fsa question

The Management Discussion and Analysis (MD&A) portion of the financial statements: A) includes such items as discontinued operations, extraordinary items, and other unusual or infrequent events. B) is not required by the SEC. C) includes audited disclosures that help explain the information summarized in the financial statements. D) reports the change in equity from transactions and from non-owner sources. here A & D both are right???

A is more right. D doesn’t ring a bell for me. Could D be more a footnote item?

ditchdigger2CFA Wrote: ------------------------------------------------------- > Could D be more a footnote item? That is my thought.

Isn’t D the Statement of changes in owner’s equity? C is the footnotes, and A is MD&A.

C is the only one that is remotely right

C is incorrect because the managements discussion and analysis is unaudited. MD&A is definitely required by the SEC, they even offer guidance on how to present it. So B is incorrect. Now we are left with A &D. D does sound a lot like the statement of owners equity. A is not the clear cut definition of MD&A, however the purpose of the MD&A is to give analysts a view of the company through the eyes of management. In this view, management wants to exclude items that are one time events, to show what they expect to earn in the future. It says in the book changes/subjective accounting policy is talked about in the MD&A. So I would say that A is correct as management discussed the event that arent usual and talk about how they effected earnings.

but A is part of the financial statements that are represented net of tax below income from continuing operations if they are applicable, none of these answers are clear-cut to be honest

yeah nothing is too clear cut. And you are correct that part A appears net of tax below continuing operations in the financial statements. However, i believe that MD&A is managements shot at explaining this occurence in words, more than in a footnote. I would answer A. Once again, there does not appear to be a clear cut answer, however both B&C are clearly wrong. Welcome to the CFA, most ambiguous questions ever.

It’s D, that goes on the Statement of Owner’s Equity… This isn’t ambiguous at all. That statement also contains the Non Comprehensive Income stuff too which is “non owner sources”

No chance that D is correct. The only answer is A. All elements reported in A are specifically required to be reported in the MD&A portion.

A seems like footnote stuff. It is pretty vague, but A seems the most correct

It is A.

A is my choice. Whats the answer dec2008?

A is correct answer by schweser… but when i read explanation…last line is D…So D is also correct and originally when I read question I opted for D…

this question sucks honestly