Study Session 5: Financial Reporting and Analysis: Intercorporate Investments, Post-Employment and Share Based Compensation, and Multinational Operations
Tomorrow I will be focusing on reading ethics and writing out formulas/key tables etc. What do you think are absolute must knows?
Obvious ones I can think of are:
Anyone’s finding this year’s FRA TTs and Mocks a tad more difficult this year? I’m a retailer and I was crushing the FRA last year. But the subject seems too harsh. Is it just me or is everyone getting crushed?
can someone explain why with the Equity method when we have to calculate the value of the investment at year end (same year when the acquirer has bought lets say 32% of a company and has significant influence) we are doing the following:
Value of investment at year end = Initial investment +%*Associate NI - %*dividends paid by Associate - Amortization of excess amount paid for PP&E. Should I consider the Amortization of excess amount paid for PP&E like an expense that decrease the NI?
When contribution > TPPC, it is similar to repayment of a loan. Since that’s an outflow we add the amount to CFF. It would mean increase in CFO, so we add the amount.
How would the reverse treatment be?
When TPPC > Contribution, and we are ‘borrowing’ would it mean an inflow and so we adjust CFF by subtracting the amount? And what about CFO?
If you are asked to calculate the total cash outflow related to post-employment costs with a defined benefit plan and a health care plan. What do you include? (Company uses IFRS)
P.S Good luck for the last week!
How would you go about calculating the periodic pension cost and the change in OCI for the below? THe mock solution doesn’t really make sense to me.
Beg benefit obligation 635
Plans assets beg. 592
Payments to retirees. 38
Past service costs 0
Current service costs 94
Actuarial gain due to change in assumptions 51
Actual return on plan assets 57
Discount rate. 8%
Expected Return on assets 10%
Once you translate your BS and IS using the temporal method, how do you know whether you have a net asset exposure or a net liability exposure?
Could you guys pls explain based on what formula is this expression?
The value of a call option on futures is equal to the value of a portfolio with a long bond position and a short futures position.
Is Intercompany transaction totally removed in Acquisition (Combination) method ? I refer to CFA reading page 49