Balance Sheets Flashcards
What are current assets
Cash, Marketable securities, Accounts receivable and inventory
What are non-current assets
Tangible - Land/buildings/equipment/ natural resources
Tangible is recorded at purchase cost including shipping and instalation costs / construction + overhead
Intangible - Copywright, patent, Trademark, Franchises (Goodwill, but this is different)
Investment Property (IFRS only)
How do you calculate goodwill
It is the difference between the purchase price of a company and the fair value of their books.
It is the value on the acquisition date.
Test for impairment annually
Describe the treatment of Marketable securities under US GAAP on:
Interest / Dividends
Unrealised G/L
Realised G/A
I/D Income Statement
Unrealised G/L:
Held To maturity: Not on BS
Available for sale: OCI
Trading: Income statement
Realized G/L: Income Statement
Explain the effect of treasury stock
No dividends
No voting rights
Stock outstanding
What are they key ratios (Activity, Solvency)
Current
CA/ CL
Quick
CA - Inv / CL
Cash
Cash + MS/CL
Solvency
Long term Debt
LTD / Total Equity
Debt to equity
Total Debt / Total Equity
Total Debt
Total Debt / Total Assets
Fin. Leverage
Total Assets / Total Equity
What is the statement of shareholders equity
The statement of stockholders’ equity is the difference between total assets and total liabilities, and is usually measured monthly, quarterly, or annually.
IFRS requires that the statement of shareholders’ equity present information about the effects of any accounting changes that have been retrospectively applied to previous periods.
How do you calculate D/E
Use current liabilities / total sh equity
What is a classified balance sheet
current / non-current
What is deferred revenue classified as?
Deferred revenue is classified as a liability because the recipient has not yet earned the cash they received. The company must satisfy its debt to the customer before recognizing revenue.
Calculate working capital
CA - CL
What are trade receivables recorded as
They are typically reported at net realizable value, an approximation of fair value based on estimates of collectability.
What is the difference between deferred expenses and accrued expenses
Accrued expenses, also known as accrued liabilities, have been recognized on a company’s income statement but have not been paid as of the balance sheet date. Unpaid interest costs are an example of an accrued expense.
Deferred expenses refer to payments that have been made but will not be reported as an expense until a future accounting period
