subject: GE' s Disclosure Note 1 and SEC' s Plain English Rule [print this page] GE' s Disclosure Note 1 and SEC' s Plain English Rule
GE's notes to their consolidated financial statements follow the plain English rule very well. They did not utilize a lot of legal jargon or technical terms in the disclosure notes, therefore someone who is not familiar with GE' s industry is able to read and comprehend the ideas being presented. Some of the technical terms that were used were explained in a simplistic manner allowing the reader to still understand the main ideas of the first disclosure note. Occasionally GE does not use simple everyday language. On page 66 of disclosure note one, "Certain of our sales of goods and services involve inconsequential or perfunctory performance obligation." This sentence could easily be simplified by removing using only inconsequential or perfunctory instead of including both words in the sentence. This type of error can be found infrequently scattered throughout the document. If GE were to go back and make some small changes regarding that matter it would cut down the size of the document and make it simpler to read.
Another way GE utilized the plain English rule was through usage of bullet points and clear headings for each topic. For example on page 69 GE uses bullet points to describe the principle changes to the impairment model, and on page 72 bullets are used to describe amendments made to ASC 805. This is a good integration, but there are other sections that could have utilized bullet points to make the disclosure easier for readers.
The document could have been also been improved if GE utilized subheadings for the longer sections of note one. For example the "sale of goods and services" section is roughly 8 paragraphs long. This section could be friendlier for readers by utilizing subheadings that would allow readers to extract desired information out of the sales section. Some subheadings could include revenue recognition points and break up this long section a bit. Dividing up a longer section will make it easier for readers to identify key points.
For the most part GE utilizes language that is easily understood by most people who are unfamiliar with the industry. The language and sentence structure is simple enough to understand the major points of the disclosure document and the document is broken up into clearly defined topics. Even though GE follows most of the plain English rule guidelines there improvements can be made. Some areas of the document are lengthy and utilized wordy jargon, this elimination will improve document length and simplicity. Also sub headings would greatly break up the length of the disclosure notes, assisting readers to understand the main points of each section. However, GE does a good job of applying the plain English rule throughout the document and helping readers understand the key changes and ideas surrounding it's financial statements.
