Answer
Four of the mandatory disclosure items include lease contracts, debt obligations, stock option plans, and pension arrangements in the financial statements. These items should be disclosed because they are very sensitive and have a long-term effect in nature. Moreover, they may significantly affect the business entities’ cash flows as well as normal operations.
Work Step by Step
For instance, failing to report on general debt obligations may keep stakeholders in the dark, and this may affect the way they are able to manage and run the organization. Moreover, this may cause a conflict between stakeholders and managers.
