ANALYSIS OF THE INCOME STATEMENT
|
|
- Constance Riley
- 5 years ago
- Views:
Transcription
1 ANALYSIS OF THE INCOME STATEMENT 1. INTRODUCTION The income statement shows the calculation of a company s profit over a period, such as a quarter or a year. A company s profit (also known as net income ) is the difference between its revenue and expenses. However, both revenue and expenses are calculated in accordance with given accounting guidelines (U.S. GAAP and IFRS), and often managerial judgement must be used in the profit calculation. The typical income statement format will show sales, direct costs of delivering goods or services (known as cost of sales or cost of goods sold ), gross profit (sales minus direct costs), operating expenses (known as selling, general, and administrative expenses), operating income (gross profit minus operating expenses), interest expense, and taxes. A company may also have certain gains, losses, or expenses deemed nonoperating and nonrecurring, which will be shown net of tax below the tax expense line. The difference between revenue and all expenses is the company s net income, and is often referred to as the company s bottom line due to its position on the last line of the income statement. This income statement format just described is referred as a multi-step format, because its presents gross profit as a subcategory. 2. REVENUE RECOGNITION 2.1. General Guidelines In May 2014, the FASB and the IASB issued nearly identical revenue recognition guidelines. Since the implementation of these new standards is not required until January 1, 2018 (IFRS) and December 15, 1
2 2017 (U.S. GAAP), I will begin this section with a discussion of current U.S. GAAP and IFRS revenue recognition guidelines, followed by a discussion of the new standards. Companies reporting revenue under U.S. GAAP can recognize revenue when that revenue is realized or realizable and earned i. Further guidance on revenue recognition from the SEC identifies four criteria which must be met before revenue can be recognized: (1) there must be evidence of an arrangement between the buyer and seller, (2) the product has been delivered or the service has been rendered, (3) the price is determined or determinable, and (4) payment for goods or services is reasonable assured ii. Current IFRS provides different general guidelines for recognizing revenue from the sale of goods and recognizing revenue from providing services iii. For the sale of goods, the following conditions are met: (1) the risks and rewards of ownership have been transferred to the buyer, (2) the seller retains neither involvement nor control over the goods being sold, (3) revenue can be reliably measured, (4) the seller expects to receive economic benefits from the transaction, and (5) the transaction s costs can be reliably measured. For the sale of services, the following conditions must be met: (1) revenue can be reliably measured, (2) the economic benefits of the transaction flowing to the entity are probable, (3) the transaction s stage of completion can be reliably measured, and (4) the incurred costs of the transaction and the completion costs of the transaction can be reliably measured Special Circumstances In certain instances, revenue recognition can be ambiguous. Three circumstances where revenue can be particularly difficult to determine are long-term service contracts, sales made in installments, and sales paid for via barter. 2
3 Long-Term Contracts Often a company will provide a service under a contract whose term exceeds one accounting period. Such a contract is called a long-term contact and is considered a special case for revenue recognition purposes. Under U.S. GAAP, a company may account for long-term contracts using either the percentage-ofcompletion method, or the completed contract method. For IFRS, however, only the percentage-ofcompletion method is allowed. When the outcome of a contract can be reliably measured, the company must use the percentage-ofcompletion method. Under the percentage-of-completion method, a company recognizes revenue and profit in proportion to the company s progress under the contract. Although companies will have some discretion in how they estimate performance progress, most companies use the (contract s) costs incurred-to-date relative to the total expected costs as the measure of progress. Cumulative revenue is thus measured as: progress to date x total contract price. Cumulative profit is measured as: progress to date x total estimated contract profit. For a given period, revenue or profit can be calculated by subtracting revenue or profit recognized in prior period from total cumulative revenue or profit. This method utilizes two inventory accounts: construction in process and progress billings iv. Costs and profits are initially recognized in the construction in process account (debit entry to construction in process and credit entry to construction expense or construction income), while customer billings are recognized in progress billings (debit entry to receivables or cash, credit entry to progress billings). By the end of the contract, the balances of progress billings and construction in process will reflect the total revenue from the project. At contract completion, the company would make an entry to close these accounts (debit progress billings and credit construction in process). 3
4 When the outcome of a contract cannot be reliably measured, U.S. GAAP allows for companies to utilize the completed-contract method of accounting. Companies defer recognizing revenue, expenses, and profit until the project is fully complete. Under this method, all costs incurred during the contract are recognized in the construction in process account and all billings are recognized in the progress billings account. At contract completion, the progress billings and construction in process accounts are closed, and revenue, expenses, and profit are recognized at that point. The completed contract method is not allowed under IFRS. Rather, when a contract outcome cannot be reliably measured, IFRS requires companies to recognize revenue and costs but defer recognizing any profits until all costs have been incurred Installment Sales An installment sale is a sale in which the sales proceeds are paid in installments. When the collection of the selling price cannot be reasonably estimated or assured, U.S. GAAP allows companies to use either the installment method or the cost recover method. Under the installment method, a company recognizes revenue and cost of goods sold at the time of sale but will defer the recognition of profit until payments are received. At the time of sale, the company defers profit through the use of an account called deferred gross profit (a contra account to accounts receivable). The company will then apply the gross profit percentage established at the time of sale to each payment. When payments are received, the company thus ratably releases profit from the deferred gross profit account. 4
5 U.S. GAAP permits the use of the cost recovery method only when there is a high degree of uncertainty of receivables collection. Under this method, a seller fully defers the recognition of profit until the cash payments received exceed the seller s cost. The above methods are not allowed under IFRS. Under IFRS, installment sales are recognized as a financing arrangement, and thus the seller must separate the sales price into two components: (1) the sales price, recognized as the discounted present value of the installment stream, and (2) the interest component. The company recognizes the sales price at the time of sale and recognizes the interest component over the installment period Barter Sales A company engages in a barter transaction when it provides a good or service and receives in exchange another good or service (instead of cash payment or the promise of future cash payment). Under U.S. GAAP, companies engaging in barter can recognize revenue at the fair value of the goods or services received only when the company has a history of such transaction. If no such history exists, the company must recognize revenue as the book value of the asset being surrendered. Under IFRS, a company recognizes barter revenue based on the fair value of revenue of similar non-barter transactions with unrelated parties New Revenue Recognition Standard Issued May 2014 The new revenue recognition pronouncements from the FASB and the IASB is the result of an ongoing effort at converging the two accounting standards. v The joint guidelines require companies to take a principles based approach to revenue recognition. The new framework was formulated with intent of 5
6 being broad enough to apply to many types of revenue-generating activities, thus replacing the fractured revenue recognition guidelines under previous U.S. GAAP and IFRS. Under the new guidelines, companies will follow a five-step process in recognizing revenue. Companies must: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The new standards also require that certain costs which were previously expensed now be capitalized vi. In particular, incremental costs of obtaining a contract and certain costs incurred to fulfill a contract must be capitalized under the new standards. The new standards also require greatly enhanced footnote disclosures. This requirement is partially due to the increased use of discretion and managerial estimates inherent in the new standards. 3. EXPENSE RECOGNITION A company incurs an expense when it relinquishes value in a period of corresponding revenues. The defining characteristic of expense recognition under both U.S. GAAP and IFRS is the matching principle, meaning expenses must be reported in the same period as the associated revenue vii Managerial Estimates The matching principle requires the use of managerial estimates in several key areas. For example, a company must estimate the amount of future uncollectible receivables by establishing an allowance for doubtful accounts (a contra-asset to accounts receivable). Thus, the company will record accounts receivable at estimated realizable value (net of the allowance for doubtful accounts). Another area 6
7 requiring the use of managerial estimates is in the accounting for warranty expense. Here the matching principle requires that companies estimate future warranty costs in the same period in which the sale is made. Because this expense item is an estimate rather than an actual direct cost, the company sets up a corresponding liability (warranty reserve) on the balance sheet. Future warranty costs would then be posted against this reserve viii Depreciation and Amortization Depreciation and amortization charges represent the systematic expensing of past capital expenditures. Depreciation relates to the expensing of tangible assets (such as buildings and equipment), over the asset s expected useful life. Amortization is the periodic expensing of intangible assets (such as patents and brands) over the asset s expected useful life. Companies can choose from several methods in accounting for depreciation and amortization (I will discuss depreciation and amortization in greater depth in subsequent articles). However, most company use the straight-line method for financial reporting purposes. Under the straight-line method, depreciation expense is the asset s cost minus its estimated salvage value, divided by its estimated useful life. This method leads the company to recognize an asset s depreciation in equal amounts. 4. NON-RECURRING ITEMS AND NON-OPERATING ITEMS Investors are concerned with a company s sustainable earnings, i.e., those earnings which are likely to persist in the future. As such, the income statement is structured to help investors identify those items which are likely aberrations. 7
8 4.1. Discontinued Operations Often a company will decide to exit a business segment. When the given business is clearly distinct (separate both physical and operationally) from all other business operations, the company must disclose the income of the discontinued segment separately from the income from ongoing operations (known as income from continuing operations). Because the discontinued operation will not contribute to future operating income, the segregation of this income allows the investor to better estimate a company s sustainable earnings. Under both U.S. GAAP and IFRS, discontinued operations are accounted for under a two-step process ix. First, the company must restate all items on the income statement excluding the effects of the discontinued operations. Second, the effects of the discontinued operations must be reported, net of tax, below income from continuing operations. Under U.S. GAAP, however, the company would separately report income (or loss) from discontinued operations and gains (or losses) on the disposition of the segment (or specific assets) within the discontinued segment. Under IFRS, the total impact of discontinued operations is reported on the income statement in a single item. Companies are only required to restate the income statement for three years (the current year and previous two years). Income statements before the most recent three years will thus contain the results of these operations and likely the company will not have provided disclosures allowing the investor to segregate the impact of the operations. For companies with substantial discontinued operations, past income statements may offer little basis of comparison with those after the discontinued operations. 8
9 4.2. Extraordinary Items Extraordinary items are an income statement category currently prohibited under both U.S. GAAP and IFRS. However, this classification was permitted under U.S. GAAP for all periods before December 15, Because investors may analyze financial statements prior to this period, a brief discussion of this now-defunct category is warranted. For an item to be classified as extraordinary, the item had to be both unusual and infrequent. Few items met both thresholds. Extraordinary items were reported net of tax and appeared on the income statement below discontinued operations. The separation and non-recurring nature of extraordinary items allowed investors to exclude these items from their calculations of sustainable earnings Unusual or Infrequent Items Current U.S. GAAP requires that companies separately disclose on the income statement items that are unusual, infrequent, or unusual and infrequent. IFRS also requires separate disclosure of an item when the item is material and /or relevant to an understanding of a company s financial performance, and items that are unusual or infrequent generally meet these criteria. By separately presenting these items, investors are assisted in assessing the possibility that these items will recur and thus should be included in calculations of sustainable earnings Changes in Accounting Policies Companies may change accounting policies because of either a change in authoritative accounting standards or a choice by management. Regardless of the cause, a change in accounting policy is recorded retroactively, typically requiring a restatement of the financials for the past two years in addition to the 9
10 current year. The company must disclose in the footnotes the specifics of and the justification for the accounting policy change x. A company may also change certain accounting estimates. For example, a company may change the estimated useful life of an asset when calculating depreciation. Changes in accounting estimates could have a material impact on reported earnings, and thus management may have an incentive to abuse this discretion to inflate earnings. These changes are particularly difficult for investors because these changes are not retroactively applied and the disclosures are made in the footnotes to the financial statements. A company may also have to restate financial statements due to a past accounting error. For accounting errors, the company must retroactively adjust the financial statements for all prior periods shown in the current financial statements. Although honest accounting mistakes do occur, investors should be extra vigilant when analyzing the financial statements of companies with such errors. 5. COMPREHENSIVE INCOME 5.1. Other Comprehensive Income Certain gains and losses are excluded from the income statement, but rather they are directly accounted for in a shareholder s equity category known as other comprehensive income. Under both U.S. GAAP and IFRS, four types of items are treated as other comprehensive income: (1) foreign currency translation adjustments, (2) unrealized gains and losses on hedge derivate contracts, (3) unrealized gains and losses on investments categorized as available-for-sale, and (4) certain costs related to a company s defined-benefit post retirement plans. Under IFRS (but not U.S. GAAP), companies may use other comprehensive income to revalue long-lived assets. 10
11 5.2. Comprehensive Income Comprehensive income (Total Comprehensive Income under IFRS) is the sum of net income and other comprehensive income. This measure reflects the total impact of a company s transactions with nonowners (it excludes investments and withdrawals by owners). Under U.S. GAAP, a firm can report comprehensive income either at the bottom of the income statement, on a separate statement of comprehensive income, or as a separate column in the statement of shareholder s equity. Under IFRS, a firm can present total comprehensive income on a single statement of other comprehensive income or an income statement and a separate statement showing both income and other comprehensive income. SOURCES Revsine, Lawrence, Daniel W. Collins, W. Bruce Johnson, H. Fred Mittelstaedt, Leonard C. Soffer. Financial Reporting & Analysis, 6 th ed. New York: McGraw-Hill, Robinson, Thomas R., Elaine Henry, Wendy L. Pirie, and Michael A. Broihahn. International Financial Statement Analysis, 3 rd ed. Hoboken: Wiley, i FASB Accounting Standards Codification (ASC) Section ii SEC Staff Accounting Bulletin: No. 101 iii IAS No. 18 iv Progress billings is a contra account to construction in process, meaning that it is used to offset (reduce) that account. v The new standards are set forth in IFRS No. 15 and FASB ASC Topic
12 vi An expenditure is capitalized when the expenditure is placed on the balance sheet as an asset, rather than initially placed on the income statement as an expense. vii The matching principle is implicit in IFRS. viii The actual journal entry for a direct warranty cost would be to debit warranty reserve and credit cash or accounts payable ix Outlined in ASC 225 (U.S. GAAP) and IFRS 5 (IFRS) x FASB ASC Topic 250 (U.S. GAAP) and IAS No. 8 (IFRS) 12
ANALYSIS OF THE BALANCE SHEET PART 1: ASSETS
ANALYSIS OF THE BALANCE SHEET PART 1: ASSETS 1. INTRODUCTION The balance sheet shows the ending balances of a company s asset, liabilities, and equity accounts at a specific time. For example, the balance
More informationBalance Sheet Analysis Part 1: Assets
Balance Sheet Analysis Part 1: Assets 1. INTRODUCTION The balance sheet shows the ending balances of a company s asset, liabilities, and equity accounts at a specific time. For example, the balance sheet
More informationCash Flow Statement Analysis
Cash Flow Statement Analysis 1. INTRODUCTION Recall from the article on the income statement that a company will recognize revenue regardless of when payment is received. For example, a company may sell
More informationRIGOS CMA REVIEW PART 1 CHAPTER 1 EXTERNAL FINANCIAL REPORTING DECISIONS
RIGOS CMA REVIEW PART 1 CHAPTER 1 EXTERNAL FINANCIAL REPORTING DECISIONS Course 5342 copyright 2019. The Rigos programs have educated over 100,000 professionals since 1980. 1-19 RIGOS CMA REVIEW PART
More informationChapter 4 Income Statement 4-1
Chapter 4 Income Statement 1. The concept of income 2. Why income measure is important 3. How income is measured 4. The format of an income statement 5. The components of an income statement 6. The comprehensive
More informationKARACHI UNIVERSITY BUSINESS SCHOOL UNIVERSITY OF KARACHI BS (BBA) V
60 P a g e B S ( B B A ) S y l l a b u s KARACHI UNIVERSITY BUSINESS SCHOOL UNIVERSITY OF KARACHI BS (BBA) V Course Title : FINANCIAL ACCOUNTING Course Number : BA(BS) 501 Credit Hours : 03 Course 1. Introduction
More informationInternational Standards Convergence
International Standards Convergence I. INTERNATIONAL FINANCIAL REPORTING STANDARDS The International Accounting Standards Board (IASB) develops and issues International Financial Reporting Standards ().
More informationSection 2 - Cash and Cash Equivalents & Balance Sheet
Section 2 - Cash and Cash Equivalents & Balance Sheet 12-1 Cash Currency and coins Balances in checking accounts Items for deposit such as checks and money orders from customers Cash equivalents are short-term
More informationUNDERSTANDING THE INCOME STATEMENTS
UNDERSTANDING THE INCOME STATEMENTS 1 IS = Income Statement R = Revenue E = Expenses FV = Fair Value SL = Straight-Line AFS = Available For Sale Securities I.S is sometimes referred to as statement of
More informationc01.fm Page 3 Friday, January 28, :29 PM CHAPTER 1
c01.fm Page 3 Friday, January 28, 2005 4:29 PM CHAPTER 1 FINANCIAL STATEMENT REPORTING: THE INCOME STATEMENT The reporting requirements of the income statement, balance sheet, statement of changes in cash
More informationCOPYRIGHTED MATERIAL CHAPTER 1. The reporting requirements of the income statement, FINANCIAL STATEMENT REPORTING: THE INCOME STATEMENT
CHAPTER 1 FINANCIAL STATEMENT REPORTING: THE INCOME STATEMENT The reporting requirements of the income statement, balance sheet, statement of changes in cash flows, and interim reporting guidelines must
More informationSection 2 - Cash and Cash Equivalents & Balance Sheet
Section 2 - Cash and Cash Equivalents & Balance Sheet 12-1 Cash Currency and coins Balances in checking accounts Items for deposit such as checks and money orders from customers Cash equivalents are short-term
More informationCHAPTER 4. Income Statement and Related Information 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 18, 28, 31, 32, 33, 36 13, 14, 15, 16, 27, 29, 35, 37
CHAPTER 4 Income Statement and Related Information ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Income measurement concepts. 1,
More informationDiscontinued Operations and Extraordinary Items
Statutory Issue Paper No. 24 Discontinued Operations and Extraordinary Items STATUS Finalized March 16, 1998 Original SSAP and Current Authoritative Guidance: SSAP No. 24 Type of Issue: Common Area SUMMARY
More informationXerox Corporation Consolidated Statements of Income
Xerox Corporation Consolidated Statements of Income Year Ended December 31, (in millions, except per-share data) 2010 2009 2008 Revenues Sales $ 7,234 $ 6,646 $ 8,325 Service, outsourcing and rentals 13,739
More informationOriginal SSAP and Current Authoritative Guidance: SSAP No. 68
Statutory Issue Paper No. 68 Business Combinations and Goodwill STATUS Finalized March 16, 1998 Original SSAP and Current Authoritative Guidance: SSAP No. 68 Type of Issue: Common Area SUMMARY OF ISSUE
More informationPREVIEW OF CHAPTER Slide 4-2
4-1 PREVIEW OF CHAPTER 4 4-2 Intermediate Accounting IFRS 2nd Edition Kieso, Weygandt, and Warfield 4 Related Information Income Statement and LEARNING OBJECTIVES After studying this chapter, you should
More informationNon-current Assets Held for Sale and Discontinued Operations
International Financial Reporting Standard 5 Non-current Assets Held for Sale and Discontinued Operations In April 2001 the International Accounting Standards Board (IASB) adopted IAS 35 Discontinuing
More informationEKS&H Newsletter 2015 Second Quarter Update (Public Company)
EKS&H Newsletter 2015 Second Quarter Update (Public Company) This newsletter provides a summary of some of the more important 2015 second quarter accounting and financial reporting activities. The content
More informationComparing Canadian GAAP and IFRS
Comparing Canadian GAAP and IFRS Standard setters around the world have been working together for many years now, trying to reduce inconsistencies among accounting practices. Thus, many differences have
More informationWork Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S.
Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers A Comparison of U.S. GAAP and IFRS A Securities and Exchange
More informationNon-current Assets Held for Sale and Discontinued Operations
International Financial Reporting Standard 5 Non-current Assets Held for Sale and Discontinued Operations In April 2001 the International Accounting Standards Board (IASB) adopted IAS 35 Discontinuing
More informationNew revenue guidance Implementation in Industrial Products
No. US2017-16 August 17, 2017 What s inside: Overview... 1 Step 1: Identify the contract with the customer... 2 Step 2: Identify performance obligations... 4 Step 3: Determine... 5 Step 4: Allocate...8
More informationLIMITED EDITION. Conceptual Framework, Standards, Standard Setting, and Presentation of Financial Statements
LIMITED EDITION Conceptual Framework, Standards, Standard Setting, and Presentation of Financial Statements Contents Learning Outcomes 1 1.1 U.S. Securities and Exchange Commission 2 SEC Rulemaking Process
More informationThe basics November 2013
versus The basics November 2013 Table of contents Introduction... 2 Financial statement presentation... 3 Interim financial reporting... 6 Consolidation, joint venture accounting and equity method investees/associates...
More informationSummary Comparison of Canadian GAAP (Part V) and IFRSs (Part I)
Summary Comparison of Canadian GAAP and IFRSs (Part I) as of December 31, 2009 1. This comparison has been prepared by the staff of the Accounting Standards Board (AcSB) and has not been approved by the
More informationNational Insurance Producer Registry. Financial Report December 31, 2017
National Insurance Producer Registry Financial Report December 31, 2017 Contents Independent auditor s report 1 Financial statements Statements of financial position 2 Statements of activities 3 Statements
More informationA Review of the Accounting Cycle
CHAPTER 2 A Review of the Accounting Cycle LEARNING OBJECTIVES 1. Identify and explain the basic steps in the accounting process (accounting cycle). Analyze business documents, Journalize transactions,
More informationAnalyzing Operating Activities
Analyzing Operating Activities 6 CHAPTER McGraw-Hill/Irwin 2007, The McGraw-Hill Companies, All Rights Reserved Income Measurement Illustration Facts: Concepts Company with $100,000 in cash Buys condo
More information(Entity that already applies the International Financial Reporting Standards)... II-1
CONSOLIDATED FINANCIAL STATEMENTS December 31, 2016 (Entity that already applies the International Financial Reporting Standards)... I-1 Independent auditor's report... I-3 Consolidated statements of financial
More informationGuide to preparing carve-out financial statements
Guide to preparing carve-out financial statements Contents 1 Introduction... 1 1.1 Carve-out financial statements... 1 1.2 When carve-out financial statements may be required... 2 1.2.1 Financial statements
More informationNon-current Assets Held for Sale and Discontinued Operations
International Financial Reporting Standard 5 Non-current Assets Held for Sale and Discontinued Operations This version includes amendments resulting from IFRSs issued up to 31 December 2009. IAS 35 Discontinuing
More informationCSP Inc. (Exact name of Registrant as specified in its charter)
United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended
More informationAppendix Summary of tentative decisions to date
Appendix Summary of tentative decisions to date This is a staff-prepared summary of the proposals included in the October 2008 discussion paper, Preliminary Views on Financial Statement Presentation, and
More informationCHAPTER 4. Income Statement and Related Information 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 32, 35 12, 13, 14, 23, 25 12, 14, 15, 16, 19, 20
CHAPTER 4 Income Statement and Related Information ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Income measurement concepts. 1,
More informationIAS 39, Financial Instruments: Recognition and Measurement. 3. IASB Exposure Draft, Hedge Accounting. 4
October 16, 2012 Volume 19, Issue 27 Heads Up In This Issue: Background Hedging Instruments Hedged Items Qualifying Criteria for Applying Hedge Accounting Accounting for Qualifying Hedges Modifying and
More informationORIGINAL PRONOUNCEMENTS
Financial Accounting Standards Board ORIGINAL PRONOUNCEMENTS AS AMENDED Statement of Financial Accounting Standards No. 144 Accounting for the Impairment or Disposal of Copyright 2010 by Financial Accounting
More informationMitsubishi International Corporation and Subsidiaries (A Wholly-Owned Subsidiary of Mitsubishi Corporation)
Mitsubishi International Corporation and Subsidiaries (A Wholly-Owned Subsidiary of Mitsubishi Corporation) Consolidated Financial Statements as of and for the Years Ended March 31, 2009 and 2008, and
More informationAre you ready for IFRS? The Benefits and Risks of conversion from U.S. GAAP to IFRS
Are you ready for? The Benefits and Risks of conversion from to The Securities and Exchange Commission (SEC) have issued a proposed move to support a single set of international accounting standards to
More informationFair Value Measurement
U.S. GAAP AND IFRS Fair Value Measurement Questions and Answers November 2013 kpmg.com Contents Substantial Convergence 1 About this Publication 2 Summary of Differences Between U.S. GAAP and IFRS 3 Questions
More informationChap002 Accrual Accounting and Net income determination
Chap002 Accrual Accounting and Net income determination True/False 1. Accrual accounting decouples measured earnings from operating cash inflows and outflows. Answer: True Learning Objective: 02-01 Topic:
More informationAccounting 303 Exam 1, Chapters 1 3 & 5 Fall 2014 Section Row
1 Accounting 303 Name Exam 1, Chapters 1 3 & 5 Fall 2014 Section Row I. Multiple Choice Questions. (2 points each, 54 points in total) Read each question carefully and indicate your answer by circling
More informationLAW AND ACCOUNTING COMMITTEE SUMMARY OF CURRENT FASB DEVELOPMENTS 2015 Fall Meeting Washington, DC
LAW AND ACCOUNTING COMMITTEE SUMMARY OF CURRENT FASB DEVELOPMENTS 2015 Fall Meeting Washington, DC Randall D. McClanahan Butler Snow LLP randy.mcclanahan@butlersnow.com ACCOUNTING STANDARDS UPDATE NO.
More informationKey Differences Between ASC (Formerly SOP 81-1) and ASC 606
Aerospace & Defense Spotlight February 2019 Key Differences Between ASC 605-35 (Formerly SOP 81-1) and ASC 606 The Bottom Line In May 2014, the FASB and the International Accounting Standards Board (IASB
More informationCISCO SYSTEMS, INC. (Exact name of registrant as specified in its charter)
(Mark One) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly
More informationDefining Issues. Revenue from Contracts with Customers. June 2014, No
Defining Issues June 2014, No. 14-25 Revenue from Contracts with Customers On May 28, 2014, the FASB and the IASB issued a new accounting standard that is intended to improve and converge the financial
More informationFair value measurement
Fair value measurement Questions and answers US GAAP and IFRS $ December 2017 kpmg.com Contents Contents Comparability is the challenge 1 About the standards 2 About this publication 4 A. An introduction
More informationACCOUNTING AND AUDITING UPDATE
ACCOUNTING AND AUDITING UPDATE August 2015 In this edition Impact of the new revenue standard on the real estate sector p1 Pushdown accounting: A new basis of accounting in separate financial statements
More informationInvestment Companies and Investment Property Entities
Investment Companies and Investment Property Entities FASB Project Update November 2011 NCRIEF Conference The views expressed in this presentation are those of the presenter. Official positions of the
More informationConsolidated Statement of Financial Condition Period ended June 30, 2017 (Unaudited)
JANNEY MONTGOMERY SCOTT LLC Consolidated Statement of Financial Condition Period ended June 30, 2017 (Unaudited) Janney Montgomery Scott LLC Consolidated Statement of Financial Condition and Notes For
More informationInternational GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 15)
International GAAP Holdings Limited Model financial statements for the year ended 31 December 2017 (With early adoption of IFRS 15) Appendix 2: Early application of IFRS 15 Revenue from Contracts with
More informationFinancial Reporting and Analysis (7 th Ed.) Chapter 2 Solutions Accrual Accounting and Income Determination Exercises
Financial Reporting and Analysis (7 th Ed.) Chapter 2 Solutions Accrual Accounting and Income Determination Exercises Exercises E2-1. Distinguishing accrual-basis revenue from cash receipts (AICPA adapted)
More informationFORM 6-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C KYOCERA CORPORATION
FORM 6-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 For the month
More informationACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
INTERIM FINANCIAL REPORT FOR THE PERIOD ENDED 30 September 2018 (based on the Article 5 of L.3556/2007) ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) CONTENTS INTERIM FINANCIAL STATEMENTS...
More informationAccounting for Income Taxes
Accounting for Income Taxes Publication Date: November 2016 Accounting for Income Taxes Copyright 2016 by DELTACPE LLC All rights reserved. No part of this course may be reproduced in any form or by any
More informationUS GAAP versus IFRS. The basics. October 2016
versus The basics October 2016 Table of contents Introduction... 2 Financial statement presentation... 4 Interim financial reporting... 8 Consolidation, joint venture accounting and equity method investees/associates...
More informationAN OFFERING FROM BDO S NATIONAL ASSURANCE PRACTICE SIGNIFICANT ACCOUNTING & REPORTING MATTERS
AN OFFERING FROM BDO S NATIONAL ASSURANCE PRACTICE SIGNIFICANT ACCOUNTING & REPORTING MATTERS Significant Accounting & Reporting Matters Second Quarter 2011 1 FIRST QUARTER 2016 BDO is the brand name for
More informationApplying IFRS. IFRS 13 Fair Value Measurement. Fair Value Measurement
Applying IFRS IFRS 13 Fair Value Measurement Fair Value Measurement November 2012 Introduction Many IFRS permit or require entities to measure or disclose the fair value of assets, liabilities, or equity
More informationJANNEY MONTGOMERY SCOTT LLC Consolidated Statement of Financial Condition Year ended December 31, 2016
JANNEY MONTGOMERY SCOTT LLC Consolidated Statement of Financial Condition Year ended December 31, 2016 Janney Montgomery Scott LLC Consolidated Statement of Financial Condition and Notes For the year
More information3. Financial statements should present information in a manner that:
ATTACHMENT E Exhibit 1 FINANCIAL STATEMENT PRESENTATION PROJECT Phase B: Summary of Tentative Preliminary Views and Illustrative Sample Financial Statements Reflective of Meetings through May 16, 2007
More informationFinancial Statement Analysis L6: Analyzing Operating Activities
6-1 Financial Statement Analysis L6: Analyzing Operating Activities 6-2 Content 1. Income Measurement 2. Non-Recurring Items 3. Revenue Recognition 4. Deferred Charges 5. Employee Benefits 6. Interest
More informationThe basics November 2012
versus The basics November 2012!@# Table of contents Introduction... 2 Financial statement presentation... 3 Interim financial reporting... 6 Consolidation, joint venture accounting and equity method
More informationThe basics December 2011
versus The basics December 2011!@# Table of contents Introduction... 2 Financial statement presentation... 4 Interim financial reporting... 6 Consolidation, joint venture accounting and equity method
More informationThe Art Institute of Chicago
The Art Institute of Chicago Financial Statements as of and for the Years Ended June 30, 2013 and 2012, Supplementary Information as of and for the Year Ended June 30, 2013, and Independent Auditors Report
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C FORM 6-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 For the month
More informationStatement of Earnings
audited financial statements Statement of Earnings General Electric Company and consolidated affiliates For the years ended December 31 (In millions; per-share amounts in dollars) 2009 2008 2007 Revenues
More informationLAW AND ACCOUNTING COMMITTEE SUMMARY OF CURRENT FASB DEVELOPMENTS 2016 Spring Meeting Montreal
LAW AND ACCOUNTING COMMITTEE SUMMARY OF CURRENT FASB DEVELOPMENTS 2016 Spring Meeting Montreal Randall D. McClanahan Butler Snow LLP randy.mcclanahan@butlersnow.com ACCOUNTING STANDARDS UPDATE NO. 2016-09
More informationI N T E R I M U N A U D I T E D C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S A N D S U P P L E M E N T A R Y I N F O R M A T I O N
I N T E R I M U N A U D I T E D C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S A N D S U P P L E M E N T A R Y I N F O R M A T I O N Baptist Health Care Corporation and Subsidiaries For
More informationCHAPTER 2 ANSWERS TO QUESTIONS
CHAPTER 2 Note: The letter A indicated for a question, exercise, or problem means that the question, exercise, or problem relates to a chapter appendix. ANSWERS TO QUESTIONS 1. At the acquisition date,
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
More informationACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
INTERIM FINANCIAL REPORT FOR THE PERIOD ENDED 31 March 2018 (based on the Article 5 of L.3556/2007) ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) CONTENTS INTERIM FINANCIAL STATEMENTS...
More informationIFRS for SMEs. The Little GAAP we ve been waiting for?
IFRS for SMEs The Little GAAP we ve been waiting for? Getting Up On My Soapbox!! Opportunity for CPAs to take back their profession Regulatory overload has scared many from the profession, or at least
More informationNew Revenue Recognition Framework: Will Your Entity Be Affected?
New Revenue Recognition Framework: Will Your Entity Be Affected? One of the most significant changes to financial accounting and reporting in recent history is soon to be effective. Reporting entities
More informationONLINE VACATION CENTER HOLDINGS CORP. CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 and 2016
ONLINE VACATION CENTER HOLDINGS CORP. CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 and 2016 Fort Lauderdale, Florida CONSOLIDATED FINANCIAL STATEMENTS December 31, 2017 and 2016 CONTENTS INDEPENDENT
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly
More informationPublic Television 19, Inc. Financial Report June 30, 2017
Financial Report June 30, 2017 Contents Independent auditor s report 1-2 Financial statements Statements of financial position 3 Statements of activities 4-5 Statements of cash flows 6 Notes to financial
More informationDIMECO, INC. HONESDALE, PENNSYLVANIA AUDIT REPORT
DIMECO, INC. HONESDALE, PENNSYLVANIA AUDIT REPORT DECEMBER 31, 2018 DIMECO, INC. AUDITED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 Independent Auditor s Report 1 Financial Statements Page Number
More informationStatement of Financial Condition
Statement of Financial Condition (Unaudited) Wedbush Securities Inc. Contents Statement of Financial Condition 3 Notes to Statement of Financial Condition 4 Page Statement of Financial Condition As of
More informationA closer look at IFRS 15, the revenue recognition standard
Applying IFRS IFRS 15 Revenue from Contracts with Customers A closer look at IFRS 15, the revenue recognition standard (Updated October 2018) Overview Many entities have recently adopted the largely converged
More informationCommunities of Coastal Georgia Foundation, Inc. (A Non-Profit Organization) FINANCIAL REPORT
Communities of Coastal Georgia Foundation, Inc. (A Non-Profit Organization) FINANCIAL REPORT December 31, 2010 and 2009 C O N T E N T S INDEPENDENT AUDITOR'S REPORT 1 Page FINANCIAL STATEMENTS Statements
More informationFINANCIAL STATEMENTS
2016 FINANCIAL STATEMENTS Copyright 1996-2017 National Insurance Producer Registry (NIPR) National Insurance Producer Registry Financial Report December 31, 2016 Contents Independent auditor s report 2
More informationREVENUE RELATED TO ORDINARY ACTIVITIES ACCORDING TO IFRS AND ROMANIAN REGULATIONS
REVENUE RELATED TO ORDINARY ACTIVITIES ACCORDING TO IFRS AND ROMANIAN REGULATIONS ECOBICI NICOLAE ASSOCIATE PROFESSOR PHD, CONSTANTIN BRANCUSI UNIVERSITY OF TARGU JIU e-mail: nycu2004ro@yahoo.com Abstract
More informationTHE LEBANESE COMPANY FOR THE DEVELOPMENT AND RECONSTRUCTION OF BEIRUT CENTRAL DISTRICT S.A.L.
THE LEBANESE COMPANY FOR THE DEVELOPMENT AND RECONSTRUCTION OF BEIRUT CENTRAL DISTRICT S.A.L. CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT YEAR ENDED DECEMBER 31, 2014 THE LEBANESE
More informationNational 4-H Council and Controlled Affiliates
National 4-H Council and Controlled Affiliates Consolidated Financial Statements, Schedule of Expenditures of Federal Awards, and Independent Auditor s Reports Required by Government Auditing Standards
More informationDisclosure on transition to IFRS
- 13 - Disclosure on transition to The Company adopted in preparing its consolidated financial statements for the fiscal year ended March 31, 2017. The date of transition to is April 1, 2015. (1) First-time
More informationKUDELSKI GROUP FINANCIAL STATEMENTS 2017
FINANCIAL STATEMENTS 2017 CONTENTS CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS P. 4 FOR THE YEARS ENDED DECEMBER 31, 2017 AND 2016 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
More informationCopyright 2009 The Learning House, Inc. Income Taxes and Investments Page 1 of 17
Copyright 2009 The Learning House, Inc. Income Taxes and Investments Page 1 of 17 Introduction Taxes are a significant expense for most companies and must be considered when analyzing a company. Differences
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C FORM 10-Q. Aon plc (Exact Name of Registrant as Specified in Its Charter)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
More informationExecutive Breakfast Briefing Accounting & Taxes in the New Year. Sensiba San Filippo LLP 1
Executive Breakfast Briefing Accounting & Taxes in the New Year Sensiba San Filippo LLP www.ssfllp.com 1 Significant Accounting Standards Updates Sensiba San Filippo LLP www.ssfllp.com 2 Private Company
More informationNew revenue guidance Implementation in the pharmaceutical and life sciences sector
No. US2017-20 September 06, 2017 What s inside: Overview... 1 Scope... 2 Step 1: Identify the contract. 2 Step 2: Identify performance obligations.. 4 Step 3: Determine transaction price.7 Step 4: Allocate
More informationMEGA Brands Inc. Consolidated Financial Statements December 31, 2012 and 2011 (in thousands of US dollars)
MEGA Brands Inc. Consolidated Financial Statements December 31, 2012 and 2011 (in thousands of US dollars) Report Independent Auditor s Report To the Shareholders of MEGA Brands Inc. We have audited the
More informationEnablence Technologies Inc.
Consolidated financial statements Enablence Technologies Inc. For the years ended Table of contents Independent Auditor s Report... 1 Consolidated statements of financial position... 2 Consolidated statements
More informationUNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C FORM 6-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 6-K Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934 For the month
More informationFPB FINANCIAL CORP. AND SUBSIDIARIES
FPB FINANCIAL CORP. AND SUBSIDIARIES Audits of Consolidated Financial Statements December 31, 2015 and 2014 Contents Independent Auditor s Report 1-2 Basic Consolidated Financial Statements Consolidated
More informationFinancial Statement Analysis
14-1 Chapter 14 Financial Statement Analysis 14-2 Learning Objectives After studying this chapter, you should be able to: 1. Discuss the need for comparative analysis. 2. Identify the tools of financial
More informationFortisBC Energy Inc. An indirect subsidiary of Fortis Inc. Consolidated Financial Statements For the years ended December 31, 2017 and 2016
An indirect subsidiary of Fortis Inc. Consolidated Financial Statements Prepared in accordance with accounting principles generally accepted in the United States of America MANAGEMENT S REPORT The accompanying
More information2016 A&A Update November 14, 2016
2016 A&A Update November 14, 2016 Agenda Simplification Initiative Convergence Projects Financial Instruments Leases Revenue Recognition Attestation Update Simplification Initiative What is a simplification
More informationSimilarities and Differences
Similarities and Differences A comparison of IFRS and February 2006 www.pwc.com/ifrs PricewaterhouseCoopers (www.pwc.com) is the world s largest professional services organisation. Drawing on the knowledge
More information