1. The Conceptual Framework of Accounting
- 1.1 Introduction to the Conceptual Framework
- 1.2 Objectives of Financial Reporting
- 1.3 Qualitative Characteristics of Accounting Information
- 1.4 Elements of Financial Statements
- 1.5 Recognition and Measurement Principles
- 1.6 Assumptions Underlying Financial Statements
- 1.7 Constraints in Accounting Information
- 1.8 The Role of Ethics in Accounting
- 1.9 Evolution of the Conceptual Framework
- 1.10 International Financial Reporting Standards (IFRS) vs. GAAP
- 1.11 The IASB and FASB Conceptual Framework Projects
- 1.12 Application of the Conceptual Framework in Practice
2. Income Measurement and Profitability Analysis
- 2.1 Revenue Recognition Principles
- 2.2 Expense Recognition and the Matching Principle
- 2.3 Income Statement Formats
- 2.4 Comprehensive Income and Other Comprehensive Income
- 2.5 Profitability Ratios and Analysis
- 2.6 Earnings Management
- 2.7 Interim Reporting and Segment Reporting
- 2.8 Changes in Accounting Estimates and Policies
- 2.9 Discontinued Operations
- 2.10 Extraordinary Items and Unusual Gains/Losses
- 2.11 Earnings per Share (EPS) Basics
- 2.12 Analyzing Profitability Trends
3. Revenue Recognition
- 3.1 The Five-Step Revenue Recognition Model
- 3.2 Identifying the Contract with a Customer
- 3.3 Identifying Performance Obligations
- 3.4 Determining the Transaction Price
- 3.5 Allocating the Transaction Price to Performance Obligations
- 3.6 Recognizing Revenue When (or As) Performance Obligations are Satisfied
- 3.7 Contract Costs: Incremental Costs and Fulfillment Costs
- 3.8 Variable Consideration and the Constraint
- 3.9 Significant Financing Components in Contracts
- 3.10 Noncash Consideration and Consideration Payable to a Customer
- 3.11 Contract Modifications and Renewals
- 3.12 Special Issues: Licensing, Franchising, and Consignment Arrangements
4. Cash and Receivables
- 4.1 Classification of Cash and Cash Equivalents
- 4.2 Internal Controls over Cash
- 4.3 Accounts Receivable Recognition
- 4.4 Trade Discounts and Sales Discounts
- 4.5 Estimating Uncollectible Accounts: Allowance Method
- 4.6 Direct Write-Off Method
- 4.7 Notes Receivable and Interest Calculation
- 4.8 Securitization and Factoring of Receivables
- 4.9 Presentation and Disclosure of Receivables
- 4.10 Impairment of Receivables
- 4.11 Bank Reconciliations
- 4.12 Managing Receivables for Optimal Cash Flow
5. Inventory Valuation and Management
- 5.1 Inventory Classification and Systems
- 5.2 Cost Flow Assumptions: FIFO, LIFO, and Average Cost
- 5.3 Specific Identification Method
- 5.4 Lower of Cost or Net Realizable Value (LCNRV)
- 5.5 Inventory Estimation Techniques
- 5.6 Inventory Errors and Their Effects on Financial Statements
- 5.7 Consigned Goods and Sales with Buyback Agreements
- 5.8 Purchase Commitments and Their Financial Implications
- 5.9 Inventory Turnover and Management Analysis
- 5.10 Effects of Inventory Methods on Taxes and Cash Flow
- 5.11 Just-in-Time (JIT) Inventory Systems
- 5.12 Inventory Disclosure Requirements
6. Property, Plant, and Equipment (PP&E)
- 6.1 Acquisition of PP&E Assets
- 6.2 Capitalization vs. Expense
- 6.3 Depreciation Methods and Calculations
- 6.4 Impairment of PP&E Assets
- 6.5 Asset Disposal and Derecognition
- 6.6 Revaluation Model under IFRS
- 6.7 Asset Retirement Obligations (AROs)
- 6.8 Costs Subsequent to Acquisition
- 6.9 Self-Constructed Assets
- 6.10 Nonmonetary Exchanges
- 6.11 Leased Assets and Right-of-Use Assets
- 6.12 Disclosure Requirements for PP&E
7. Intangible Assets and Goodwill
- 7.1 Identification and Recognition of Intangible Assets
- 7.2 Accounting for Purchased Intangibles
- 7.3 Internally Generated Intangible Assets
- 7.4 Amortization of Intangible Assets
- 7.5 Impairment Testing for Intangibles
- 7.6 Goodwill Recognition and Measurement
- 7.7 Goodwill Impairment
- 7.8 Specific Intangible Assets: Patents, Trademarks, and Copyrights
- 7.9 Licenses, Franchises, and Customer Lists
- 7.10 Intangible Asset Disclosures
- 7.11 Software Development Costs
- 7.12 Impact of Intangibles on Financial Analysis
8. Investments and Fair Value Accounting
- 8.1 Classification of Investments in Debt and Equity Securities
- 8.2 Accounting for Held-to-Maturity Investments
- 8.3 Accounting for Trading Securities
- 8.4 Available-for-Sale Securities
- 8.5 Equity Method Investments
- 8.6 Consolidation and Non-Controlling Interests
- 8.7 Fair Value Measurement and Disclosure
- 8.8 Impairment of Investment Securities
- 8.9 Derivatives and Hedging Activities
- 8.10 Transfer and Reclassification of Investments
- 8.11 Disclosure Requirements for Investments
- 8.12 International Investments and Foreign Currency Transactions
9. Liabilities: Current and Long-Term
- 9.1 Accounts Payable and Accrued Liabilities
- 9.2 Notes Payable and Interest Recognition
- 9.3 Current Maturities of Long-Term Debt
- 9.4 Unearned Revenues
- 9.5 Contingent Liabilities and Commitments
- 9.6 Bonds Payable: Issuance and Valuation
- 9.7 Amortization of Bond Discounts and Premiums
- 9.8 Debt Restructuring and Extinguishment
- 9.9 Long-Term Notes and Mortgages
- 9.10 Presentation and Disclosure of Liabilities
- 9.11 Off-Balance Sheet Financing
- 9.12 Debt Covenants and Compliance
10. Shareholders' Equity: Paid-in Capital and Retained Earnings
- 10.1 Common and Preferred Stock Issuance
- 10.2 Additional Paid-In Capital and Contributed Surplus
- 10.3 Treasury Stock Transactions
- 10.4 Dividends: Cash, Property, and Stock
- 10.5 Stock Splits and Reverse Stock Splits
- 10.6 Retained Earnings and Appropriations
- 10.7 Accumulated Other Comprehensive Income (AOCI)
- 10.8 Equity-Based Compensation
- 10.9 Convertible Securities and Warrants
- 10.10 Reporting and Disclosure of Equity Transactions
- 10.11 Non-Controlling Interests
- 10.12 Book Value per Share and Analysis
11. Accounting for Income Taxes
- 11.1 Differences Between Taxable Income and Accounting Income
- 11.2 Deferred Tax Assets and Liabilities
- 11.3 Calculation and Presentation of Income Tax Expense
- 11.4 Valuation Allowances for Deferred Tax Assets
- 11.5 Tax Rate Changes and Their Impact
- 11.6 Net Operating Losses and Carryforwards
- 11.7 Intraperiod Tax Allocation
- 11.8 Uncertain Tax Positions
- 11.9 Disclosure Requirements for Income Taxes
- 11.10 International Tax Considerations
- 11.11 Accounting for Investment Tax Credits
- 11.12 Tax Planning Strategies
12. Employee Compensation and Benefits
- 12.1 Payroll Accounting
- 12.2 Post-Employment Benefits: Pensions
- 12.3 Other Post-Employment Benefits (OPEB)
- 12.4 Stock-Based Compensation
- 12.5 Employee Benefit Plans Disclosures
- 12.6 Deferred Compensation Arrangements
- 12.7 Compensated Absences
- 12.8 Termination Benefits and Severance Pay
- 12.9 Bonuses and Profit-Sharing Plans
- 12.10 Multiemployer Benefit Plans
- 12.11 Employee Stock Ownership Plans (ESOPs)
- 12.12 Compliance with Employment Laws and Regulations
13. Leases: Lessee and Lessor Accounting
- 13.1 Overview of Lease Accounting Standards
- 13.2 Identifying a Lease
- 13.3 Lessee Accounting: Right-of-Use Assets and Lease Liabilities
- 13.4 Lessor Accounting: Operating and Finance Leases
- 13.5 Lease Classification Tests
- 13.6 Measurement of Lease Payments
- 13.7 Short-Term Leases and Practical Expedients
- 13.8 Modifications and Reassessments
- 13.9 Sale and Leaseback Transactions
- 13.10 Disclosure Requirements for Leases
- 13.11 Leveraged Leases
- 13.12 Impact of Leases on Financial Ratios and Analysis
14. Derivatives and Hedging Activities
- 14.1 Introduction to Derivatives
- 14.2 Accounting for Derivative Instruments
- 14.3 Types of Derivative Contracts
- 14.4 Hedge Accounting Criteria
- 14.5 Fair Value Hedges
- 14.6 Cash Flow Hedges
- 14.7 Foreign Currency Hedges
- 14.8 Disclosures Related to Derivatives and Hedging
- 14.9 Embedded Derivatives
- 14.10 Accounting for Speculative Derivatives
- 14.11 Risks and Limitations of Derivative Instruments
- 14.12 Impact of Derivatives on Financial Statement Analysis
15. Accounting Errors, Estimates, and Changes
- 15.1 Types of Accounting Changes
- 15.2 Accounting for Changes in Accounting Principles
- 15.3 Changes in Accounting Estimates
- 15.4 Correction of Errors in Previously Issued Statements
- 15.5 Disclosure Requirements for Changes and Errors
- 15.6 Impact on Financial Statements and Retained Earnings
- 15.7 Impracticability Exception
- 15.8 Cumulative Effect Adjustments
- 15.9 Changes in Reporting Entity
- 15.10 IFRS vs. GAAP Treatment of Changes and Errors
- 15.11 Ethical Considerations in Reporting Changes
- 15.12 Case Studies on Accounting Changes and Error Corrections
16. The Statement of Cash Flows
- 16.1 Purpose and Importance of the Cash Flow Statement
- 16.2 Overview of Operating, Investing, and Financing Activities
- 16.3 Preparing the Statement Using the Direct Method
- 16.4 Preparing the Statement Using the Indirect Method
- 16.5 Cash Flows from Operating Activities
- 16.6 Cash Flows from Investing Activities
- 16.7 Cash Flows from Financing Activities
- 16.8 Noncash Investing and Financing Transactions
- 16.9 Analysis and Interpretation of Cash Flow Information
- 16.10 Common Errors in Preparing the Cash Flow Statement
- 16.11 Reconciliation of Net Income to Net Cash Provided by Operating Activities
- 16.12 International Variations in Cash Flow Reporting
17. Financial Statement Analysis
- 17.1 Objectives and Standards of Financial Analysis
- 17.2 Horizontal and Vertical Analysis
- 17.3 Ratio Analysis: Liquidity Ratios
- 17.4 Ratio Analysis: Solvency Ratios
- 17.5 Ratio Analysis: Profitability Ratios
- 17.6 Ratio Analysis: Market Ratios
- 17.7 DuPont Analysis
- 17.8 Cash Flow Analysis
- 17.9 Credit Analysis and Credit Risk Assessment
- 17.10 Limitations of Financial Statement Analysis
- 17.11 Forecasting Financial Statements
- 17.12 Use of Financial Analysis in Valuation
18. Interim and Segment Reporting
- 18.1 Interim Financial Reporting Requirements
- 18.2 Revenue and Expense Recognition for Interim Periods
- 18.3 Accounting Changes and Error Corrections in Interim Reports
- 18.4 Segment Reporting Objectives and Standards
- 18.5 Disclosure Requirements for Segments
- 18.6 Major Customer and Geographic Information
- 18.7 Matrix and Product Line Reporting
- 18.8 Interim Financial Statement Analysis
- 18.9 Impact of Segment Information on Financial Analysis
- 18.10 Challenges in Interim and Segment Reporting
- 18.11 Reporting Discontinued Operations in Interim Statements
- 18.12 International Standards for Interim and Segment Reporting
19. Accounting for Changes in Foreign Exchange Rates
- 19.1 Foreign Currency Transactions
- 19.2 Exchange Rate Concepts and Terms
- 19.3 Accounting for Import and Export Transactions
- 19.4 Translation of Foreign Financial Statements
- 19.5 Functional Currency Determination
- 19.6 Remeasurement vs. Translation
- 19.7 Foreign Currency Hedge Accounting
- 19.8 Disclosure Requirements for Foreign Currency Matters
- 19.9 Impact of Exchange Rates on Financial Statements
- 19.10 International Accounting Standards on Foreign Exchange
- 19.11 Tax Considerations in Foreign Operations
- 19.12 Managing Foreign Exchange Risk
20. Emerging Issues and Professional Development in Accounting
- 20.1 Current Trends in Financial Reporting
- 20.2 Accounting for Sustainability and Environmental Issues
- 20.3 Digitalization and Technology in Accounting
- 20.4 Ethical Challenges and Corporate Governance
- 20.5 Globalization and International Accounting Standards
- 20.6 Enhanced Disclosures and Transparency
- 20.7 Professional Judgment and Skepticism
- 20.8 Continuing Professional Education (CPE)
- 20.9 Regulatory Environment and Compliance
- 20.10 Careers in Accounting and Future Opportunities
- 20.11 The Role of Professional Organizations
- 20.12 Case Studies on Emerging Accounting Issues

17. Financial Statement Analysis

In this section

Financial Analysis Objectives and Standards: Mastering Accounting Insights
Explore the objectives and standards of financial analysis in accounting, focusing on Canadian standards and practices. Learn how to effectively analyze financial statements for informed decision-making.
Horizontal and Vertical Analysis in Financial Statement Analysis
Explore the methods of horizontal and vertical analysis to assess financial data across time periods and within statements, enhancing your understanding of financial statement analysis for Canadian accounting exams.
Liquidity Ratios in Ratio Analysis: Understanding and Application
Explore the critical role of liquidity ratios in financial analysis, focusing on a company's ability to meet short-term obligations. Learn about key ratios, their calculation, interpretation, and practical applications in Canadian accounting.
Solvency Ratios in Ratio Analysis: Mastering Financial Stability Assessment
Explore the intricacies of solvency ratios in financial statement analysis, focusing on long-term financial stability and debt levels. This comprehensive guide is designed for Canadian accounting exams, offering insights, examples, and practical applications.
Profitability Ratios in Ratio Analysis: A Comprehensive Guide
Explore the essential profitability ratios used in financial statement analysis, including their calculation, interpretation, and application in evaluating earnings performance and return on investment.
Ratio Analysis: Market Ratios - Understanding Financial Performance in the Stock Market
Explore the significance of market ratios in analyzing a company's financial performance in relation to its stock market valuation. Learn about key ratios, their calculations, and their implications for investors and financial analysts.
DuPont Analysis: Unlocking Financial Insights
Explore the DuPont Analysis to break down return on equity into its component parts for deeper financial insights.
Cash Flow Analysis: Mastering Financial Statement Evaluation
Explore comprehensive cash flow analysis techniques to evaluate the sufficiency and quality of cash flows, essential for Canadian accounting exams and professional practice.
Credit Analysis and Credit Risk Assessment: Understanding Financial Statement Insights
Explore the intricacies of credit analysis and credit risk assessment, focusing on how creditors evaluate a company's creditworthiness using financial statements. Learn about key financial ratios, risk factors, and assessment techniques essential for Canadian accounting exams.
Limitations of Financial Statement Analysis: Understanding Pitfalls and Challenges
Explore the limitations of financial statement analysis, uncovering potential pitfalls and considerations for accurate interpretation of financial data.
Forecasting Financial Statements: Mastering Future Financial Projections
Learn how to forecast financial statements effectively using historical data, key accounting principles, and practical examples. Enhance your understanding and prepare for Canadian Accounting Exams with confidence.
Financial Analysis in Valuation: Mastering Techniques for Business Valuation
Explore how financial statement analysis informs business valuation and investment decisions, essential for Canadian accounting exams.

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Monday, December 2, 2024

16. The Statement of Cash Flows

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17. Financial Statement Analysis

In this section