ITPEC IP October 2019 Question 69
Among the items of information concerning management status, which of the following is the list that contains all information which is mandated for disclosure in the annual securities reports of listed companies?
Explanation
A, C and D: cash flow statement, income statement and balance sheet — the annual securities report must contain the company's financial statements, and market share is not one of them.
Listed companies file an annual securities report under securities law (in Japan, the Financial Instruments and Exchange Act) so that investors can judge the company. Its core is the set of financial statements:
- •Balance sheet — assets, liabilities and net assets at the end of the period
- •Income statement — revenue, expenses and profit for the period
- •Cash flow statement — cash from operating, investing and financing activities
- •Statement of changes in equity — how net assets changed
Market share is useful information about the company's competitive position, but it is not a financial statement, and disclosing it is not mandated.
Answer (c)
Why not others:
- •(a) A, B, C — includes market share and leaves out the balance sheet
- •(b) A, B, D — includes market share and leaves out the income statement
- •(d) B, C, D — includes market share and leaves out the cash flow statement
Key rule: The mandated disclosures are the financial statements, balance sheet, income statement, cash flow statement and statement of changes in equity; market and business indicators are the company's own choice to publish.
Corporate Activities · AI-written, may contain errors
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