IMBA财政会计9合集

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Important dates
December 3, NO CLASS, preparation for report and presentation
December 17, report DUE, turn in a hardcopy in class, and email me an electronic copy. Electronic copies to be placed on class website
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Accounting Items: Recognized versus Disclosed
Accounting items whose economic impact on the firm can be measured with reasonable precision, are recognized in the I/S or B/S, such as the liabilities to the left of the dividing line in the previous slide.
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Grading Guideline
1. The format and contents of the report 2. The format and contents of the presentation 3. The presenter’s 精神面貌 4. The way to handle questions 5. English is lesser an issue
• Present value refers to discounting the nominal payments by an interest rate appropriate for the firm.
• Discounting is a mathematical computation whereby future flows are reduced to reflect the concept that money has time value. (See Appendix A at the back of the text.)
• Current liabilities are obligations that must be fulfilled within the current operating cycle which is almost always one year.
• Noncurrent liabilities are obligations that need not be fulfilled withine.
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Contingencies: Potential Liabilities
• Contingent liabilities are potential liabilities related to past events.
• The more probable the potential to become a legal obligation, the greater the rationale for recognizing it as a liability.
This week’s individual HW
• Page 197 of In-class exercises ONLY
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The Qualities of a Good Analyst Report
Format • Professional layouts • Smoothly divided into sections • Sections logically structured and connected • Clearly worded
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Classifications of Accounting Liabilities by Degree of Certainty on repayment dates and repayment amounts
Read examples 1-9 on page 478-450 of Stickney and Weil
• Contingencies are normally disclosed in footnotes. • But, FASB and IASC require the recognition of a loss and a
contingent liability, when, given past events, – It is probable that an asset has been impaired or a liability
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The Qualities of a Good Analyst Report
Contents 1. Summary of analysis 2. Introduction of covered company
2.1 Industry analysis 2.2. Company analysis 3. Quality of earnings analysis 4. Profitability analysis 5. Growth analysis 6. Earnings forecasts 7. Risk analysis 8. Valuation 9. Recommendation
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Liability Recognition
• An obligation is a liability if: 1. It involves a probable future sacrifice of resources and the amount of the sacrifice can be reasonably precisely measured. 2. There is little or no discretion to avoid the transfer 3. The transaction or event that gives rise to the obligation has already occurred
• A mutual promise (or executory contract) is not a liability because of item 3 above. This is, signing a contact is not a transaction.
• An example of a mutual promise is the customer promises to pay and the firm promises to deliver goods at a date. If this promise is in the form of a legal contract, it may give both parties rights but the rights are not yet considered assets and the obligations are not yet considered liabilities, because the transaction specified in the promises has not yet occurred.
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Liability Classification
• Liabilities are separated into current and noncurrent based on the length of time that will elapse before the obligation must be fulfilled.
I accept challenges to grading, but reserve the rights to make the final judgment!
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Obligation
A social, legal, or moral requirement, such as a duty, contract, or promise that compels one to follow or avoid a particular course of action. ()
• Current liabilities are not generally discounted because of the short period of time until they are to be resolved. The short period of time would cause the amount of any discount to be small enough to be considered immaterial.
• Probability of a potential liability is very difficult to measure. • In general, an obligation should be recognized as a liability if it
is probable that the firm will have make future sacrifices of resources. • Of course, the word probable is also difficult to measure.
incurred, and – The amount of the loss can be reasonably estimated.
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Liability Valuation
• In general, liabilities are presented on the balance sheet at the present value of payments needed to fulfill the obligation.