Documentos de Académico
Documentos de Profesional
Documentos de Cultura
IFRS GAP
Requires component dep: ex machines with bldg. Permits comp dep but does not require
Interest accrued during construct cap long liv asst Goodwill excess purchase price over fair value
Investment prop: rental inc/held for capital appr Interest acrued during constr be capt long lvd ast
Disclose circumstances for write downs Issuance of stock+div pay are financing cash flow
Change in acctg principle restate all periods fin st Interest payment operating
Cannot revaluate above deprecated cost Acquisitions, divestures, investments in joint are
Interest payment operating or financing investing cash flows
Infrequent/unusual =expropriation Bond coupon paid is operating
Ifrs allows enacted or substainacially enacted tax Bond discount paid at mat is financing
Interest paid & div receivd operating or investing Chang actg principle restate all periods fin state
Extraordinary/infrequent/unusual=expropriation
Deferred taxes as enacted tax rate
Div receiv, interest paid operating cash
R&D are expensed
Data collection: taking financial statements site visits and producing organized fin statements
Data analysis: adjusted financial statements: common size, ratios, graphs, forecast
Analyzing interpret: use to answer the objective
Cash flow earnings index: cashflow/NI greater than one means higher earnings supportable to its perf
-unrealized gains and losses for held for trading securities & are reported in the income statement but
unrealized gains and losses on available for sale securities are reported in other comprehensive income
, dividends from all investments should be included in pre tax income
Held to maturity amortized cost on balance sheet, interest, realized g/l on income statement
Actively traded securites reported on income statement
Other comprehensive income: unrealized gains and losses on available for trade securities,
foreign currency translation, minimum pension liability adjustments, derivatives used for hedge
Financial statement analysis: use of information from a company fin statements to make economic deci
Financial report/standards : reports and presentations that company uses to show to investors, creditors
etc. Limit the range of presentation formats and accounting methods but do not require all firms to use
same format or methods.
FCFF: CFO + Int(1-tax rate) – fixed capital expenditures int=cash pid for interest
Operating lease: does not require a liability to be recognized on balance sheet, debt to equity and debt
to assets are lower. Earnings before interest and taxes are lower in early years because expense.
Lowers interest coverage ratio
Finance lease lowers net income, higher debt to capital, lower roe
Finance lease: princip portion outflow from financing, operating: entire payment CFO outflow
Standard setting bodies encourage direct, indirect shows methods of movement of cash
Using straight line dep for reporting and accelearated tax results in DTA
Deffered tax assets gains that are taxable before they are cognized on income statements,
Deffered tax liabilities result from gains that are recognized in the income statement before they
are tax deductible.
Deffered tax asset: losss that are recognized In the income statement before they are tax deudc
Increase in tax rate increases both DTA and DTL
Valuation allowances occur when probability of utilizing deffered tax assets is in doubt ,
deferred tax assets must be reduced by valuation allowances to reflect probability that they will
never be used
Net income from municipal bonds is a permanent difference
Extraordinary item is reported net of tax, 40% tax , 12,000 extra/ .6 = 20,000 = prem-20k
To adjust cgs from lfo to fifo subtract change in lifo reserve over period
Proxy statement: contains info about management and board member compensation, conflicts of intrst
Inventory costs: allocation of fixed production overhead based on normal production is included in
inventory cost. No storage or shipping is included in inventory cost.
Acruals: ex A company fails to accrue wages for December that will be paid in January, year end balance
sheet liabilities
Over states net income and owner equities, liabilities understated. Expenses incurred already
Accrued revenue is an asset , unearned revenue is a liability
Bonds
Discount if market rate > coupon rate. Amortization of discount added to interest expense
making reported expense greater than coupon of 12 million (200 mill x 6%)
ENACTED??
LIFO Liquidation: causes old inventory to be sold that was accumulated at a lower costs, decreasing
COGS as a percentage of sales. Lower COGS as a percentage of sales will result in higher gross profit as a
percent of sales.
A decrease in a firms bond rating will increase the required yield on the debt and decrease market value.
A decrease in market value of debt will decreae the firms reported debt to asset ratio. A decrease in
balance sheet liabilities will increase equity as long as other assets are unchanged.
Issuing common stock increases shareholders equity, dividends received are retained earnings, realized
gains are also net income,
Stumping questions:
In 2009 the tax rate increases from 35% to 50% pickets income tax expense for 2009 is closest to?