(a) What alternative formats could P&G have adopted for its balance sheet? Which format did it adopt? (b) Identify the various techniques of disclosure P&G might have used to disclose additional pertinent financial information. Which technique does it use in its financials? (d) What were P&G's cash flows from its operating, investing, and financing activities for 2017? What were its trends in net cash provided by operating activities over the period 2015 to 2017? Explain why the change in accounts payable and in accrued and other liabilities is added to net income to arrive at net cash provided by operating activities.

P&G 2017 K-10:

a) Alternative formats for P&G Balance Sheet:

1. Report Format: Assets and Liabilities and Equity are listed from up to down.

2. Account Format: Assets and Liabilities and Equity are stated side by side.

3. Liquidity Format: The most liquid assets are listed first and then followed by permanent assets, and the same for liabilities.

4. Permanency Format: Noncurrent assets are stated first before current assets, and the same for liabilities.

P&G reported under US GAAP adopted the Report Format and listed balance sheet items according to their liquidity.

b) Techniques of disclosure of additional financial information:

1. Parenthetical Explanation

2. Notes to the Financial Statements

3. Cross-referencing

4. Valuation Allowances, e.g allowances for doubtful accounts, accumulated depreciation, etc.

5. Supporting Schedules

6. Comparative Statements, with about three years of financial statements.

c) P&G used Notes to the Financial Statements with supporting schedules and comparative statements.

d) 2017 Cash flows from:

1. Operating Activities = $12,753 million

2. Investing Activities = ($5,689 million)

3. Financing Activities = ($8,568 million)

e. Trends in net cash provided by operating activities over the period 2015 to 2017:

Net cash provided by operating activities:

2015 = $14,608 million

2016 = $15,435 million

2017 = $12,753 million

It increased from 2015 to 2016 and decreased in 2017 as stated above.

f) The change in accounts payable, accrued, and other liabilities is added to net income to arrive at net cash provided by operating activities because they involve cash outflows for the payment of purchases for goods and services used in generating the revenue that produces the net income.

Explanation:

P&G as a US headquartered entity reported under US GAAP with the adoption of Balance Sheet instead of reporting under IFRS with the adoption of Statement of Financial Position. P&G called its Income Statement "Consolidated Statement of Earnings" instead of the IFRS "Consolidated Income Statement."  Apart from nomenclature, the formats and disclosures are similar.

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