Corporate Reporting and the Financial Analyst.

Abstract The article discusses the needs of financial disclosure which are made to security holders and other interested parties. Disclosure that may mislead one financial analyst may result in misleading thousands of other people in the economy. The article presents results of interviews with financial analysts in specific areas of criticism of disclosure and proposed solution by them. For example, in leasing, the current amount to be paid under the leases is not always stated, nor is the total amount contracted for payment over the years. Property under the leases is not described, nor are real and personal property segregated. According to the analysts, a disclosure should be made in a manner permitting facts about long-term leases to be readily obtainable from published statements. A specific determinable liability, both long-term and current portion, does in fact exist as created by the contract and should be recognized, the asset should be capitalized, and both the asset and liability should be placed in the body of the balance sheet. Others felt that capitalization is not essential, but that expansion of the footnote to include all pertinent information is needed.