An Introduction to Accounting

BMS SEM II
Dr. Madhurita Dey

1
Why Accounting?

Complete and orderly records

of transactions

Measuring financial
performance

Evaluating financial position

2
Accounting—Language of the Business

• As a language is used to communicate

information, similarly, accounts are prepared
to communicate information regarding:
• the financial performance (i.e., whether an
entity is earning profits or incurring losses)
and
• the financial position of an entity (i.e., the
assets owned and the liabilities owed).

3
Accounting—Language of the Business
(Contd.)

4
Definition of Accounting

Accounting, as an information system,

can be defined as a process of
recording,
classifying,
summarizing,
analyzing, and interpreting
financial information and
communicating the results thereof to
users of accounting information for
their decision making.

5
 Accounting in Nutshell
cording

Recording Journal

assifying

Classifying Ledger
mmarizing

Summarizing Trial Balance, Income Statement, Balance

Sheet, Cash Flow Statement
Analysing
Financial Statement
and
Analysis
Interpreting
ommunicating

Communicating Reporting

6
Recording

After measuring a transaction in

terms of money, it needs to be
recorded in the books of
accounts.

The act of recording

transactions in the journal is
known as journalising.

Journal is the book of primary

entry where transactions are
recorded in a chronological
order (i.e., in the sequence of
occurrence).
7
Classifying
Transactions recorded in the journal are classified or grouped to ensure that
similar transactions are found at one particular place (i.e., an account).
Transactions are classified in a book known as the ledger.

An account is an individual record of increases and decreases in an item.

A ledger is a book that contains entire group of accounts of a business.

Example: All transactions relating to purchases are grouped under the account
called “Purchases Account.” Similarly, all transactions relating to sales are
grouped under the account called “Sales Account.”

8
Summarizing

After classifying the transactions in the ledger,

their results are summarized in a way that is
useful to the users of accounting information.

This is done by preparing the trial balance and

financial statements, viz., Profit and Loss
Account, Balance Sheet, and Cash Flow
Statement.

9
Analysing

After summarizing the results of financial transactions, they

are analysed.

Analysis is done by studying the relationship between

different items in the financial statements for intra-firm and
inter-firm comparison.

Example: The sales figures of a business over the last five

years can be analysed to determine the trend in sales i.e.,
whether it is showing a downward trend or an upward trend.

10
Interpreting
Drawing inferences or conclusions from the analysis is known as
interpreting.

In simple words, analysis tells what has happened, whereas,

interpretation helps you figure out why that thing has happened.

Example: Suppose the analysis of sales of a business shows an

upward trend. Such an upward trend in sales can be interpreted as a
sign of efficient utilization of assets in generating sales.

11
Communicating
Accounting generates some meaningful information regarding the financial
performance and position of the business.

Such information is communicated to the users of accounting information to

facilitate their decision making.

Example: Companies communicate information relating to their financial

performance and position to their shareholders through the annual reports.
Based on the annual reports, shareholders can decide whether they should
hold on to their investments or liquidate (i.e., sell) their investments.

12
Objectives of Accounting

Maintaining systematic records

Ascertaining operational results

Ascertaining financial position

13
Test Your Understanding
Which of the following is least likely an objective of accounting?
a. Ascertaining financial position
b. Maintaining systematic records
c. Ascertaining operational results
d. Recording qualitative aspects of an event

Correct answer: d: Recording qualitative aspects of an event is not an objective of

accounting. In fact, accounting fails to record the qualitative aspects of an event.

Feedback for option a: Ascertaining financial position is an objective of accounting.

Feedback for option b: Maintaining systematic records is an objective of accounting.

Feedback for option c: Ascertaining operational results is an objective of accounting.

14
Users of Accounting Information

Other
Stakeholders
Note: Effectively speaking, for corporate form of
business, owners (shareholders) are external
users as management is divorced from the
owners.

15
Internal Users

Owners invest their money in the form of capital in the business.

Therefore, they are interested in the safety of their capital and
Owners:
profitability of the business. Therefore, owners keep an eye on the
accounting information.

In the company form of business, the ownership and the management

are separated. Professional managers control the business. They are
Management: responsible for the safety of owners’ funds. They are also responsible for
increasing the profitability of the business. Therefore, they show keen
interest in accounting information.

Employees are interested in the profitability of the business because

Employees: timely payment of their remuneration depends largely on the
profitability and liquidity of the business.

16
External Users

Prospective
Prospective investors are interested in the profitability of the
Investors: business because their investment decision depends largely on the
profitability of the business.

Lenders: Lenders are interested in the long-term solvency of the business

because if the business remains solvent in the long term, it is likely
that they will get back the money that they have lent to the business.

Suppliers: Suppliers are interested in the short-term solvency of the business

because if the business remains solvent in the short term, it is likely
that they will be paid for the goods or services they have supplied to
the business.

17
External Users (contd.)
Financial institutions provide short-term and long-term loans to the business
Financial and therefore, they are interested in the solvency position of the business
institutions: because the solvency position of a business determines its ability to repay the
loans.

Government: Government is interested in the profitability of a business because its tax

revenue depends on the profitability of the business.

Researchers: Researchers use accounting information as secondary data for their research
work.

Other
stakeholders Other stakeholders include regulators, customers, credit rating agencies etc.

18
Test Your Understanding
Which of the following users of accounting information is most likely to be interested in the
long-term solvency of a business?
a. Lenders
b. Suppliers
c. Government
d. Researchers

Correct answer: a: Lenders are interested in the long-term solvency of the business
because if the business remains solvent in the long term, it is likely that they will get
back the money that they have lent to the business.

Feedback for option b: Suppliers are interested in the short-term solvency of the
business because if the business remains solvent in the short term, it is likely that
they will be paid for the goods or services they have supplied to the business.

Feedback for option c: Government is interested in the profitability of a business

because its tax revenue depends on the profitability of the business.

Feedback for option d: Researchers use accounting information for their research
work.
19
Match the following:
Compliance
Suppliers Tax
Employees Remuneration
Government ROI
Investors Decision making
Managers Secondary data
Researchers Short-term Solvency
SEBI
Lets match:
Suppliers Short-term solvency
Employees Remuneration
Government Tax
Investors ROI
Managers Decision making
Researchers Secondary data
20

SEBI Compliance
Financial Accounting Vs. Management Accounting

Accounting can broadly be classified into two branches: Financial

Accounting and Management Accounting.

Financial Accounting is concerned with generation and

communication of financial information primarily for the external
users of accounting information.

Management Accounting is concerned with generation and

communication of financial and other information to the
management.

21
 of Accounting

Inability to record qualitative aspects

1 Inability to record qualitative aspects

Not an exact science

2 Not an exact science

Inability to capture the effect of inflation

3 Inability to capture the effect of inflation

22
Inability to Record Qualitative Aspects

Accounting records only those events which can be

measured in terms of money.

Therefore, accounting can record only the

quantitative aspects of an event. Qualitative aspects
are totally ignored.

Example: Human resource in spite of being an

important resource does not feature in the balance
sheet.

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Not an Exact Science
Generally, accountants record transactions in the books of accounts
based on documentary evidences known as the vouchers.

However, in some cases, accountants may have to record some

transactions based on estimates.

Such estimates may vary from accountant to accountant and thus result
in different amount of profits or losses.

Example: A machine loses its productive capacity with usage. Now, to

determine the loss in productive capacity due to usage, the accountant
needs to estimate the useful life of the asset. Such an estimate will vary
from accountant to accountant.

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Inability to Capture the Effect of Inflation

Inflation eats up the purchasing power of money. Financial

statements are not adjusted for inflation and hence fail to
reflect the true position and performance of the business.

Inflation is the sustained increase in the price level. For

example, one pen costs Rs. 10 today. After one year, suppose
the price increases to Rs. 11. Now, the same pen cannot be
bought with Rs. 10. It means that the purchasing power of
money has reduced due to increase in price level (inflation).

Example: Suppose, a machine was bought five years ago by

paying Rs. 10,000. Now, definitely, the same machine cannot
be bought with Rs. 10,000. Price of the machine must have
increased. Accounting fails to capture the impact of such
price changes.

25
 Test Your Understanding
Which of the following statements is/are correct?
(I) Accountants record only events measurable in terms of money.
(II) Accountants records some transactions based on estimates.
(III) Financial statements are adjusted for inflation.
A. Only I
B. Only II
C. Only III
D. I & II Only
E. I & III Only
F. None
G. I, II, & III
H. II & III Only

26
Accounting Principles

To make financial statements

comparable, consistent, and uniform
(to the extent possible), it is
absolutely essential to have some
standard set of conventions, rules,
concepts, and procedures.

These conventions, rules,

concepts and procedures are
collectively known as the
“Generally Accepted Accounting
Principles” or GAAPs.

27
Accounting Principles (Contd.)

28
Accounting Concepts

Accounting concepts are the fundamental assumptions that are

followed while preparing the financial statements.

Accounting concepts provide the base for the accounting

process.

The accounting concepts cannot be used according to the

discretion of the accountants. They are compulsory, not
optional.

Accounting concepts are more or less rigid and cannot be

changed or modified as per the whims and fancies of the
accountants.

29
Test Your Understanding

Which of following statements is/are correct?

I. Accounting concepts are the fundamental assumptions made while
preparing financial statements.
II. Applying accounting concepts is mandatory, not optional.
III. Accounting concepts are flexible and can be modified when required.
A. Only I
B. Only II
C. Only III
D. I & II Only
E. I & III Only
F. None
G. I, II, & III
H. II & III Only

30
Accounting Concepts

31
Business Entity Concept
Business entity concept, also known as separate entity concept, states that businessman
(owner) and the business are separate entities.

Following the business entity concept, all the business transactions are recorded from
the point of view of the business and not from the point of view of the businessman.

Due to this reason, capital contributed by the businessman (owner) into the business is
treated as a liability for the business implying that the business has to return the money
to the businessman.

Following the same logic, if the owner draws any asset from the business for his personal
use, such drawing is deducted from his capital implying a reduction in the liability of the
business towards the owner.

32
Test Your Understanding
Which of the following is/are correct?
I. Business entity concept is also known as separate entity concept.
II. It states that businessman and the business are the same.
III. It advocates recording transactions from the point of view of the
businessman.
A. None
B. I only
C. II only
D. III only
E. I & II Only
F. I & III Only
G. I, II, & III
H. II & III Only

33
Money Measurement Concept

Money measurement concept states that only

those transactions which can be measured in
terms of money are to be recorded in the books
of accounts.

According to this concept, if it is not possible to

measure something in terms of money, it will find
no place in accounting.

Money is the common denominator used for

recording all business transactions.

34
Money Measurement Concept (contd.)

Due to this concepts, accounting suffers from two serious limitations:

Qualitative aspects of a transaction, though very important, cannot be

recorded in the books of accounts. For example, if an efficient employee
moves out of an organization, the organization will be adversely impacted by
such an event. But such an event cannot be recorded because it cannot be
measured in terms of money.

Money is assumed to have a static value, which is a highly unrealistic

assumption. The value of money changes with time. However,
accounting ignores the time value of money.

35
A rupee today is more valuable than a rupee a year hence because of
the following three reasons:

Reason 1:

Reason 2:

Reason 3:

Preference of current consumption over future consumption

36
Going Concern Concept
Going concern concept assumes that a business will continue its
operation for an indefinite period of time unless there is a
substantial evidence to the contrary.

Due to the going concern assumption, it makes sense to

invest in assets which will provide benefits for a long period
of time.

If the business is expected to shut down in near future, there is no

point in investing money for buying long-term assets. In such cases,
hiring assets makes much more sense than buying them .

For example, businessmen involved in terminable ventures

prefer to hire assets instead of buying them because such
ventures last for a very short period of time.

37
Accounting Period Concept
Accounting period concept states that the activities of an
entity need to be divided into artificial time periods,
generally as long as a year, but sometimes as short as a
quarter.

Stakeholders of a business want to know the result of the business on a

continual basis. However, the actual result of a business can only be known
when the business stops functioning. A business can continue its operations for
indefinite period of time. The stakeholders cannot wait that long for the
information on how well or how badly the business is performing.

To overcome this problem, the total life span of the

business is divided into smaller periods of equal
duration. Each such period is known as an accounting
period.

38
Test Your Understanding

Correct answer: 2: Business entity concept, also known as separate entity concept,
states that businessman (owner) and the business are separate entities. Therefore,
all the transactions between the owner and the business are to be recorded. The
accountant has rightly treated the indicated transaction as drawings.

Feedback for option 1: Going concern concept assumes that a business will continue
its operation for an indefinite period of time unless there is substantial evidence to
the contrary.
Feedback for option 3: Accounting period concept states that the activities of an
entity need to be divided into artificial time periods, generally as long as a year, but
sometimes as short as a quarter.
Feedback for option 4: Money measurement concept states that only those
transactions which can be measured in terms of money are to be recorded in the
39
books of accounts.
Test Your Understanding

Correct answer: 1: Going concern concept assumes that a business will continue its
operation for an indefinite period of time unless there is substantial evidence to the
contrary.

Feedback for option 2: Business entity concept, also known as separate entity
concept, states that businessman (owner) and the business are separate entities.

Feedback for option 3: Accounting period concept states that the activities of an
entity need to be divided into artificial time periods, generally as long as a year, but
sometimes as short as a quarter.
Feedback for option 4: Money measurement concept states that only those
transactions which can be measured in terms of money are to be recorded in the
40
books of accounts.
Historical Cost Concept
The historical cost concept states that the fixed assets (Property, Plant,
and Equipment, PPE) purchased by a business are to be recorded in the
books of accounts at their historical cost price i.e., the actual price paid
to acquire them.

As accounting is basically recording of past transactions,

accountants use the historical cost as the most objective
measurement of PPE if such a cost is supported by a
documentary evidence.

For example, suppose a plot of land was purchased for Rs.

500,000. The land will appear in the books of accounts at that
figure without considering its market value (fair value) at any
point in time.

The historical cost of an asset does not change. However, its market value keeps
on changing. So, if an asset is maintained at its market value, then the asset
value needs to be adjusted with every change in its market value. Moreover, in
some cases, it may be difficult to determine the market value of an existing asset
objectively.

41
 Rahul Mehta Balance Sheet
(Owner) Liabilities Rs. Assets Rs.

Payable to Rahul 1,00,000 Cash 1,00,000

Contributes Rs. 1,00,000
(Capital)
1,00,000 1,00,000

Balance Sheet
Liabilities Rs. Assets Rs.
Vishal lends Rs. 50,000 to Mehta
Payable to Rahul 1,00,000 Cash (1,00,000 + 50,000) 1,50,000
Stationers (Capital)
Payable to Vishal 50,000
(Creditor)/ Loan from Vishal
1,50,000 1,50,000

42
Dual Aspect Concept
The dual aspect concept states that every
transaction has two-fold effects.

According to this concept, assets of a business

must be equal to the total of capital and liabilities
of the business as on a particular date.

As a business unit is an artificial person, it cannot

generate assets of its own. Now, if a business owns
some assets, it means that those assets must have been
contributed by the owner/s, or by the lenders, or in
combination by both of them.

The contributors of the assets have claims against

those assets. Therefore, it can be said:
Assets = Claims

43
Dual Aspect Concept (contd.)
In the language of accounting, owner’s claim against the assets
is known as the capital and outsiders’ claim against the assets
is known as the liabilities. Therefore, it can be said that:
•Assets = Owner’s claim + Outsiders’ claim
•Assets = Capital or owner’s equity + Liabilities

The above equation is known as the accounting equation

which is the base for the double entry accounting. The essence
of double entry accounting is that every time a transaction
occurs there are always two-fold effects.

For example, suppose a business unit borrows Rs. 1,00,000

from a bank. Due to this transaction, the assets (i.e., cash) of
the business will increase by Rs. 1,00,000 and the liabilities
(i.e., bank loan) of the business will also increase by Rs.
1,00,000.

44
Balance Sheet Equation or Accounting Equation

Assets = Claims

Assets = Owners’ Claims + Outsiders’ Claims

Assets = Owners’ Equity + Liabilities

Or Capital

45
 Accounting Equation
Transactions Assets = Liabilities + Capital
Cash + Stock + Debtors + Furniture = Creditors + Capital
(i) 80,000 = 80,000
(ii) 20,000 20,000
Balance 80,000 + 20,000 = 20,000 + 80,000
(iii) -2000 -2000
Balance 78,000 + 20,000 = 20,000 + 78,000
(iv) -15,000 20,000 5,000
Balance 78,000 + 5,000 + 20,000 = 20,000 + 83,000
(v) -1,500 1,500
Balance 76,500 + 5,000 + 20,000 + 1,500 = 20,000 + 83,000
 to be paid at a

Note: Cheque referred in transaction (ix) was deposited into the bank the same day.

Solution

Solution
 Accounting Equation
Transactions Assets = Liabilities + Capital
Cash + Stock + P&M + Bank + Furniture + Debtors = Creditors + Capital
(i) 8,00,000 + 50,000 = 8,50,000
(ii) -15,000 3,00,000 2,85,000
Balance 7,85,000 + 50,000 + 300000 = 2,85,000 + 8,50,000
(iii) -6,00,000 6,00,000
Balance 1,85,000 + 50,000 + 300000 + 600000 = 2,85,000 + 8,50,000
(iv) -1,00,000 1,00,000
Balance 1,85,000 + 50,000 + 3,00,000 + 500000 + 1,00,000 = 2,85,000 + 8,50,000
(v) -80,000 1,15,000 35,000
Balance 1,05,000 + 1,65,000 + 3,00,000 + 5,00,000 + 1,00,000 = 3,20,000 + 8,50,000
(vi) 60,000 -45,000 15,000
Balance 1,65,000 1,20,000 + 3,00,000 + 5,00,000 + 1,00,000 = 3,20,000 + 8,65,000
(vii) -80,000 1,25,000 45,000
Balance 1,65,000 + 40,000 + 3,00,000 + 5,00,000 + 1,00,000 + 1,25,000 = 3,20,000 + 9,10,000
(viii) -35,000 -35,000
Balance 1,65,000 + 40,000 + 3,00,000 + 4,65,000 + 1,00,000 + 1,25,000 = 2,85,000 + 9,10,000
(ix) 75,000 -75,000
Balance 1,65,000 + 40,000 + 3,00,000 + 5,40,000 + 1,00,000 + 50,000 = 2,85,000 + 9,10,000
(x) -25,000 -25,000
Balance 1,40,000 + 40,000 + 3,00,000 + 5,40,000 + 1,00,000 + 50,000 = 2,85,000 + 8,85,000

Problem

Problem
Revenue Recognition Concept

The revenue recognition concept states that

revenue should be recognized when it is earned,
not when it is received.

This concept can better be understood

with the help of an example.

Suppose a business firm gets an order for

supplying goods on 1st April and delivers the
goods on 10th May and receives the payment on
20th July.

In this case, revenue was earned on 10th May

when goods were delivered to the customer.
Therefore, revenue should be recognized on 10th
May.
49
Revenue Recognition Concept

There are some exceptions to this revenue recognition rule. For

example, in case of a long-term contract work-in-progress,
revenue is recognized before the completion of the project on
the basis of the proportionate work completed by the end of the
accounting period.

50
Matching Concept
The matching concept states that the expenses for an accounting
period should be compared against the revenues of the same
accounting period to determine the profit or loss for the same
accounting period.

This concept can better be understood with the help of an example.

Suppose a business firm has taken an insurance policy on 1.4. 2024
by paying an annual premium of Rs. 12,000. Also suppose that the
accounting period ends on 31.12. 2024.

For determining the profit or loss for the year 2024, only Rs. 9,000
(i.e., Rs.12000 x 9 months/12 months) should be treated as expense,
not the whole insurance premium of Rs. 12,000.

If the whole Rs. 12,000 is treated as the expense, it would be a

mismatch because Rs. 3,000 (i.e., Rs. 12,000 x 3 months/12 months)
out of Rs. 12,000 belongs to 2025 and should not be deducted from
the revenue of 2024.

51
Accrual Concept

The accrual concept states that revenues should be recognized

when they are earned irrespective of the fact whether cash is
received or not and expenses should be recognized when they are
incurred irrespective of the fact whether cash is paid or not.

This concept can better be understood with the help of an

example.

Let us consider an example with respect to an expense. Suppose, a

company pays December’s salary to its employees in the first week
of January. As on the last date of December, salary expense is
incurred (i.e., due for payment) and should be recognized as an
expense though it is not paid.

52
Exercise

Correct answer: 3

53
Explanation

54
Accounting Conventions

Accounting conventions are generally accepted

principles, practices, or guidelines that have developed
based on usage, customs, or general agreements.

Unlike accounting concepts, accounting conventions are not rigid

or may not be established by laws. Therefore, accounting
conventions can be modified based on the requirements if such
modifications are justified.

While following the accounting conventions, accountants often

apply their personal judgments and therefore accounting
conventions followed in different organizations may vary.

55
Accounting Conventions (contd.)

Accounting
Conventions

56
Full Disclosure Convention
According to the full disclosure convention, all
significant information relating to financial
transactions of an organization should be fully
disclosed.

The full disclosure convention is followed to ensure that the

financial statements disclose all relevant information. Due to
this reason, the formats and the content of the financial
statements are prescribed by the regulatory authorities.

Sometimes, some items may not find place in the financial

statements even though they are important. Such items are
disclosed in the footnotes to the financial statements. For
example, contingent liabilities are disclosed in the footnotes to
the financial statements.
Soccer ball

57
Consistency Convention
According to the consistency convention, the accounting policies and
methods adopted in one year should be consistently followed year
after year unless there are valid reasons to change them.

The consistency convention is followed to make

comparison of financial statements (inter firm and intra
firm) more meaningful.

Example, there are various methods for charging depreciation on

fixed assets. Now, once a method of charging depreciation is
selected, the same method should be used year after year to
maintain consistency.

As consistency is a convention, it may not be strictly followed.

Therefore, if it is justified to change a method for the better
measurement of performance of a business, the method can be
changed. However, proper note should be given in the financial
statements indicating the reasons for the change.Soccer ball

58
Conservatism/Prudence Convention
According to the conservatism convention, all
probable future losses should be accounted
for, but probable future gains should not be
accounted for.

Provisions for expected losses should be

made in advance so that if actually losses
occur, such losses can be taken care of.

Example, a business firm often creates

provisions for doubtful debtors so that if they
actually do not pay, then such loss can be
adjusted against the provision.

One more instance of conservatism

convention is observed in the valuation of
closing stocks. Closing stocks are valued at Soccer ball

cost or market price which ever is lower.

59
Materiality Convention

According to the materiality convention, all material items should be

disclosed separately in the financial statements and all the immaterial and
insignificant items should be merged with material items while disclosing
them in the financial statements.

According to the American Accounting Association (AAA), “An item should

be regarded as material if there is reason to believe that the knowledge of
it would influence decision of informed investor.”

Materiality is a relative concept because what is material for one business

may not be material for another business. Example, an item costing Rs.
1,000 may be material for a small business while the same item may not
be material for a very big business.

As materiality is a convention, it is not rigid. Accountants need to apply

their personal judgments to decide regarding the materiality of an item.
Soccer ball Soccer ball

60
Exercise

Correct answer: 3: According to the conservatism convention, all probable future

losses should be accounted for, but probable future gains should not be accounted
for.
Feedback for option 1: According to the materiality convention, all material items
should be disclosed separately in the financial statements and all the immaterial and
insignificant items should be merged with material items while disclosing them in
the financial statements.
Feedback for option 2: According to the consistency convention, the accounting
policies and methods adopted in one year should be consistently followed year after
year unless there are valid reasons to change them.

Feedback for option 4: According to the full disclosure convention, all significant
information relating to financial transactions of an organization should be fully
61
disclosed.
Exercise

1. Materiality Convention
2. Consistency Convention
3. Conservatism Concept
4. Full Disclosure Convention

Correct answer: 1: According to the materiality convention, all material items should
be disclosed separately in the financial statements and all the immaterial and
insignificant items should be merged with material items while disclosing them in
the financial statements.
Feedback for option 2: According to the consistency convention, the accounting
policies and methods adopted in one year should be consistently followed year after
year unless there are valid reasons to change them.
Feedback for option 3: According to the conservatism convention, all probable
future losses should be accounted for, but probable future gains should not be
accounted for.
Feedback for option 4: According to the full disclosure convention, all significant
information relating to financial transactions of an organization should be fully
62
disclosed.
Exercise

Correct answer: 2: According to the consistency convention, the accounting policies

and methods adopted in one year should be consistently followed year after year
unless there are valid reasons to change them.
Feedback for option 1: According to the materiality convention, all material items
should be disclosed separately in the financial statements and all the immaterial and
insignificant items should be merged with material items while disclosing them in
the financial statements.
Feedback for option 3: According to the conservatism convention, all probable
future losses should be accounted for, but probable future gains should not be
accounted for.
Feedback for option 4: According to the full disclosure convention, all significant
information relating to financial transactions of an organization should be fully
disclosed.
63