|This course is designed to help you become a sophisticated user of financial statements. Concepts from accounting, economics, finance and strategy will be employed to build an overall assessment of a firm’s prospects with accounting policy choices for various economic events discussed in detail (and explored via cases, many using actual financial statements). This course does not take the next steps of projecting a firm’s future economic performance and valuing the firm. These next steps are emphasized in Business 30130. This course is likely to be useful to those preparing to take the CFA exams or the CPA exam.
We will explore how particular accounting policy choices affect a firm’s financial statements and assess whether the resulting financial statements fairly reflect a firm’s underlying economics. If they do not, then we will consider possible adjustments to reported financial statements in order to obtain the cleanest possible inputs for use in equity valuations, credit and other analyses.
This course covers a less specialized set of financial reporting topics than does Business 30117. Topics typically discussed include the accounting for: revenue; earnings per share; stock-based compensation; investments and derivatives; fair value accounting; inter-corporate investments; franchising; lessee accounting; pensions and other post-employment benefits. Where significant, differences between US GAAP and IFRS (international financial reporting standards) are highlighted.