Income Statement- A lot of things hinge on a company’s profit. Profits determine bonuses, dividends to shareholders, t...
COURSE
Understanding Income Statements
This reading introduces the readers to income statements, one of the three major financial statements. We will learn about the structure and presentation of income statement, calculation of various elements of income statements, and common ratios associated with it.
- An income statement can be presented in a single-step format or multi-step format. In single-step f...
- Income statement is constructed using the principles of accrual accounting. Under accrual account, t...
- Long-term contracts are multi-year contracts such as construction project. For these contracts, the ...
- An instalment sale occurs when a firm finances the sale of a product and the payments are expected t...
- A barter transaction occurs when two firms exchange goods or services with each other without and ca...
- Expenses are decreases in economic resources, either by way of outflows or reductions of assets or i...
- Inventory refers to the short-term assets on a company’s balance sheet; example – a retail clothier’...
- A company’s long-lived assets refer to PPE, natural resources, and intangible assets. Since these as...
- Amortization refers to the periodic allocation of the cost of capital assets over the useful life of...
- A bad debt is a consequence of making a sale on credit. A warranty is a promise by a manufacturer or...
- ### Discontinued Operations Under both IFRS and US GAAP, a discontinued operation represents a comp...
- In the income statement of a company, a distinction is made between income and expenses from the ope...
- Earnings per share (EPS) is considered to be one of the best measures to summarize the performance o...
- **Stock dividends** are payment of additional shares of stock to common shareholders. For example, a...
- Companies with complex capital structures are required to present both basic and diluted earnings pe...
- We have the following data for a company: - Net income= $12,000 - Preferred dividend= $2,000 - ...
- We have the following data for a company: - Net income= $12,000 - Preferred dividend= $2,000 - ...
- In a common size income statement each item is expressed as a percentage of revenue. A common-size s...
- Two commonly used measures of profitability of a company include Gross Profit Margin and Net Profit ...
- Total Comprehensive Income reflects the changes in a company’s equity during the accounting period w...
LESSONS
Formats of Income Statements
Principles of Revenue Recognition
Revenue Recognition - Long-term Contracts
Revenue Recognition - Instalment Sales
Revenue Recognition - Barter Transactions
Expense Recognition
Inventory Expense Recognition
Depreciation Expense Recognition
Amortization Expense Recognition
Bad Debt Expense and Warranty Expense Recognition
Financial Reporting of Non-recurring Items
Operating and Non-operating Components of Income S...
How to Calculate Basic Earnings Per Share (EPS)
Impact of Stock Dividends and Stock Splits on Earn...
Diluted EPS
Calculation of Diluted EPS (Convertible Preferred ...
Calculation of Diluted EPS (Convertible Debt)
Common Size Income Statement
Performance Measures of a Company
Comprehensive Income
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