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2.0. Analyzing Income Statement - Coggle Diagram
2.0. Analyzing Income Statement
Components
Revenue
Expense
Gains & losses
COGS
Gross (profit margin)
Operating expense
Operating income
Other income & expense
Income before tax
Income taxes
Net income
Revenue recognition
General principal
2 kiểu recognition
Credit sales
Payment in advance
5 - step process for recognizing revenue
(1) Identify the contract with a customer:
All parties have approved the contract and committed to perform
The entity can identify each party's rights & obligations
The payment terms can be identified
The contract has commercial substance
It is probable to collect consideration
(2) Identify the separate or distinct performance obligations in the contract.
the customer can benefit from the G&S on its own or combined with other resources that are readily available => dùng lẻ được ko?
The promise to transfer the G&S ca be identified separately from any other promises => hứa bán combo mà đưa riêng lẻ sao được?
(3) Determine the transactiono price: chú ý
Significant financing component: giá và ngày giao dịch
Variable consideration: discount, bonus ko?
Non-cash consideration: điều kiện kèm
Consideration payable to customer: khả năng trả tiền của KH
(4) Allocate the transation price to the performance obligations in the contract
Allocated based on
stand - alone price of each performance obligation
dù mua combo but hạch toán riêng lẻ thì sản phẩm tách lẻ được :>>>
(5) Recognize revenue when (or as) the entity satisfies a performance obligation
Entity has a present right to payment
Customer has legal title
Customer has physical possession
Customer has accepted the asset
Customer has the significant risks & rewards of ownerhship
Lưu ý cho (5)
Long-term contract
Loss (expected): ghi nhận liền
Outcome (expected)
Can be reliably measured (đo lường tin tưởng được): ghi nhận theo phần trăm hoàn thành
Cannot be reliably measured:
IFRS: ghi nhận revenue = cost & cost = cost, rồi nào nhận tiền thì ghi nhận revenue = revenue - revenue trước đó, cost = cost.
GAAP: ko ghi nhận revenue, có ghi nhận cost cho tới khi hoàn thành
Contract revision: sửa đổi hợp đồng thì trả theo cái mới hui
Variable consideration: discount, bonus...
Acting as an agent:
Revenue of agent = commission
Revenue of principal = Gross amount of the consideration
Expense Recognition
Principles
Matching concept: COGS
Expensing as incurred (period cost): SG&A
Capitalization: vốn hóa, chi phí lắp đặt tính vào asset luôn á
Issues
Doubtful accounts: dự phòng nợ khó đòi
Warranties: chi phí bảo hành sp, chi phí update
Choices of methods: kiểu khấu hao, và cách ghi nhận inventory
2 catergories
Expenses: from ordinary business activities
Loss: from secondary or peripheral activities
Inventory & Depreciation/Amortization
Inventory
Depreciation (Tangible assets)
Amortization (Intangible assets)
Straight - line depreciation method
Accelerated depreciation method
Double-declining depreciation method
Non-recurring items
Categories
Discontinued
Unusual or infrequent items
Changes in accounting policies
Change in acc principle
:
Retrospective
application, prior statements must be restated
Change in acc estimates
:
Prospective
applicaton, prior statements are not restated
Correction of an error for a prior period
: Restating the FS (for the prior periods presented in the current FS)
Non-operating items
Special cases and acc treament
Loss on disposal of fixed rate
Recorded as an
unusual or infrequent
item, but still part of
operating activities
Interest expense:
For
non-financial service
company: non-operating
For
financial service
company: operating
Restructuring charges:
GAAP: is recorded as operating items
ko phải từ hđkd chính
được ghi nhận như bth nhưng mà ở IS và CF statement thì nó phải được tách riêng 1 mục cụ thể ra
Earning per share
Categories
Simple structure (common stock only)
Report only
basic EPS
Complex structure (có embedded - kiểu convert)
Report both
basic & diluted EPS
If
diluted EPS > basic EPS
thì
diluted EPS = basic EPS
Measurement
Basic EPS
WANOS - Weighted average number of common
New issued
Reacquistion
Stock split or pay dividend
Diluted EPS
Convertible preferred stock
Convertible debt outstanding
Stock option, warrants
Anti-dilutive securities
Common size IS and IS ratios
Common-size IS
each line on the IS as a percentage of REVENUE: chuyển về dạng phần trăm của doanh thu
IS ratios
Gross profit margin = Gross profit / Revenue
Net profit margin = Net income / Revenue
Comprehensive income
is the change in equity due to non-owners sources
Under IFRS, thì ko ghi nhận vào IS
Comprehensive income = Net income + other comprehensive income (OCI)
OCI including:
Foreign currency translation adjustments
Unrealized gains/ losses on derivatives contracts
Unrealized holding gains/ losses
Certain costs of a firm's defined benefit pos-retirement plans that are not recognized in the current period