The most comprehensive educational resources for finance

Calculation of EBITDA Under IFRS

EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortization. It’s a popular measure and is commonly used in various financial ratios to compare different companies. EBITDA provides a measure of the operating performance of a business. The general formula for calculating EBITDA is as follows: EBITDA = Revenue − Expenses (excluding tax and interest,

Accrual Accounting Concept in IFRS and GAAP

In accounting, there are two main methods of recording the income and expenses in the books of accounts. They are: cash basis and accrual basis. In the cash method, the income or revenue is recorded when the cash is received, and the expenses are recorded when the cash is paid. This is the simplest way

Going Concern IFRS Vs. GAAP

The Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB) are the two main accounting bodies that publish accounting guidelines. FASB publishes the Generally Accepted Accounting Principles (GAAP), and IASB publishes the International Financial Reporting Standards (IFRS). Both FASB and IASB have been working together to eliminate the differences between the two accounting

The Future of IFRS

In this paper, the Financial Reporting Faculty, provides its recommendations about the global set of accounting standards. In the paper, it urges the International Accounting Standards Board to “end the era of convergence,” and give all listed companies around the world the option of applying International Financial Reporting Standards. The paper is designed to raise

The Accounting Trick That Fooled Polly Peck’s Investors

Asil Nadir has been sentenced for his role in Polly Peck’s downfall. But the truth is investors should have bailed out long before his firm went bust. Tim Bennett explains. Asil went to jail for theft of company assets. However the amounts involved were small compared to the amount the company lost on unhedged forex

Financial Reporting – International Standards Convergence

This video by Arif Irfanullah discusses the international standards convergence in financial reporting, as a part of the CFA Level 1 syllabus. This video discusses: Differences between IFRS and US GAAP for Balance Sheet Items Income Statement Items Treatment of interest and dividends on cash flow statement Impact of standards on financial ratios

Red Flags and Accounting Warning Signs

This video by Arif Irfanullah discusses the quality of financial reporting and talks about the red flags and accounting warning signs, as a part of the CFA Level 1 syllabus. This video discusses Why Manage Earnings? Low Quality Earnings Fraud Triangle Risk Factors Incentives or Pressures (Motive) Opportunity Attitudes and Rationalizations Common Accounting Warning Signs

Financial Statement Analysis Applications

This video by Arif Irfanullah discusses the applications of financial statement analysis, as a part of the CFA Level 1 syllabus. This video discusses Evaluating Past Financial Performance Projecting Performance Forecasting Net Income Forecasting Net Income and Cash Flow Credit Assessment Credit Scoring Equity Investment Screening Analyst Adjustments

Accounting Shenanigans on the Cash Flow Statement

This video by Arif Irfanullah discusses the accounting Shenanigans on the Cash Flow Statement, as a part of the CFA Level 1 syllabus. This video analyses and describes the following ways to manipulate the cash flow statement: Stretching out payables Financing of payables Securitization of receivables Using stock

Accounting for Lessor and Pension

This video by Arif Irfanullah discusses the financial reporting aspects of lessor and pension which are a long-term liability, as a part of the CFA Level 1 syllabus. This video discusses: Reporting for Lessor Direct Financing Lease – Lessor Perspective Pension Evaluating Solvency