Quality of Financial reporting - Assignment Example

Quality of Financial Reporting The quality of financial ments in terms of various reports as disclosed by Intel can be critically examined withthe assistance of a checklist. The components of the checklist and the corresponding performances of Intel have been discussed as follows:Sales: Allowance for doubtful accounts are also provided by the company under the specifications of GAAP which are excluded from impairment charges. The company further tends to respond strategically in accordance with the changes to its pricing or volume of commodities produced.

However, as the growth of the company depends on various intangible attributes, it becomes quite challenging to examine its real or actual financial performances (Intel Corporation, 2010). Cost of goods sold: The inventory computation process of Intel is focused on the First-In-First-Out method. To comprehend the loss recognition of the written down values of inventories, the company tends to capitalize interests based on the borrowings treating the grants as additional expenditures for the stock (Intel Corporation, 2010).

Operating expenses: The depreciation of the tangible assets is calculated in a straight-line method by Intel after capitalizing the interests on borrowings in the net worth of the asset. Impairment costs are charged on goodwill, non-marketable equity investments and other intangible assets which are also reviewed annually to monitor any changes. The acquisitions during research and development process are also identified as an intangible asset liable for amortization costs (Intel Corporation, 2010).

Non-operating revenue and expenses: The net interest income generated by the company is computed after deducting the interest expenses incurred during the fiscal year along with other nets. Equity income is also calculated in relation to both its marketable and non-marketable equity investments. The financial statements of the company also depict the income tax changes along with the probable reasons for such alterations increasing its transparency. The financial statements are elaborate on the discontinued functions in relation to various investment activities initiated by the company (Intel Corporation, 2010).

Other issues: The consolidated financial statements apparently depict the material alterations caused in relation to outstanding shares of Intel over a given period of time. The cash flow statement as well as the income statement also depicts the computation process of operating earnings before taxation and after taxation charges following the guidelines of GAAP (Intel Corporation, 2010). Thus, as can be observed, the financial statements presented by Intel depict fair value for the transactions of the corporation following the guidelines of GAAP in a transparent way.

Hence, it can be affirmed that the corporation has maintained good quality of reporting when presenting its consolidated financial statements annually.ReferencesIntel Corporation. (2010). Amazing things happen with Intel Inside. Retrieved from http://www.intc.com/intelAR2010/common/pdfs/Intel_2010_Annual_Report_and_Form_10-K.pdfBibliographyBragg, S. M. (2011). Wiley GAAP 2012: Interpretation and Application of Generally Accepted Accounting Principles. United States: John Wiley & Sons.