Intentional accounting exam training
Exam training
Case 1
Chapter 1 Basics of financial reporting
Chapter 2 International accounting differences
Chapter 3 The process of harmonization
Case 1
Case of Sanofi – Aventis
Case “Old habits die hard”
Case 2
Chapter 11 Basics of interpretation of financial statements Chapter 30 Interpretation of financial statements
Chapter 31 Techniques of financial analysis
Calculate ratios and conduct the analysis
Case 2
Calculate
Profitability
Profit margin = net profit / sales
Return on assets = operating profit/total assets
Return on equity = net profit / total equity
Coverage
Debt to total assets = total debt / total assets
Times interest earned (interest coverage ratio)= income before interest and taxes / interest expenses
Case 2
Liquidity
Current ratio = current assets/current liabilities
Acid-test ratio = (current assets – inventory)/curr. liab.
Efficiency
Receivables turnover = (credit) sales / average accounts receivables
Inventory turnover =COGS/average inventory
Asset turnover = sales/total assets
Exercise 1
Cost of equipment
Chapter 12 Fixed tangible assets
PPE: measurement
Initial measurement
Subsequent costs
Measurement subsequent to initial recognition Derecognition
PPE: initial measurement
An item of property, plant and equipment that qualifies for recognition as an asset should initially be measured at its cost
The cost of an item of property, plant and equipment comprises its purchase price, including import duties and nonrefundable purchase taxes and
any directly attributable costs of bringing the asset to working condition for its intended use;
the initial estimate of the costs of dismantling
PPE: initial measurement
Examples of directly attributable costs are: cost of site preparation
initial delivery and handling costs
installation and
Case 1
Chapter 1 Basics of financial reporting
Chapter 2 International accounting differences
Chapter 3 The process of harmonization
Case 1
Case of Sanofi – Aventis
Case “Old habits die hard”
Case 2
Chapter 11 Basics of interpretation of financial statements Chapter 30 Interpretation of financial statements
Chapter 31 Techniques of financial analysis
Calculate ratios and conduct the analysis
Case 2
Calculate
Profitability
Profit margin = net profit / sales
Return on assets = operating profit/total assets
Return on equity = net profit / total equity
Coverage
Debt to total assets = total debt / total assets
Times interest earned (interest coverage ratio)= income before interest and taxes / interest expenses
Case 2
Liquidity
Current ratio = current assets/current liabilities
Acid-test ratio = (current assets – inventory)/curr. liab.
Efficiency
Receivables turnover = (credit) sales / average accounts receivables
Inventory turnover =COGS/average inventory
Asset turnover = sales/total assets
Exercise 1
Cost of equipment
Chapter 12 Fixed tangible assets
PPE: measurement
Initial measurement
Subsequent costs
Measurement subsequent to initial recognition Derecognition
PPE: initial measurement
An item of property, plant and equipment that qualifies for recognition as an asset should initially be measured at its cost
The cost of an item of property, plant and equipment comprises its purchase price, including import duties and nonrefundable purchase taxes and
any directly attributable costs of bringing the asset to working condition for its intended use;
the initial estimate of the costs of dismantling
PPE: initial measurement
Examples of directly attributable costs are: cost of site preparation
initial delivery and handling costs
installation and