What do users of private company financial statements want? Financial statements' primary purpose is to serve the needs of users. But there is a quandary as to who is a "user" and what users need, particularly for private companies. Financial Executives Research Foundation (FERF) examines these needs, from both the preparer and user perspectives.(private companies)

From: Financial Executive | Date: May 1, 2006| Author: | Copyright information

Most, if not all, would agree that perhaps the primary objective of financial reporting is serving the needs of users. Broadly speaking, users of financial statements can be categorized as internal and external. Internal users can include company management, owners or directors. External users can be further categorized into two groups. The first includes commercial bankers, vendors/suppliers, rating agencies and others concerned with the company's collateral and/or credit-worthiness. The second category, external shareholders and equity-oriented investors, may be more concerned ...

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