Advanced Financial Statement Analysis FMGT 8030

At the end of this course the student will be able to:

• Outline the reporting under IFRS of the four categories of intercorporate investments including the use of different accounting methods: equity, proportionate consolidation and consolidation; and including the treatment of goodwill
• Contrast the purchase method, the pooling of interest method, and the acquisition method used in business combinations
• Evaluate the impact of each purchase method on reported financial results
• Interpret the implications on performance ratios of the different accounting methods used for intercorporate investments
• Evaluate the types of post-retirement benefit plans and their implications for financial reports
• Evaluate the measures of a defined-benefit pension plan’s liabilities, including the projected benefit obligation, accumulated benefit obligation, and vested benefit obligation
• Assess the impact on financial statements of international financial reporting standards (IFRS) for pension and other post-retirement benefits that permit some items to be reported in the footnotes rather than being reflected in the financial statements themselves, and pension plan footnote disclosures including cash flow related information
• Evaluate the underlying economic liability (or asset) of a company based upon pension and other post-retirement benefit disclosures
• Assess the main issues involved in accounting for share-based compensation
• Assess the impact on financial statements of accounting for stock grants and stock options, while considering the importance of companies’ assumptions in valuing stock grants and stock options
• Assess the impact of changes in exchange rates on the translated sales of the subsidiary and parent company
• Describe the effects of the current rate method and the temporal method on the parent company’s balance sheet and income statement and other scenarios
• Assess the translation effects of a subsidiary’s balance sheet and income statement on the parent company’s currency
• Analyze how the translation of a subsidiary’s financial statements will affect the subsidiary’s financial ratios using the current and temporal methods
• Analyze alternative accounting methods for subsidiaries operating in hyperinflationary economies

Effective as of Fall 2011