Financial statements: Uses and limitations of valuation

In the last instalment of a three-part series on financial literacy, SMU Dean of Postgraduate Professional Programmes and Associate Professor of Accounting (Practice) Themin Suwardy, NUS Associate Professor of Accounting Edmund Keung and SIT Associate Provost and Professor of Accounting Ho Yew Kee discussed the uses and limitations of valuation in financial statements. They concluded that while financial statements provide critical information in the valuation of assets, liabilities and the company as a whole, financial statements can be misused if there is a lack of understanding of the assumptions and premises in which the numbers were created.