Financial Statements and Disclosure

The amount and type of information that companies disclose in their financial statements is of considerable interest to current investors, employees, potential investors, creditors, suppliers, the government and a host of other interested parties, including creditors. Companies must strike a balance between providing enough information to be in compliance with the law and to provide relevant information to potential investors, but at the same time, companies do not want to expose unnecessary information which could put them at a competitive disadvantage.

One of the benefits that Strassli Holding would receive by improving the quality of its financial disclosure is that it would be more accurately presenting the status of the company at any particular time. This means that creditors would have a better understanding of the company's position, and might be willing to extend additional credit, and potential investors, informed as to the company's actual performance, may invest additional money or drive up the price of the stock in light of favorable information.

Because Strassli is a holding company, consolidating information for the various subsidiaries would improve statement quality. This is because the statements would now reflect the performance of all of the various subsidiaries, which directly affect the performance of the company as a whole. Failure to provide this information misrepresents the parent company's performance and the ability of the parent company to m

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cal distribution of the company's sales would be negatively perceived, actually work in favor of additional disclosure from a company perspective. Shareholders should be aware of the actual performance of the company, and one of the problems that holding companies such as Strassli face is that of foreign exchange. Similarly, geographical distribution of sales and nationalization of assets are also risks that international companies must address. To withhold this information from the owners of the company (shareholders) represents irresponsible behavior on the part of the directors. Etranger's arguments are less self-serving in that he suggests that the strong performance of the company could lead to increased operating costs as unions, for example, seek higher wages based on the company's performance. Foreign governments would also be likely to raise taxes, according to Etranger, with the results that the long-term financial performance of the company would be put at risk. Strassli has little choice but to recognize that the pressure for improving financial disclosure is increasing from all sides. Its only real decision is whether to implement change now in an attempt to anticipate the regulatory changes, or whether to wait

Category: Business - F