Pepsico, Coca-Cola, and Proctor and Gamble

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Part I:
The two financial accounting standard notations are:
- SFAS 47: Disclosure of long term obligations
- SFAS 87: Employers' Accounting for Pensions

The primary parties involved in the disclosure of financial statement to the public are:
(i) Executive Management
(ii) The external auditor
(iii) The internal auditor

Role of each of the primary parties:
(i) Executive Management: The executive management owns and manages the control environment and financial information that includes notes associated with the financial statement and the disclosers of financial report.
(ii) The external auditor: The role of external auditor is to assure the end users of the financial report that the information reported in the report fairly represents the financial condition and result of operations of the organization and it is in accordance with generally accepted accounting principles.
(iii) The internal auditor: The role of internal auditor is to perform the procedures to assure senior management and the audit and other committee of the governing body that the controls surrounding the processes and the development of financial report are effective.

The objectives of financial reporting are:
(i) The primary objective of the financial reporting is to provide information that is useful to present and potential investors and creditors and other users in making informed and rational investment, credit, and similar decisions.
(ii) Financial reporting should reflect prospective cash receipts to investors and creditors
(iii) Financial reporting should reflect prospective cash flow to the company.
(iv) Financial reporting should provide information about the company's resources and claims to its resources.

The two components of balance sheet are accounts receivables and long term debt and the two components of statement of earnings are EBIT and interest paid.

Part II:
Measurements used to recognize the amounts recorded in the Balance Sheet for Cash and Cash Equivalents, Accounts Receivable, Inventory, and Property, Plant and Equipment of each of the organizations are:

PepsiCo:
Cash and Cash Equivalent: the cash equivalents are highly liquid with original maturities of three months or less.

Accounts Receivable: It includes the trade receivables and the other receivables less of the allowances. These allowances are the net amount charged to expense, deductions (includes accounts written off) and other (Includes adjustments related to acquisitions, currency translation and other adjustments).

Inventory: Approximately 3%, in both 2012 and 2011, of the inventory cost was computed using the LIFO method. The differences between LIFO and FIFO methods of valuing these inventories were not material. The inventory includes raw material, work-in progress and finished goods.

Property, Plant and Equipment: Property, plant and equipment is recorded at historical cost. Depreciation and amortization are recognized on a straight-line basis over an asset's estimated useful life. Land is not depreciated and construction in progress is not depreciated until ready for service.

Coca-Cola Company:
Cash and Cash Equivalents: Cash equivalents include the time deposits and other investments that are highly liquid and have maturities of ...