Study Session 6: Financial Reporting and Analysis: Quality of Financial Reports and Financial Statement Analysis
Hi - have 2 specific questions regarding tax credits:
1. Looking at a company that made a chunk of earnings from the unwind of a deferred tax asset from intangibles. Shouldn’t an unwind be 0 net impact on earnings or what are the steps impacting the financial statements? Or has an expense been incurred before and hence the unwind leads to the positive earnings impact?
2. What is an DTA related to unused capital allowance? How is the DTA booked?
Interested in Group study,Anyone from Lucknow.
Does the following item come under the head ‘Investments’ on a bank’s balance sheet:
“Assets included in disposal groups classified as held for sale”
If not, which head does it come under?
I have been studying MJ companies and I am having a hard time figuring out the relationship between biological assets and CFO - cash flow from operations.
So my theory is: FV adjustments to inventories when biological assets are harvested could potentially understate CFO.
I’ll detail out a scenario and need a second set of eyes to determine if my accounting is correct or not.
Example (numbers are completely theoretical):
I understand that current service cost for pensions is under operating expense.
where is PAST service cost listed under within the income statement? Assuming IFRS
The question asks what is the impact to the company’s interest coverage ratio by excluding the investment in associates. The answer provided by the curriculum is that it is not affected. As interest coverage = EBIT / interest expense, I understand that the asset “investment in associates” does not affect that equation. However, my line of thinking is that the associated equity income (or lack thereof in this case) would decrease EBIT and therefore the interest coverage ratio. Can anyone explain if I am missing something here?
- Lessor use of finance (capital) leases
- Lessee use of operating leases
Not understanding why these are issues?
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The right is B. Could anyone explain me how?
Has anyone understood what goodwill offset against equity is and means?
Usually seeing goodwill as asset account, so wonder if and when goodwill is offset? Do companies have a choice?
Bit confused regarding the tax rate to use to generate UFCF. Do you rather take the absolute cash taxes from the cash flow statement or the implied tax rate from the income statement and apply the implied tax rate to the EBIT?
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