In the following paragraphs we examine each of the elements of the
balance sheet, introduce the accounting principles currently being used
in measuring these elements, and discuss how they are disclosed on the
balance sheets of Hershey’s and Tootsie Roll illustrated in Exhibits 7.1
and 7.2 on pages 2 1 6—2 1 8. It is important to recognize that the financial statement elements reported in balance sheets are categorized according to the concept of managerial intent that is, how management intends to use the item in question. Accordingly, virtually every element disclosed under the various balance sheet subsections might be disclosed under a different category under different circumstances. The measurement issues for each of the balance sheet elements are discussed in greater depth in subsequent chapters.