CFA LEVEL 1 WITH CORRECT 180+ QUESTIONS WITH CORRECTRY ANALYZED ANSWERS (ACTUAL EXAM) ALREADY GRADED A+ LATEST 2024 Revaluation Model - ANSWERS -- IFRS allows, however, does not specify if the expense should be recorded as a loss on revaluation, or as part of depreciation expense - results in fair value being used for the carrying value rather than cost less accumulated depreciation under US GAAP - may not result in an annual depreciation amount and could result in an increase to net earnings, or an increase to OCI, as a result of fair value adjustments - will also DECREASE earnings if the fair value of the long -lived asset decreases upon subsequent revaluation - however, unlike the cost model, it could also increase earnings to the extent of a previous decrease Scope of Financial Statement Analysis - ANSWERS -- analysis is based on financial statements is performed by equity investors interested in valuation, lenders interested in liquidity, suppliers interested in future business, and analysts working to recommend security purchases, mergers, credit and lending, debt ratings, and forecasting Balance Sheet - Assets - ANSWERS -- assets are items owne d by a company that will benefit the company in the future - found on balance sheet; include current/noncurrent - required to be listed separately under IFRS - typically shown on balance sheet at historical cost Income Statement - Introduction - ANSWER S-- reports revenues, expenses, and profit or loss for a company on a consolidated basis over a short period of time - revenues are matched with expenses incurred to earn the revenue, and the net result is a profit or a loss for the period - when the com pany reports on a consolidated basis, they include all companies they own in one income statement Financial Statement Analysis Framework - ANSWERS -provides an overview of the methodology used by analysts to consistently analyze financial statements 1. articulate the purpose and context of analysis 2. collecting data 3. process the data 4. analyzing and interpreting the processed data 5. develop/communicate conclusions and recommendations 6. follow up Statement of Changes in Equity (1) - ANSWERS -- reconciles the balance in equity from the beginning of a period to the end of a period - equity is composed o f paid -in capital, retained earnings, other comprehensive income, and minority interests - statement of changes in equity reconciles the beginning equity balance with the period -ending equity balance by analyzing the changes in the four components of equi ty Beginning equity +/ - increase/decrease in paid -in capital + net income (or minus net loss) - dividends paid +/ - changes in other comprehensive income +/ - changes in minority interest Balance Sheet - Liabilities - ANSWERS -- future obligations of a company, which may be monetary or non -monetary - include current/non -current liabilities - required to be listed separately under IFRS as a means of helping analysts in identifying threats t o liquidity Financial Notes (footnotes) and Supplementary Schedules - ANSWERS -- required part of the financial reports and contain essential information about the company's accounting policies, methods, and estimates, many of which are essential for analy sis Statement of Comprehensive Income - ANSWERS -- requirement under IFRS - comprised of both profit and loss for the period and other items affecting equity - presented as one or two statements, with one being the income statement
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