|The course is designed to provide the tools necessary to conduct a reasonably sophisticated financial statement analysis. The focus is on the use of financial statements, although this requires some understanding of the process by which financial statements are produced.
We will not limit our study to the financial statements per se. We will also work with supplemental disclosures, which help the analyst to interpret the financial statements and to understand better the economic transactions that gave rise to them. The techniques we will employ will be useful for both equity and credit analysis. Although this course does not cover forecasting or valuation per se, a thorough understanding of financial reporting issues is critical to being able to do a thoughtful financial forecast and valuation. As a result, this course will be especially useful as a prelude to Financial Statement Analysis (B30130).
Topics covered typically include: pro forma financial statements; revenue recognition; EPS; stock-based compensation accounting; accounting for investments and derivatives; fair value accounting; accounting for income taxes; accounting for pensions and other post-employment benefits; lease accounting Where significant, differences between US GAAP and international standards (IFRS) will be highlighted.
Class discussions will draw from actual financial statements. Short cases based on actual financial statements will be required. There will most likely be two exams.
The course is likely to prove useful to those preparing to take the CFA exams or CPA exam.