Let’s put B/S and I/S in the same thread for sh*ts and giggles. Let’s get this thread going… B/S Operating Leases Increase Assets & Liabilities by the PV of lease payments. GO!
adjust debt to market value with an offsetting affect in comprehensive income (BS)
cap all leases if lifo? FIFO that ish remove good will
B/S Receivable sold ‘with recourse’ Add back to Current Assets Increase Current Liabilities
B/S LIFO Reserve Add to Assets and Equity.
I/S - subtract lease payment from COGS - subtract captalized interest expense - subtract lease interest expense edit: subtract interest expenses instead of add
*Remove Goodwill from Assets & Equity *unless there is a fair value
guarentees, commitments off BS are liabs. add to liabs and assets
B/S LT Debt Use Market Value instead of Book Value Adjust Liabilities & Equity
when you add capitalized interest to IS do you added it to EBIT as well to compute interest coverage or just to interest ?
gz2nyc Wrote: ------------------------------------------------------- > I/S > - subtract lease payment from COGS > - add captalized interest expense > - add lease interest expense you reduce COGS because earlier it was expensed as an operating item… its either in COGS or in Operating Expense. the next adjustment is deduct the extra interest portion (of the lease payment) from the net income (after tax). - add captalized interest expense (does this mean you add back all the previous lease payments made to net income (that is capitalised as interest expense) ?
If deferred tax liability is unlikely to reverse add it to equity. If it is like to reverse, reduce the DTL to the present value and put the difference inequity. If a DTA is likely to reverse, make sure you have a valuation allowance.
you’re right, my mistake phrasing it. It should be subtract the capitalized interest expense and lease expense. ahmadmaghfur Wrote: > - add captalized interest expense (does this mean > you add back all the previous lease payments made > to net income (that is capitalised as interest > expense) ?
how come on Mock (2: Sweet Home’s ?) they adjusted both the inventory and the COGS for LIFO?? I know you are supposed to adjust inventory up (add LIFO reserve to reflect true economic value of the asset), but why would you adj. NI ?? I though FIFO underestimated COGS and LIFO was the way to go… so why would you lower COGS like they did in the solution?? they say to add to NI resulting in higher return on equity. That doesn’t reflect economic reality no???
that question really piossed med off… b/c they said the co will adjust to fifo…stupid question…