| 2299490446 | Financial reporting standards characteristics | Relevance
Faithful | | 0 |
| 2479058081 | Relevance/Faithful Enhancers | Comparability.
Verifiability.
Timeliness.
Understandability. | | 1 |
| 2486134358 | Coherent Financial Reporting Framework characteristics | Transparent
Comprehensive
Consistent | | 2 |
| 2475214462 | General Journal | List of all journal entries in chronological order | | 3 |
| 2475216460 | General Ledger | Sorts general journal entries by account | | 4 |
| 2299493411 | Basic EPS | (NI - preferred dividends)/weighted avg # of shares | | 5 |
| 2618907609 | Treasury Stock Method | [Avg Stock Price - Strike Price/Avg Stock Price] * # of shares | | 6 |
| 2299498910 | Anti-dilutive debt check | if (ConvDebtInterest*(1-t)/ConvDebtShares) > Basic EPS | | 7 |
| 2299508519 | Held-to-Maturity Securities | Recognized at amortized cost.
Unrealized gains/losses not reported.
Realized gains/losses reported income statement | | 8 |
| 2299513374 | Held-for-Trading Securities | Recognized at Fair Value .
Realized and Unrealized gains/losses reported on income statement. | | 9 |
| 2299513375 | Aviailable for Sale Securities | Recognized at Fair Value.
Unrealized gains/losses reported in equity (other comp income).
Realized gains/losses reported in income statement | | 10 |
| 2299519987 | Shareholders equity components | Contributed capital.
Preferred stock.
Noncontrolling interest.
Retained earnings.
Treasury stock (reduces share equity).
Accumulated other comp. income. | | 11 |
| 2553989975 | Comprehensive Income | Net Income + Other Comprehensive Income | | 12 |
| 2553990966 | Other Comprehensive Income | Foreign currency gains and losses.
Unrealized gains and losses from hedging derivatives.
Unrealized gains and losses from available for sale securities.
Pension liability adjustments. | | 13 |
| 2648532470 | Change in Stockholders' Equity | NI - dividends + contributed capital + accum other comprehensive income | | 14 |
| 2564847200 | Long-Term Contract: Unreliable Project Outcome (IFRS) | Revenue recognized to extent of costs.
Costs expensed as incurred
Profit recognized at completion. | | 15 |
| 2564857521 | Long-Term Contract: Unreliable Project Outcome (GAAP) | Completed Contract Method.
Revenue, expenses, and profit recognized only when contract is complete.
Expected losses recognized immediately | | 16 |
| 2652878043 | Uncertain Collectibilty: Cost recovery | Profit recognized to after costs are covered by cash collections | | 17 |
| 2564871355 | Installment Method | Occurs when firms expects payments over an extended period time
Collectability is not reasonably estimated
Recognize profit as proportion of cash collected multiplied by total expected profit. | | 18 |
| 2299526398 | Cash Flow Type: IFRS interest and dividends received | CFO/CFI | | 19 |
| 2299528735 | Cash Flow Type: GAAP interest and dividends received | CFO | | 20 |
| 2299529454 | Cash Flow Type: IFRS interest and dividends paid | CFO/CFF | | 21 |
| 2299532322 | Cash Flow Type: GAAP interest paid | CFO | | 22 |
| 2299532977 | Cash Flow Type: GAAP dividends paid | CFF | | 23 |
| 2326976096 | CFF (dividend formula) | CFF = -dividend declared + increase in dividend payable | | 24 |
| 2591593891 | CFO (indirect components) | + depreciation/amortization
- gains/+ losses on sale of fixed assets
+ increases in liabilities
- increases in assets | | 25 |
| 2527018250 | Reinvestment Ratio | CFO/cash paid for fixed assets | | 26 |
| 2475208928 | Extraordinary Items (GAAP vs IFRS) | GAAP: Unusual and infrequent items
IFRS: No extraordinary items | | 27 |
| 2411228895 | COGS | Beg Inventory + Purchases - End Inventory | | 28 |
| 2410943270 | Cash paid to supplier | COGS + Increase in Inventory + Decrease in Payables | | 29 |
| 2410944708 | Cash collections | sales - increase in receivables | | 30 |
| 2410924595 | FCFF (from Net Income) | NI
+ Depreciation/Amortization
+ Interest Expense * (1-t)
- Net Capex
- Working Cap Investment | | 31 |
| 2410931684 | FCFF (from CFO) | CFO
+ Interest Expense * (1-t)
- Net Capex | | 32 |
| 2628127130 | Net Capex | Purchased equip - proceeds from sold equipment (not carrying value) | | 33 |
| 2410935593 | FCFE | CFO
- Net Capex
+ Net Borrowing
Note: For IFRS firms including dividends in CFO, add back into FCFE | | 34 |
| 2410913035 | Dividend Declared | Beg Retained Earnings + NI - End Retained Earnings | | 35 |
| 2299538629 | Ending inventory | Beginning Inventory + Purchases - COGS | | 36 |
| 2299542127 | LIFO (COGS and value under rising prices) | Higher COGS.
Lower inventory value.
Less likely to write down inventory under LIFO. | | 37 |
| 2299544618 | Inventory measurement: IFRS | lower of cost OR net realizable value (sales price - selling/completion costs) | | 38 |
| 2299547089 | Inventory measurement: GAAP | lower of cost OR market (replacement cost)
if replacement cost is greater than NRV, use NRV as market.
Market cannot exceed NRV or be less than NRV minus normal profit margin | | 39 |
| 2299550911 | LIFO vs FIFO under rising purchase/production costs(Profitability, Liquidity, Activity, and Solvency) | Higher COGS.
Lower inventory value.
Lower asset value (current ratio and working capital).
Higher inventory turnover.
Lower equity.
Higher debt ratio and debt-to-equity. | | 40 |
| 2299562196 | Capitalization vs Expense (cash flow impact) | Capex = CFI outflow
Expense = CFO outflow | | 41 |
| 2299566137 | Capitalization vs Expense (profitability impact) | Higher assets.
Higher net income initially.
Higher equity.
Higher ROA/ROE initially.
Lower debt ratios.
Lower CFI/Higher CFO, but no impact on total cash flow | | 42 |
| 2619699549 | Capitalized Interest | Capitalized when interest costs are allocated to own construction project
Income earned from temporarily investing borrowed funds:
IFRS - income earned reduces interest eligible for capitalization
GAAP - no reduction in capitalized interest | | 43 |
| 2299571188 | GAAP impairment criteria and measurement | Criteria: carrying value > asset's undiscounted future cash flows.
Measurement: write down asset to fair value, recognize loss equal to excess carrying value over fair value (or discounted cash flows if unknown).
No annual test, only as needed. | | 44 |
| 2299575504 | IFRS impairment criteria and measurement | Criteria: carrying value > recoverable amount (greater of fair value - selling costs OR Value in Use).
Measurement: write down asset to recoverable amount, recognize loss equal carrying value - selling costs.
Annually tested | | 45 |
| 2593071849 | IFRS PPE Disclosure | Useful lives or depreciation rate
Disposals
Reconciliation of beginning/ending carrying value
More extensive reporting than GAAP | | 46 |
| 2593073023 | IFRS Intangible Asset Disclosure | Required:
Impairment loss
Amortization rate
Not Required:
Fair Value | | 47 |
| 2303575299 | Accelerated Depreciation vs Straight Line | Higher depreciation initially.
Lower Net Income initially.
Lower ROA and ROE initially. | | 48 |
| 2299582552 | Derecognition: Sold and Abandoned Assets | Sold Asset: carrying value - selling price recognized on income statement.
Abandoned Asset: carrying value recognized as loss. | | 49 |
| 2299584723 | Revaluation (IFRS) | Assets reported at fair value revalued for market adjustments.
Fair value < historical cost recognized as loss on income statement (subsequent upward valuations recognized as gains).
Revaluation surplus of fair value > historical cost recognized in shareholder equity.
Revaluation above historical cost has no impact on net income (revaluation surplus in shareholder equity) | | 50 |
| 2303594021 | Investment Property Fair Value Model (IFRS only) | Investment property accounted for by fair value.
Unrealized gains and losses recognized on income statement | | 51 |
| 2303463649 | CFO relation to balance sheet | current assets and current liabilities | | 52 |
| 2303469317 | CFI relation to balance sheet | non-current assets | | 53 |
| 2303469318 | CFF relation to balance sheet | non-current liabilities and equity | | 54 |
| 2303501409 | Expensed inventory costs | abnormal waste.
storage costs.
admin overhead.
selling costs. | | 55 |
| 2303502558 | Capitalized inventory costs (included on balance sheet) | Purchase costs.
Conversion costs.
Other costs to bring inventory to current state and location. | | 56 |
| 2303529596 | Inventory Management: Low Inventory Turnover | slow-moving or obsolete inventory | | 57 |
| 2303534632 | Inventory Management: High Inventory Turnover/Low Sales Growth | inadequate inventory levels and lost sales from unfilled orders | | 58 |
| 2303537066 | Inventory Management: High Inventory Turnover/High Sales Growth | Greater efficiency | | 59 |
| 2303566654 | Intangible Assets: Finite Lived | Amortized over life of asset | | 60 |
| 2303568507 | Intangible assets created internally | Generally expensed as incurred with exceptions.
GAAP: R&D expensed.
IFRS: Research expensed, Development capitalized | | 61 |
| 2303331039 | Deferred tax liability (conditions) | income tax expense > tax payable
pretax income > taxable income
carrying value of asset > tax base
Treated as equity if not expected to reverse | | 62 |
| 2410865772 | Tax Expense > Taxes Payable | DTL | | 63 |
| 2410866988 | Carrying Value of Asset > Tax Base of Asset | DTL | | 64 |
| 2303618416 | Income tax expense | income tax expense = taxes payable + ΔDTL - ΔDTA. | | 65 |
| 2303626547 | Valuation allowance (impact) | Used as contra account to reduce DTA value.
Increase income tax expense, reduce earnings | | 66 |
| 2303645687 | Impact of Tax Rate Increase | Increase in DTL added to taxes payable.
Increase in DTA is subtracted from taxes payable. | | 67 |
| 2411250697 | Deferred Taxes (GAAP vs IFRS) | GAAP: current or non-current depending on underlying asset/liability
IFRS: non-current | | 68 |
| 2486629817 | Indefinite Reversal Criteria (GAAP) | Criteria that determines if undistributed profits from a subsidiary require a DTL (GAAP only) | | 69 |
| 2303665465 | Premium Bond | Coupon Rate > Market Yield
Coupon Payment > Interest Expense
Bond liability and interest expenses decrease over time as premium is amortized (lower interest expenses, higher equity, lower debt/equity relative to Par value) | | 70 |
| 2303677182 | Cash Flow Type: Bond issue proceeds (GAAP) | CFF | | 71 |
| 2303678359 | Cash Flow Type: Bond coupon payments (GAAP) | CFO | | 72 |
| 2303679052 | Par Bond | Market Rate = Coupon Rate.
PV of coupon payments + PV face value = Par Value | | 73 |
| 2303693529 | Premium Amortization | Coupon Payment - Interest expense | | 74 |
| 2303703386 | Bond Redemption (GAAP vs IFRS) | Gain/loss = book value of bond liability - redemption price.
GAAP: remaining unamortized issuance costs written off and included in gain/loss.
IFRS: no write off (issuance costs included in book value). | | 75 |
| 2533709367 | Finance Lease (lessor treatment of asset) | Asset removed from balance sheet
Lease receivable created | | 76 |
| 2533720519 | Finance Lease (lessee treatment of asset) | Lower of asset fair value OR PV of future lease payments recognized as asset and liability
Asset depreciated, interest expense recognized
GAAP: Principal portion in CFF, Interest paid in CFO | | 77 |
| 2303724408 | Finance Lease Criteria (GAAP) | 1. Title to the leased asset is transferred to the lessee at the end of the lease period.
2. A bargain purchase option exists.
3. The lease period is 75% or more of the asset's economic life.
4. The present value of the lease payments is 90% or more of the fair value of the leased asset. | | 78 |
| 2303766541 | Cash Flow Type: Finance Lease (lessee perspective) | Interest expense: CFO outflow.
Principal reduction: CFF outflow | | 79 |
| 2303771131 | Cash Flow Type: Finance Lease (lessor perspective) | Interest income: CFO inflow.
Principal reduction: CFI inflow | | 80 |
| 2475234089 | Lease Disclosure (GAAP/IFRS) | Disclose minimum lease payments for next five years AND sum of lease payments more than five years out | | 81 |
| 2303782595 | Sales-type lease | Gross profit (PV of lease payments - COGS) recognized at inception, interest income over life of lease | | 82 |
| 2303795798 | Finance Lease vs Operating Lease (balance sheet, income, and cash flow impacts) | Higher Assets
Higher Liabilities
Higher leverage ratios.
Lower working capital (principal due is current liability).
Higher EBIT.
Lower Net Income initially (depreciation reduces interest expense over time.
Higher CFO.
Lower CFF | | 83 |
| 2533843365 | Finance Lease Ratio Impact | Lower Current Ratio
Lower Working Capital
Lower Asset Turnover
Lower ROA and ROE initially
Higher Debt/Equity Debt/Assets | | 84 |
| 2303841513 | Direct financing lease (lessor perspective) | Lessor removes asset from balance sheet and creates lease receivable.
Interest income recognized on lease receivables.
Higher Net Income initially (relative to operating lease) due to declining interest payments | | 85 |
| 2303902898 | Defined Benefit Pension Components (IFRS) | Service (+past service) Costs (Pension Expense).
Net interest expense (Pension Expense).
Remeasurements (Other Comp Income) - actuarial gains and losses between actual return and expected return. | | 86 |
| 2303916256 | Defined Benefit Pension Components (GAAP) | Service Costs (Pension Expense).
Net interest expense (Pension Expense).
Expected return on plan assets (Pension Expense).
Past Service Costs (Other Comp Income) - changes to defined benefit terms increase future benefits to prior employees.
Remeasurements (Other Comp Income) - actuarial gains and losses between actual return and expected return. | | 87 |
| 2303935872 | Quality of reported earnings | Level of earnings.
Sustainability of earnings. | | 88 |
| 2303945273 | Conditions to produce low quality financial reports | Motivations.
Opportunities.
Rationalization | | 89 |
| 2303958091 | Accounting warning signs | Lower receivable turnover.
Lower asset turnover (especially with growing company).
Lower inventory turnover.
LIFO liquidation | | 90 |
| 2303986046 | Credit analysis categories | Scale and diversification.
Operational efficiency.
Margin stability.
Leverage | | 91 |
| 2303991049 | LIFO to FIFO conversion | Ending inventory + LIFO reserve.
COGS - Change in LIFO reserve
GAAP change in inventory applied prospectively, with explanatory footnote | | 92 |
