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TopicWeightingsinCFALevel金程教育2010年CFA一级讲FinancialStatement讲师：薛日期：2010年8 地点：上 100%ContributionBreeds 2010By2TopicWeightingsinCFALevel金程教育2010年CFA一级讲FinancialStatement讲师：薛日期：2010年8 地点：上 100%ContributionBreeds 2010By2BasicBalanceSheet:MeasurementofAsset,Liabilities&EquityIncomeStatement:RevenueRecognitionCashFlowStatement:CFO;CFI;CFFRatioAnalysisLong-termAssets:CapitalizeorExpense;Depreciation;AROFinancingLong-termLiabilities:BondR29:FinancialStatementAnalysis:AnR30:FinancialReportingR31:FinancialReportingR37:Long-LivedR38:IncomeR39:Long-TermLiabilitiesandR32:UnderstandingtheR33:UnderstandingtheR34:UnderstandingtheR35:FinancialAnalysisFinancingLong-termLiabilities:Off-B/SIncomeFinancialReportingInternationalStandardsR40:FinancialReportingQuality:RedFlagsandAccountingWarningR41:AccountingShenanigansontheCashFlowR42:FinancialStatementAnalysis:R43:InternationalStandards100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010By34SessionStudySessionEthics&ProfessionalStudySession2-QuantitativeStudySession4-StudySession7-FinancialReportingandStudySessionCorporate8StudySessionPortfolioManagementandWealth5StudySession13-EquityStudySession15-FixedStudySession5StudySessionAlternative3WhyareweAfundamentalAnanalystneedsFinancialStatementsBasedonaboveassumption,weneedtoanswer2WhatWhyareweAfundamentalAnanalystneedsFinancialStatementsBasedonaboveassumption,weneedtoanswer2WhatcanfinancialstatementstellanHowoneartharefinancialstatements1.Basic(Reading29,So,weareheretoseehowabovequestionsshallbe100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010By56ObjectiveofFinancialFinancialStatementsStandard–settingProfessionalorganizationsofaccountantsandauditorsthatestablishreportingQualitativecharacteristicsofF.S.ConstraintsofF.S.FinancialStatementAnalysisFrameworkAdditionalInformationFinancialAccountingStandardsBoard(FASB)&GenerallyAcceptedAccountingPrinciples(GAAP)intheU.S.InternationalAccountingStandardsBoard(IASB)&FinancialReportingStandards(IFRS)outsidetheTheAccrualFinancialreportingstandardsKeyfinancialstatementRegularlyGovernmentagenciesthathavelegalauthoritytoenforcecompliancewithfinancialreportingstandards.TheSecuritiesandExchangeCommission(SEC)intheU.S.TheFinancialServiceAuthority(FSA)intheU.K.MostnationalauthoritiesbelongtotheInternationalOrganizationSecuritiesCommissions100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010By7FinancialStatementsObjectiveofFinObjectiveofFinancialFinancialMaking100%ContributionBreeds 2010By9MajorFinancialFinancialStatementsObjectiveofFinObjectiveofFinancialFinancialMaking100%ContributionBreeds 2010By9MajorFinancialFinancialKeyfinancialBalancesheet—reportsthefirm’sfinancialpositionatapointinIncomestatement—reportsonthefinancialperformanceofthefirmoveraperiodoftime.Cashflowstatement—reportsthecompany’scashreceiptsandpayments.Statementofchangesinowners’equity—reportstheamountsandsourcesofchangesinequityinvestors’investmentinthefirmoveraperiodoftime.FinancialstatementnotesandsupplementaryFinancialstatementnotesSupplementaryOtherinformationSECfilingsProxyCorporatereportsandpressThestatementofchangesinowner’s100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByFinancialposition Changeinfinancial Thebalance Theincome ThecashflowAssets=liabilities+ •Operatingcash •InvestingcashGains& •FinancingcashNetincome NetcashinfloworoutflowforthefinancialyearTimelessVS.RelevanceandCostVS.BalancebetweenQualitativeSec•FormS- Form10-K•DEF-14AProxyForm10-Q季•Form8- FormQualitativecharacteristicsofCreditandequityinvestorGovernmentandrelativeauthorityThegeneralpublicandotherexpense,lossProvideafairpresentationoffinancialposition,financialperformanceandcashflowMajorFinancialBalanceIncomeStatementofCashStatementofStockHoldersStatementofComprehensiveAuditorsSupplementaryFinancialStatementAnalysisPurposeandCollectProcessAnalyze/InterpretDevelopFollowOtherrelevantOtherrelevant100%ContributionBreedsCopyRight2010By100%ContributionBreedsCopyRight2010ByFinancialstatementanalysisAuditisindependentreviewOtherrelevantOtherrelevant100%ContributionBreedsCopyRight2010By100%ContributionBreedsCopyRight2010ByFinancialstatementanalysisAuditisindependentreviewofanentity’sfinancialstatementsbyanindependentaccountingfirm.Objective:auditorprovidesanopiniononthefairnessandreliabilityofthefinancialstatement.Thestandardauditor’sUnqualifiedopinion:freefrommaterialomissionsandQualifiedAdverseInternalcontrolisrequiredtobeprovidedbycompany’smanagementundertheSarbanes-OxleyAct.100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010BySourcesof1.ArticulatethepurposeandcontextoftheNeeds&StatementofpurposesandAlistofspecificTimetable&budgeted2.CollectFinancialOrganizedFinancialdataComplete3.ProcessDatafrompreviousAdjustedCommon–sizeRatios&theprocessedInputProcessedAnalytical5.Conclusions&AnalyticalAnalytical6.FollowPeriodicallyUpdatedreports&QuarterlyorsemiannualThemostupdatedinformationonthemajorfinancialstatementsandfootnotesSecuritiesandExchangeCommission(SEC)Form8-AcquisitionsordisposalsofmajorChangesinitsChangesincorporateForm10-AnnualfinancialForm10-QuarterlyfinancialProxyIssuedtoshareholderswhentherearemattersthatrequireashareholdervoteProvidinginformationabouttheboardmembers,CorporatereportsandpressreleasesPublicFinancialstatementnotesProvidinginformationaboutaccountingmethods,assumptions,andestimatesProvidingadditionalinformationaboutbusinessacquisitionsordisposal,legalactions,employeebenefitplans,significantcustomers,salestorelatedparties,andsegmentsofthefirmAreSupplementaryOperatingincomeorsalesbyregionorbusinessReservesforanoilandgasInformationabouthedgingactivitiesandfinancialManagement’sDiscussionandAnalysisProvidinganassessmentofthefinancialperformanceandconditionofacompanyfromtheperspectiveofitsResultsfromoperations,withadiscussionoftrendsinsalesandexpenseCapitalresourceandliquidity,withadiscussionoftrendsincashflowAgeneralbusinessoverviewbasedonknownFinancialReportingIASBvs.100%ContributionBreedsCopyRight2010By100%ContributionBreedsCopyRight2010ByIASBvs.IASB&InternationalstandardsconvergencewillbeFinancialReportingIASBvs.100%ContributionBreedsCopyRight2010By100%ContributionBreedsCopyRight2010ByIASBvs.IASB&InternationalstandardsconvergencewillbediscussedindetailsinReading100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010ByAncoherent/effectivefinancialreportingFinancialstatementelements1.ElementsrelatedtoIncomeandRevenues,expenses,gains,losses,andcomprehensiveincomeAssetTheusingoftheAresourcefromwhichfutureeconomicbenefitisexceptedTodefinethecriteriaFutureeconomicTodefineassets4.AllowthevaluesofassetstobeadjustsMeasurementofFS1.Historicalcost2.Currentcost3.Realized(settlement)value4.Presentvalue5.Fair2.No3.Classifiedbalancesheet4.Minimumrequiredinformation5.Comparativeinformation 1.Fairpresentation2.Goingconcernbasis3.Accrualbasis4.ConsistencybetweenperiodsEffectivefinancialreporting Purposeofthenoexplicitstandardexistsonanissuei.e.principles–basedapproachtoi.e.rules–basedapproachtostandardsObjectivesoffinancialOneDifferentobjectivesforbusinessandnon-businessfinancialstatementMoreemphasisongoingconcernassumptionQualitativeRelevanceandreliabilityaretheprimaryFlowofinformation& FlowofinformationinanaccountingJournalentriesandadjustingGeneralledgerandT-TrialbalanceandadjustedtrialFinancialstatementAccountingOwnersFlowofinformation& FlowofinformationinanaccountingJournalentriesandadjustingGeneralledgerandT-TrialbalanceandadjustedtrialFinancialstatementAccountingOwners’Equity=ContributedCapital+Revenue–R/EE=R/EB+NI– (NI=Revenue–SO,A=L+ContributedCapital+A=L+ContributedCapital+R/EB+Revenue–Expense–100%ContributionBreedsCopyRight2010By100%ContributionBreedsCopyRight2010ByAccrualAccrual100%ContributionBreedsCopyRight2010By100%ContributionBreedsCopyRight2010ByunearnedThefirmreceivescashbeforeitprovidesagoodorservicestocustomersAAccruedThefirmprovidesgoodsorservicesbeforeitreceivescashpaymentAnPrepaidThefirmpayscashaheadoftimeforananticipatedexpenseAnAccruedThefirmowescashforexpensesithasAHighlyvolatile,lesspredictiveforCFandincomes;Notdesirableforfirmswithcomplexoperationsandfinancingstrategies;DifficultforanalyzingbalanceSmoothedearningEnhancedpredictabilityoffutureCF;Provideincrementalinfor.relatedtofirm’sprofitability;CanbeLefttomanagerialEconomicCurrentLong-livedowner’sequityOwner’sequity=contributedcapital-dividend(currentCreditorclaimsonthecompany’sCurrentLong-termOwner’sresidualAdditionalpaid-inRetainedOthercomprehensiveTheinflowsofeconomicInvestmentnetincome(current32&TheoutflowofeconomicCostofgoodOtherAccrual2.Balance100%ContributionBreedsCopyRight2010By100%ContributionBreeds 2010ByBalanceSheet—Accrual2.Balance100%ContributionBreedsCopyRight2010By100%ContributionBreeds 2010ByBalanceSheet—BalanceSheet—Accountrewardedindifferentways.PrinciplefinancialBalanceBalancesheet(ofan100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010ByprobablecurrentandfutureeconomicbenefitsobtainedorcontrolledprobablefuturesacrificesofeconomicresidualinterestinthenetCurrentliabilitiesAccounts¬espayableIncometaxespayableCurrentportionoflong-termdebtUnearnedrevenueAccruedliabilities(accruedLong-termLong-termCapitalleaseobligationDeferredtaxesliabilitiesOwner’sequityPreferredstockCommonstockRetainedearningsOtherequityCurrentCashandcashequivalentsAccountsandnotesreceivablePrepaidexpensesDeferredtaxesassetsMarketablesecuritiesPlant,property,andMachinery&Otherassets CashreceivedinRecognizingrevenuebeforecashisreceivedCashpaidinRecognizinganexpensebeforecashispaidBalanceSheet—Componentsof Contributedcapital(commonandpreferredPreferredCommonAuthorizedIssuedBalanceSheet—Componentsof Contributedcapital(commonandpreferredPreferredCommonAuthorizedIssuedOutstandingRetainedTreasurystock(repurchasedNovotingDoesnotreceiveAccumulatedothercomprehensiveincome(underIFRS,noMinority(non-controlling)BalanceSheet—MeasurementMeasurementBases—relatetoeconomicHistoricalcost:thevaluewasexchangedattheacquisitionFortangibleasset:alsoincludesfreightcost,andothercostsincurredtomaketheassetoperable.Fairvalue:thevalueofanassetorliabilityinanarmslengthtransactionbetweenunrelatedwillingandknowledgeableparties.SuchGoodwill—theexcessofpurchasepriceoverthefairvalueoftheidentifiableassetsandliabilitiesacquiredinabusinessacquisition.100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByBalanceSheet— BalanceSheet—MeasurementBookvalueFairvalueofnetPurchaseLess:FairvalueofnetassetsAcquisitiongoodwillGoodwillshouldnotbeamortized,butshouldbetestedforimpairmentannuallyatthecashgeneratingunitlevel.100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010BybenefitisRecognizeassetsinthebalancesheet,whiletheeffectswillflowtotheincomestatementovertheasset’susefulGotoI/SwhentheinventoryisoverusefuloverusefulExpensesinthesellinggeneralthusBalanceSheet—Marketable BalanceSheet—Marketable Marketableinvestmentsecuritiesareclassifiedas Avilable-for-saleHeld-to-BalanceFairFairAmortizedHeld-to-maturitiesaredebtBalanceSheet—Marketable BalanceSheet—Marketable Marketableinvestmentsecuritiesareclassifiedas Avilable-for-saleHeld-to-BalanceFairFairAmortizedHeld-to-maturitiesaredebtsecuritiesacquiredwiththeintentthattheywillbeheldtomaturity.Tradingsecuritiesaredebtandequitysecuritiesacquiredwiththeintenttoprofitoverthenearterm.Available-for-salesecuritiesaredebtandequitiesthatarenotexpectedtobeheldtomaturityortradedinthenearterm.Income100%ContributionBreeds 2010By100%ContributionBreeds 2010ByIncomeStatement—Incomestatementformat—multi-stepNetrevenuesfromSalesofgoodsandCostofgrossOtheroperatingOperatingincomefromcontinuing3.Income+OtherIncomeandRecurringincomebeforeinterestandtaxesfromcontinuing–FinancingRecurring(pretax)incomefromcontinuing+/–UnusualorInfrequentPretaxEarningsfromContinuing–IncomeTaxNetIncomefromContinuing+/–CumulativeEffectofAccountingChanges(netofNet100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByBelowthe+/–IncomefromDiscontinuedOperations(netof+/–ExtraordinaryItems(netoftheIncomeStatement— Comprehensivemeasureallchangestoequityotherthanownercontributionsandequalsnetincome+othercomprehensiveOthercomprehensiveforeignIncomeStatement— Comprehensivemeasureallchangestoequityotherthanownercontributionsandequalsnetincome+othercomprehensiveOthercomprehensiveforeigncurrencytranslationgainsandadjustmentsforminimumpensionunrealizedgainsandlossesfromcashflowhedgingunrealizedgainsandlossesfromavailable-for-saleIncomeStatement—Unusualorinfrequentitems(nonrecurringreported“abovetheline”andpresentedonapretaxExtraordinaryLossfromexpropriationofGainsorlossesfromearlyretirementofUninsuredlossesfromnaturalForUSGAAPonly,IFRSDONOTusethisconceptDiscontinuedoperationsAccountingChangeinaccountingprinciple(mightbeChangeinaccountingestimate(prospectiveandnotabelowlineReported“belowtheline”andpresentedonnetofNetUnrealizedlossfromforeigncurrencytranslationUnrealizedgainsfromcashflowhedgeUnrealizedlossfromavailable-for-salesecuritiesComprehensiveincome100%ContributionBreeds 100%ContributionBreeds CopyRight2010By2010ByIncomeStatement— 2CompletionoftheearningIncomeStatement— Whenrevenueisrecognized,Increaseinassetandequity(inIncreaseinrevenueandexpenses(InAssuranceofPleasenotethataccrualbasisisusuallyusedinrevenue100%ContributionBreeds CopyRight2010By100%ContributionBreeds 2010ByEquityisaffectedthroughP/L.Don’tforgetthe“YouareconfidentaboutyourExpensesarerecognizedinthesameperiodastherevenueTheexpenseswhichcannotbedirectlytiedtorevenuegenerationareperiodcosts,suchasadministrativecosts.FirmscanmanipulateNetincomebyrecognizingrevenueearlierordelayingtheexpensesrecognitionFirmscanmanipulateNetincomebyrecognizingrevenueearlierordelayingtheexpensesrecognition“YouareconfidentaboutIncomeStatement— FiveIncomeStatement— Installmentsales:revenueandassociatedcostofgoodssoldarerecognizedonlywhencashisreceived.Itrecognizessalesandcostsasproportionsofcashcollectedeachperiod,basedonthegrossprofitmargin.Itisusedwhencollectibilitycannotbereasonablyestimated(e.g.realestatesales)Atdeliverymethod:revenueisrecognizedatthetimeofPercentage-of-completion(“POC”):revenueandIncomeStatement— FiveIncomeStatement— Installmentsales:revenueandassociatedcostofgoodssoldarerecognizedonlywhencashisreceived.Itrecognizessalesandcostsasproportionsofcashcollectedeachperiod,basedonthegrossprofitmargin.Itisusedwhencollectibilitycannotbereasonablyestimated(e.g.realestatesales)Atdeliverymethod:revenueisrecognizedatthetimeofPercentage-of-completion(“POC”):revenueandassociatedcostandprofitarerecognizedastheworkisperformed.ThePOCismeasuredbythetotalcostincurredtodatedividedbythetotalexpectedcostoftheproject.Itisappropriatewhentheproject’scostandrevenuecanbereliablyestimatedorlongtermCostrecovery:(similartotheinstallmentsalesmethodbutismoreconservative)Profitisrecognizedonlywhencashcollectedexceedscostsincurred.ItisusedwhencollectibilityishighlyuncertainCompletedcontract:revenueandcostarenotrecognizeduntiltheentirecontractiscompleted.Itmustbeusedforshort-termcontractsaswell.ItisusedwhentheoutcomeofaprojectcannotbereliablymeasuredortheprojectisshortUndereithermethod,expectedlossmustberecognizedUnderIFRS,ifoutcomeoftheprojectcannotbereliablymeasured,costsareexpensedwhenincurred,profitisrecognizedonlyatcompletion.(Cost100%ContributionBreeds 2010By100%ContributionBreeds 2010ByRevenuerecognition–Long-termRevenuerecognition–installmentAhasacontracttobuildashipfor$1,000andareliableestimateofthecontract’stotalcostisAProjectBsellsapieceoflandfor1,000.Theoriginalcostofthelandwas800.CollectionreceivedbyBforthesaleareasfollows:ForLong-termForinstallmentWhentherearereliableestimatesofrevenues,costsandcompletiontime(3factors),usepercentage-of-completion(POC)method.Whenthereisnothingabnormal,useSalesBasisMethod.BInstallment Whenthereisnocontractor,Oneormoreofabove3factorsis/areunreliable,useappliestoshort-termcontracts.Whenthereisnowaytoestimatethethecostsofthegoodsandservicesareknown,useInstallmentSalesMethod.Cost Accum.Rev.incurred/totalestimatedcost)Accumulated.Rev.attheendoflastyear=revenue–actualcostCompleted-norevenueorexpenseswillberecognizeduntilthelastyearunderthecompletedcontractareuncertaintiessurroundingthecollection,useCostRecoveryMethod. Expectedprofit(1000-800)/1000= Net Cost CompletedcontractInstallmentProfitisrecognizedascashiscollected.Profit=cashcollectedduringtheperiod*(totalexpectedprofit/sales)Completed-norevenueorexpenseswillberecognizeduntilthelastyearunderthecompletedcontract0 0000Net Net 100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByIncomeStatement— IncomeStatement— .100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByIncomeStatement—Impact POCvs.Completed-contract:ImpactonIncomeStatementIncomeStatement— IncomeStatement— .100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByIncomeStatement—Impact POCvs.Completed-contract:ImpactonIncomeStatement—Other Bartertransaction:2partiesexchangegoods/serviceswithoutcashUSGAAPrecognizerevenueatfairvaluebasingonhistoricalIFRSrecognizerevenueatfairvaluebasingonsimilarnonbartertransactionswithunrelatedpartiesRound-triptransaction:thesaleofgoodstoonepartywiththesimultaneouspurchaseofalmostidenticalgoodsfromthepartyGross(sales&COGSareseparated)andnetreportingofrevenue(onlytheprofitisreportedasrevenue);criteriatousegrossmethodunderUSGAAPare:thefirmmustbetheprimaryobligor/beartheinventoryriskandcreditrisk/beabletochooseitssupplier/havereasonablelatitudetoestablishtheprice100%ContributionBreeds 2010By100%ContributionBreeds CopyRight2010ByDuringtheCompletedNetIncomeCashTotalShareholderRatioofLiabilitySimilartopercentageofcompletionmethod;UsedwhennowaytoestimatethelikelihoodofcollectingtheproceedsbutcostsofthegoodsandservicesareknownShouldcomparecashflowstatementandincomestatementSimilartothecompletedcontractmethod;Profitisnotrecognizeduntilallaspectsofthesale(revenuesandcosts)areUsedwhencostsarenotknownorwhenuncertaintiessurroundthecollectionoftheproceeds.MustrelyonthecashflowstatementSalesarerecognizedwhencashisreceived,butnogrossprofitisrecognizeduntilthecostsisfullyrecoveredbycashpaymentsTheIfcashisreceivedbeforeproviding,revenueisnotrecognizeduntilitisearned.Saleofmagazine;creditcardfees;equipmentleasesbasedonusageextensionofthesalesUsedforlong-termprojectswhenthereisacontractandtherearereliableestimatesoftherevenues,costsandcompletiontime.Measurementoftheproportionofwork1)Anengineeringestimateorphysical2)TheratioofincurredcoststothetotalestimatedwilllagUsedforlong-termprojectswhenthereisnocontractorestimateofrevenues/costsareunreliable.CashFlow4.CashFlow100%ContributionBreeds 2010By100%ContributionBreedsCopyRight2010ByCashFlowStatement—Typesof CashFlow4.CashFlow100%ContributionBreeds 2010By100%ContributionBreedsCopyRight2010ByCashFlowStatement—Typesof U.S.GAAPCashFlowCashflowsfromOperatingCashflowsresultingfromtransactionthataffectafirm’snetCashFlowStatement—Typesofcashflow(presentedindirectOperatingcashCashcollectionsfromCashinputsintothemanufacturingorretailprocessCashoperatingexpensesCashinterestexpenseCashtaxpayments.SalefromoracquisitionoftradingsecuritiesInvestingCashflows:PurchasesofPP&EInvestmentsinaffiliatesPaymentsforbusinessesacquiredProceedsfromsalesofassetsFinancingCashflows:CashdividendsIncreasesordecreasesinshort-termLong-termborrowingsandpaymentsoflong-termborrowingsStocksalesandrepurchases100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByCashcollectedfromCashpaidtoemployeesandInterestanddividendsCashpaidforotherSaleproceedsfromtradingAcquisitionoftradingInterestTaxesCashflowinfoishighlyimportantkeytothesurvivalofanCashFlowrelatedanalysisarewidelyOperatingcash+Investingcash+Financingcash=Changeincashbalanceforthecurrentyear+Beginningcash=Endingcashthefirm’sprimaryactivitiesofproductionandtradeCashCashtransactiontoacquireordisposeoflong-termassetsCashpaidforpurchaseofplantandequipmentCashformsaleofplantandtransactionsthroughwhichthefirmraisesorrepayscapitalCashreceivedfromshareCashreceivedformbondCashdividendCashFlowStatement—Typeof U.S.GAAPCashFlowCashflowsfromInvestingCashflowsresultingfromtheacquisitionordisposaloflong–termassetsandcertaininvestmentsCashFlowStatement—TypeofCashFlowStatement—Typeof U.S.GAAPCashFlowCashflowsfromInvestingCashflowsresultingfromtheacquisitionordisposaloflong–termassetsandcertaininvestmentsCashFlowStatement—Typeof U.S.GAAPCashFlowCashflowsfromFinancingCashflowsresultingfromtransactionthataffectafirm’scapital100%ContributionBreeds 2010By100%ContributionBreeds CopyRight2010ByCashFlowStatement—IFRSvs. CashFlowStatement—investingandfinancing Noncashinvestingandfinancingactivitiesarenotreportedinthecashflowstatement(theydonotresultininflowsoroutflowsofcash)butmustbedisclosedineitherafootnoteorsupplementalscheduletotheCFExample:afirmrequiresrealestatewithfinancingprovidedbytheseller(thetransactionisequivalentofborrowingthepurchaseprice)Itisnotreportedasaninvestingandfinancingactivityinthecashflow100%ContributionBreeds CopyRight2010By100%ContributionBreeds CopyRight2010ByU.S.InterestCFOorInterestCFOorDividendsCFOorCFOorBankCashInterestandtaxespaidmustbedisclosedinfootnotesifnotpresentedonthestatementofcashTaxcashflowsmustbeseparatelydisclosedDirectorindirect;directisPrincipalamountsofdebtPrincipalpaidonProceedsfromissuingPaymentstoreacquireDividendspaidtoSaleproceedsfromfixedAcquisitionoffixedSaleproceedsfromdebt&equityAcquisitionofdebt&equityPrincipalreceivedfromloansmadetoLoansmadetoCashFlowStatement—Presentation DirectConvertsanaccrual-basisincomestatementintoacash-basisincomeCashFlowStatementCashFlowStatement—Presentation DirectConvertsanaccrual-basisincomestatementintoacash-basisincomeCashFlowStatement—HowtocalculatethecashDirectToeachincomestatementSubtractedbychangesinAddedbychangesinIndirectMethod(forCFONetincomeisconvertedtooperatingcashflowbymakingadjustmentsfortransactionsthataffectnetincomebutarenotcashtransactions.IndirectMethod(forCFONetAdd:non-cashcharges(depreciation&Add/less,lossorgainnotrelatingtooperatingLess:changesinworkingAbasicsetting:ToanCashin:Cashout:100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010ByCashFlowStatement—CashFlowStatement—CalculationofCFO—DirectCalculationofCFO—IndirectNetAdd:allnoncashchargestoincome(dep&Less:G/Lresultedfromfinancingorinvestingcashflows(e.g.,gainsfromsaleofland);Less:allnoncashcomponentsofAddorsubtractchangestoB/SoperatingaccountsasIncreasesintheoperatingassetaccounts(useofcash)aresubtracted,whiledecreases(sourcesofcash)areaddedIncreasesintheoperatingliabilityaccounts(sourcesofcash)areadded,whiledecreases(usesofcash)aresubtracted.Cashcollection=Cashinputs=CashexpensesCashinterestCash=100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010By—Δworkingcapital(excludingcash,loan,dividendpayablesandNote:ΔheremeansNet++/-L/Gnotrelatingtooperating－Δinventories++ΔO/P＋++ΔT/P+ΔDTL－net—－operating－interest－incometaxCashFlowStatement— InordertokeeptheB/SWhenliabilityincreases,thecashhastoWhenliabilitydecrease,thecashhastodecrease.Accountpayableincreases,CashAccountpayabledecreases,Cash-Whenotherassetsincrease,thecashhastoWhenotherassetsdecrease,CashFlowStatement— InordertokeeptheB/SWhenliabilityincreases,thecashhastoWhenliabilitydecrease,thecashhastodecrease.Accountpayableincreases,CashAccountpayabledecreases,Cash-Whenotherassetsincrease,thecashhastoWhenotherassetsdecrease,thecashhastoincrease.Accountreceivable/inventoryincreases,CashAccountreceivable/inventorydecreases,CashMemorizingSetting：Cashinflow:+;Cashoutflow:-ImagineaB/S.Cashisoneitemofasset.100%ContributionBreedsCopyRight2010By100%ContributionBreeds CopyRight2010ByCashFlowStatement—Example:CashFlowStatement—Example:Ananalystgatheredthefollowinginformationaboutacompanyforafiscal BalanceSheetasof31Dec BalanceSheetasof31Dec IncomeAdditionalThebookvalueandtheNBVofPP&EdisposedinFY06is500.(Tosimplifythescenario)GainondisposalofFAInterestexpensesIncometaxexpensesNetincomeIfthecompanyisnotsubjecttoincometaxes,thenetcashflowfromoperationsforthefiscalyearisclosestto:A.＄20.000C.100%ContributionBreedsB.CopyRight2010By100%ContributionBreeds CopyRight2010ByCashpaidforDepreciationCashpaidforCashpaidtoCashcollectedfromCashpaidforinteresttoCashcollectedforsaleof+OtherCashFlowStatement—Example:CashFlowStatement—CalculationofCFO(ExampleCashCalculationsofCashusedinpurchaseoffixedPayattentiontothemovementoffixedassets.(openingNBV+purchasing–occurringdeprecia