Financial Reporting and Analysis Flashcards
What is a Form DEF-14A?
When a company prepares a proxy statement for its shareholders
What is a Form 8-K?
It discloses material events including significant asset acquisitions/disposals, changes in management/corporate governance, matters related to its accountants, financial statements, or markets in which its securities trade
What is a Form 144?
A company can issue securities to certain qualified buyers without registering the securities with the SEC but must notify the SEC that it intends to do so
What are Forms 3,4, and 5?
They detail the beneficial ownership of securities by a company’s officers/directors.
What kind of transactions are included in Other Comprehensive Income?
- Foreign Currency translation gains/losses
- Adjustments for minimum pension liability
- Unrealized gains/losses from cash flow hedging derivatives
- Unrealized gains/losses from available-for-sale securities
How are trading securities measured under U.S. GAAP (both income statement and balance sheet)?
Unrealized gains/losses are recognized on the income statement and reported at fair value on the balance sheet
How are held-to-maturity securities measured under U.S. GAAP (both income statement and balance sheet)?
They are amortized on the balance sheet (issue price minus principal plus/minus amortized discount/premium); recognized on neither the income statement nor OCI
How are available-for-sale securities measured under U.S. GAAP (both income statement and balance sheet)?
Unrealized gains/losses are reported on OCI and reported at fair value on the balance sheet
What is the standard costing method?
Assigning predetermined amounts of materials, labor, and overhead to goods produced
What is the retail method?
Measure inventory at retail prices then subtract gross profit to get cost
What is the cost model for measuring PP&E?
PP&E is reported at amortized cost
What is impairment?
When the carrying value exceeds the recoverable amount
What is the recoverable amount under IFRS?
Greater of fair value minus selling costs, or value in use (PV of asset’s future cash flows)
What is the revaluation model for PP&E? Between U.S. GAAP and IFRS, under which one is this allowed?
Fair value minus accumulated depreciation. Only allowed under IFRS
What types of marketable securities can be measured at historical cost under U.S. GAAP?
- Unlisted equity investments
2. Loans/Notes Receivable
What is the Current Ratio?
Current Assets/Current Liabilities
What is the Quick Ratio?
(Cash + Marketable Securities + Receivables)/Current Liabilities
What is the Cash Ratio?
(Cash + Marketable Securities)/Current Liabilities
What is the Debt Ratio?
Total Debt/Total Assets
What is Financial Leverage?
Total Assets/Total Equity
What are 3 examples of cash inflows from operating activities under U.S. GAAP?
- Cash from customers
- Interest/dividends received
- Sales proceeds from trading securities
What are 4 examples of cash outflows from operating activities under U.S. GAAP?
- Cash paid to employees/suppliers
- Acquisition of trading securities
- Interest paid on debt/leases
- Taxes
What are 3 examples of cash inflows from investing activities under U.S. GAAP?
- Sale proceeds from fixed assets
- Sale proceeds from debt/equity investments
- Principal received from loans to others
What are 3 examples of cash outflows from investing activities under U.S. GAAP?
- Acquisition of fixed assets
- Acquisition of debt/equity investments
- Loans made to others