AC330 Financial Accounting, Analysis and Valuation
Table of content
AC330 Financial Accounting, Analysis and Valuation 1
Consolidated Balanced Sheet ................................................................................................... 3
“Clean surplus” accounting ............................................................................................................. 3
“Dirty surplus” accounting .............................................................................................................. 3
Revaluation of non-current assets ................................................................................................... 3
Accounting for inventory ................................................................................................................. 3
Purchase (acquisition) accounting method ............................................................................. 5
Steps in consolidation ....................................................................................................................... 5
Analysis of S’s equity with NCI ....................................................................................................... 6
Consolidated retained profits in the consolidated balance sheet – alternative check ................ 7
Consolidated statement of changes in equity ................................................................................. 7
Sunder (1975) ............................................................................................................................ 8
Aim/purpose ...................................................................................................................................... 8
Background/theory ........................................................................................................................... 8
Key findings - relationship between accounting changes to LIFO and stock price changes ..... 8
Prakash and Sinha (2013) ........................................................................................................ 9
Relevant past paper .......................................................................................................................... 9
Purpose .............................................................................................................................................. 9
Assumptions/backgrounds ............................................................................................................... 9
Key findings ....................................................................................................................................... 9
Systematic "mismatch" in firms' revenue recognition practices .................................................................... 9
whether analysts fully incorporate information about ∆DRC in sales and earning forecasts .................... 10
Impacts on the market - abnormal returns ................................................................................................... 10
Lent Term Content .................................................................................................................. 11
Balance sheet - Profitability analysis ............................................................................................ 11
Reformulated Balance Sheet .......................................................................................................... 11
Reformulated income statement .................................................................................................... 11
Indicators frequently used by analysts ......................................................................................... 11
Reformated cash flow statement ................................................................................................... 12
, Ratio analysis .................................................................................................................................. 12
Operating ROA ............................................................................................................................................ 12
Cash flow analysis ........................................................................................................................... 12
Stock-and-flow equations ............................................................................................................... 12
Summary on standard practice for intangibles ........................................................................... 12
Table of content
AC330 Financial Accounting, Analysis and Valuation 1
Consolidated Balanced Sheet ................................................................................................... 3
“Clean surplus” accounting ............................................................................................................. 3
“Dirty surplus” accounting .............................................................................................................. 3
Revaluation of non-current assets ................................................................................................... 3
Accounting for inventory ................................................................................................................. 3
Purchase (acquisition) accounting method ............................................................................. 5
Steps in consolidation ....................................................................................................................... 5
Analysis of S’s equity with NCI ....................................................................................................... 6
Consolidated retained profits in the consolidated balance sheet – alternative check ................ 7
Consolidated statement of changes in equity ................................................................................. 7
Sunder (1975) ............................................................................................................................ 8
Aim/purpose ...................................................................................................................................... 8
Background/theory ........................................................................................................................... 8
Key findings - relationship between accounting changes to LIFO and stock price changes ..... 8
Prakash and Sinha (2013) ........................................................................................................ 9
Relevant past paper .......................................................................................................................... 9
Purpose .............................................................................................................................................. 9
Assumptions/backgrounds ............................................................................................................... 9
Key findings ....................................................................................................................................... 9
Systematic "mismatch" in firms' revenue recognition practices .................................................................... 9
whether analysts fully incorporate information about ∆DRC in sales and earning forecasts .................... 10
Impacts on the market - abnormal returns ................................................................................................... 10
Lent Term Content .................................................................................................................. 11
Balance sheet - Profitability analysis ............................................................................................ 11
Reformulated Balance Sheet .......................................................................................................... 11
Reformulated income statement .................................................................................................... 11
Indicators frequently used by analysts ......................................................................................... 11
Reformated cash flow statement ................................................................................................... 12
, Ratio analysis .................................................................................................................................. 12
Operating ROA ............................................................................................................................................ 12
Cash flow analysis ........................................................................................................................... 12
Stock-and-flow equations ............................................................................................................... 12
Summary on standard practice for intangibles ........................................................................... 12
