case for the five non-U.S. firms in our survey. Some firms prepare financial state-
ments that conform to accounting standards more widely accepted than domestic
standards (primarily IAS or U.S. GAAP), or that conform both to domestic standards
and to a second set of accounting principles.
Exhibit 13.10 shows that Fiat, Hyundai, Toyota, and Volkswagen all provide spe-
cial disclosures for nondomestic users. Jiangling does not, consistent with its limited
international capital market geographic activities. (However, Jiangling does prepare
financial statements in conformance with IAS, which might be viewed as an accom-
modation.) For example, Fiat, Hyundai, and Toyota provide many of their financial
results in both domestic currency and U.S. dollars. Fiat provides a detailed reconcil-
iation between key financial statement items as reported in its financial statements
and what those amounts would be under U.S. GAAP as required in its annual report
on Form 20-F filed with the SEC. Refer to Exhibit 13.13 for Fiat’s footnote disclo-
sure of reconciliation to U.S. GAAP from its December 31, 2001, Form 20-F.
13.8 DISCLOSURE OF FORWARD-LOOKING INFORMATION. Corporate disclo-
sures of forward-looking information vary dramatically within and across national
jurisdictions, reflecting differences in regulatory requirements and, more importantly,
managers’ voluntary disclosure incentives. Exhibit 13.14 presents results from a sur-
vey of forward-looking disclosures made in 1993/94 annual reports by 200 large
companies from France, Germany, Japan, the United Kingdom, and the United
States.^31 As shown in the exhibit, relatively more French and German companies dis-
closed quantitative forecasts of earnings and sales than did U.K. and U.S. companies,
reflecting the less stringent legal and regulatory climates in France and Germany.^32
13.8 DISCLOSURE OF FORWARD-LOOKING INFORMATION 13 • 23Exhibit 13.11. (continued)
Other information
(30) Cash flow statement
The cash flow statement comprises only Cash and cash equivalents shown in the bal-
ance sheet.
Cash flows for the 2001 financial year with prior year comparatives are presented in
the cash flow statement analysed into cash inflows and outflows from operating activi-
ties, investing activities and financing activities. The cash effects of changes to the scope
of consolidation and exchange rate changes are shown separately in the statement.
The change in Cash and cash equivalents from changes in consolidation relates to
companies consolidated for the first time that were recorded at cost in previous years.
Cash flows from investing activities include additions to Tangible assets and long-term
financial assets as well as to Capitalized development costs. The changes in Leasing and
rental assets and in Financial services receivables are also shown here.
Cash flows from financing activities include outflows of funds resulting from dividend
payments and redemption of bonds as well as inflows from the Issue of bonds and from
the change in other financial liabilities.(^31) Frost and Ramin (1997).
(^32) U.S. managers long have argued that disclosure of forward-looking information exposes them to
legal and regulatory risk if their forecasts turn out to be inaccurate. In the United Kingdom, the Financial
Services Act creates legal liability for managers responsible for untrue or misleading statements in list-
ing particulars or prospectuses. See Frost (2002) for detailed discussion and evidence.