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Study Session 6: Financial Reporting and Analysis: An Introduction


Hello All,

I was reviewing my notes, and I got confused between these two concepts. I have that CAPEX = Capital used to buy fixed assets - Capital received from selling fixed assets.

Now, FCInv is also equal to cash spent on fixed assets - cash received from selling fixed assets.

Aren’t these two terms the same thing?

Moreover, I googled analystforum, and I found that FCInv = Capex - proceed from sales. Now, I am completely lost.

Can someone please guide me using an example?

Best regards,



Hi guys,

in the context of “FRA” should we assume IFRS or USGAAP?

difference between incidental vs non-incidental materials and supplies?

Materials and supplies are the things you purchase but don’t resell to customers. They must:

  • be tangible assets 
  • have a useless life less than 12 months (or else they’d be capital assets?)
  • NOT be inventory to be resold to customers

I found Treas. Reg. 1.462-3 but it’s written in legalise. Examples of materials and supplies might be pens, office paper, ink toner, lubricant for machines, replacement blades for machinery etc.

Does anyone know the difference between incidental vs non-incidental materials/supplies?


Is there anyone who summurised the differences in accounting principales between US GAAP and IFRS as presented in the CFA?
It would be helpful if u could share it.
Thanks in advance for yr help.
Best luck

Difference between writeoffs and writedowns


I am sorry for asking this basic question. I tried googling it, but I didn’t quite understand what’s on wikipedia. After reading wiki, I believe writedowns are used for impaired assets, and writeoff is a general term used to indicate a reduction in value. However, if this is the case, where there are two different words for the same concept? Can someone please guide me? If there is any self-help type document, I can read it. I am a bit concerned about this because the curriculum uses these two words quite often.

Thanks in advance.

22a: Does the term "financial reporting" only concern outsiders?

I see that financial reporting is important for creating balance sheets to convince lenders, buyers, or stock market investors that you’re solvent

Does that mean if you have a family-owned business with less than a million dollars in revenue, that you dont need to engage in formal financial reporting?


Am I correct in assuming goodwill can only be capitalized if a company has made an aquisition?

And if so, would the goodwill be on the balance sheet forever (assuming impairment = 0)

I’m a tad bit confused..

22b Income statement vs Statement of Income

The Schweser text states:
The statement of comprehensive income reports all changes in equity expect (I think they meant EXCEPT) for
shareholder transactions (e.g., issuing stock, repurchasing stock, and paying dividends).


I am from non-commerce background, appearing for L1 in june 2014. I am doing FRA these days and finding it very difficult to remember diifferences suggested by US GAAP and IFRS. Almost every topic has two things to remember one from US GAAP one from IFRS. How do you guys do it?