance sheet means nothing. Promoters and managements of corporations under the regulations of the Federal Trade Commission are now required to include in the registration statement details of the uses to which the proceeds of a proposed issue are to be put.
- Subjects
ACCOUNTING; PRO forma statements (Accounting); DELEGATED legislation; FINANCIAL statements; UNITED States. Federal Trade Commission; BALANCE Sheet: Its Preparation, Content &; Interpretation, The (Book); COUCHMAN, Charles B.; BUSINESS enterprises
- Publication
Accounting Review, 1933, Vol 8, Issue 3, p243
- ISSN
0001-4826
- Publication type
Editorial