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the summary of significant accounting policies should disclose the pro forma effect of retroactive application of an accounting change. basis of profit recognition on long-term construction contracts. adequacy of pension plan assets in relation to vested benefits. future minimum lease payments in the aggregate and for each of the five succeeding fiscal years.

Respuesta :

The basis for profit recognition on long-term construction contracts should be included in the overview of important accounting policies.

What do you mean by the summary of significant accounting policies?

When a choice is possible, the firm's important accounting procedures and policies are described in the summary of significant accounting policies. Understanding the amounts provided in the financial statements requires knowledge of the methodologies. The percentage of completion or completed contract methods may be used to account for long-term contracts. The user can better grasp the significance of reported revenue and gross profit by being made aware of this method.

The other response options provide information on individual accounts or the outcome of using particular accounting rules. They don't say what accounting and reporting decisions the company has taken.

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