Question:
EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, performs automated collection,
validation, indexing, and forwarding of submissions by companies and others who are required by law to
file forms with the U.S. Securities and Exchange Commission (SEC). All publicly traded domestic
companies use EDGAR to make the majority of their filings. (Some foreign companies file voluntarily.)
Form 10-K, which includes the annual report, is required to be filed on EDGAR. The SEC makes this
information available on the Internet.
Required:
1. Access EDGAR on the Internet. The web address is www.sec.gov.
2. Search for a public company with which you are familiar. Access the most recent 10-K filing. Search
or scroll to find the financial statements and related notes.
3. Answer the following questions related to the company’s income statement:
a. Does the company use the single-step or multiple-step format, or a variation?
b. Does the income statement contain any separately reported items in any year presented (discontinued
operation or extraordinary item)? If it does, describe the event that caused the item. (Hint: there should be
a related disclosure note.) c. Describe the trend in net income over the years presented.
4. Repeat requirements 2 and 3 for two additional companies.
Answer:
Answers to the questions will, of course, vary because students will research financial statements of
different companies.
No specific standards dictate how income from continuing operations must be displayed, so companies
have considerable latitude in how they present the components of income from continuing operations.
This flexibility has resulted in a considerable variety of income statement presentations. However, we
can identify two general approaches, the single-step and the multiple-step formats that might be
EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, performs automated collection,
validation, indexing, and forwarding of submissions by companies and others who are required by law to
file forms with the U.S. Securities and Exchange Commission (SEC). All publicly traded domestic
companies use EDGAR to make the majority of their filings. (Some foreign companies file voluntarily.)
Form 10-K, which includes the annual report, is required to be filed on EDGAR. The SEC makes this
information available on the Internet.
Required:
1. Access EDGAR on the Internet. The web address is www.sec.gov.
2. Search for a public company with which you are familiar. Access the most recent 10-K filing. Search
or scroll to find the financial statements and related notes.
3. Answer the following questions related to the company’s income statement:
a. Does the company use the single-step or multiple-step format, or a variation?
b. Does the income statement contain any separately reported items in any year presented (discontinued
operation or extraordinary item)? If it does, describe the event that caused the item. (Hint: there should be
a related disclosure note.) c. Describe the trend in net income over the years presented.
4. Repeat requirements 2 and 3 for two additional companies.
Answer:
Answers to the questions will, of course, vary because students will research financial statements of
different companies.
No specific standards dictate how income from continuing operations must be displayed, so companies
have considerable latitude in how they present the components of income from continuing operations.
This flexibility has resulted in a considerable variety of income statement presentations. However, we
can identify two general approaches, the single-step and the multiple-step formats that might be
