International Financial Statement Analysis, 4e Set

Learn to understand the financial statements of companies regardless of their country of origin The newly revised Fourth Edition of International Financial Statement Analysis delivers a thorough and up-to-date resource for anyone required to comprehensively assess company performance and financial position based on financial statements, regardless of country of origin. Part of the prestigious CFA Institute Investment Series, the seasoned professionals at the CFA Institute offer you a rich and clear reference covering every aspect of financial analysis, from financial reporting mechanics to understanding income and balance sheets. You'll learn about: The complete statement analysis process Information on income tax accounting and employee compensation The impact of foreign exchange rates on the statements of multinational corporations Perfect for chartered financial analysts required to analyze the financial statements of companies in multiple countries, International Financial Statement Analysis is also an invaluable resource for students in finance and business seeking a one-stop, authoritative reference on international financial statements.

International Financial Statement Analysis TOC: Preface xv Acknowledgments xvii About the CFA Institute Investment Series xix Chapter 1 Introduction to Financial Statement Analysis 1 Learning Outcomes 1 1. Introduction 1 2. Roles of Financial Reporting and Financial Statement Analysis 2 3. Primary Financial Statements and Other Information Sources 8 4. Financial Statement Analysis Framework 28 5. Summary 32 References 34 Practice Problems 34 Chapter 2 Financial Reporting Standards 37 Learning Outcomes 37 1. Introduction 37 2. The Objective of Financial Reporting 38 3. Standard-Setting Bodies and Regulatory Authorities 39 4. The International Financial Reporting Standards Framework 46 5. Comparison of IFRS with Alternative Reporting Systems 53 6. Monitoring Developments in Financial Reporting Standards 55 7. Summary 57 Practice Problems 58 Chapter 3 Understanding Income Statements 61 Learning Outcomes 61 1. Introduction 62 2. Components and Format of the Income Statement 62 3. Revenue Recognition 68 4. Expense Recognition 73 5. Non-Recurring Items and Non-Operating Items 84 6. Earnings per Share 90 7. Analysis of the Income Statement 99 8. Comprehensive Income 103 9. Summary 106 Practice Problems 108 Chapter 4 Understanding Balance Sheets 113 Learning Outcomes 113 1. Introduction 113 2. Components and Format of the Balance Sheet 114 3. Current Assets and Current Liabilities 118 4. Non-Current Assets 127 5. Non-Current Liabilities 139 6. Equity 141 7. Analysis of the Balance Sheet 145 8. Summary 156 Practice Problems 158 Chapter 5 Understanding Cash Flow Statements 163 Learning Outcomes 163 1. Introduction 163 2. Components and Format of the Cash Flow Statement 164 3. The Cash Flow Statement: Linkages and Preparation 177 4. Cash Flow Statement Analysis 192 5. Summary 205 Practice Problems 206 Chapter 6 Financial Analysis Techniques 213 Learning Outcomes 213 1. Introduction 213 2. The Financial Analysis Process 214 3. Analytical Tools and Techniques 218 4. Common Ratios Used in Financial Analysis 234 5. Equity Analysis 262 6. Credit Analysis 268 7. Business and Geographic Segments 270 8. Model Building and Forecasting 274 9. Summary 275 References 275 Practice Problems 276 Chapter 7 Inventories 283 Learning Outcomes 283 1. Introduction 283 2. Cost of Inventories 285 3. Inventory Valuation Methods 286 4. The LIFO Method 295 5. Inventory Method Changes 303 6. Inventory Adjustments 304 7. Evaluation of Inventory Management 311 8. Summary 323 Practice Problems 325 Chapter 8 Long-Lived Assets 339 Learning Outcomes 339 1. Introduction 340 2. Acquisition of Long-Lived Assets 340 3. Depreciation and Amortization of Long-Lived Assets 359 4. The Revaluation Model 369 5. Impairment of Assets 373 6. Derecognition 376 7. Presentation and Disclosures 379 8. Investment Property 389 9. Summary 393 Practice Problems 395 Chapter 9 Income Taxes 407 Learning Outcomes 407 1. Introduction 408 2. Differences between Accounting Profit and Taxable Income 408 3. Determining the Tax Base of Assets and Liabilities 413 4. Temporary and Permanent Differences Between Taxable and Accounting Profit 418 5. Unused Tax Losses and Tax Credits 423 6. Recognition and Measurement of Current and Deferred Tax 424 7. Presentation and Disclosure 428 8. Comparison of IFRS and US GAAP 433 9. Summary 436 Practice Problems 437 Chapter 10 Non-Current (Long-Term) Liabilities 443 Learning Outcomes 443 1. Introduction 443 2. Bonds Payable 444 3. Leases 464 4. Introduction to Pensions and Other Post- Employment Benefits 468 5. Evaluating Solvency: Leverage and Coverage Ratios 472 6. Summary 475 Practice Problems 477 Chapter 11 Financial Reporting Quality 483 Learning Outcomes 483 1. Introduction 484 2. Conceptual Overview 484 3. Context for Assessing Financial Reporting Quality 501 4. Detection of Financial Reporting Quality Issues 510 5. Summary 538 References 539 Practice Problems 540 Chapter 12 Applications of Financial Statement Analysis 545 Learning Outcomes 545 1. Introduction 545 2. Application: Evaluating Past Financial Performance 546 3. Application: Projecting Future Financial Performance 550 4. Application: Assessing Credit Risk 559 5. Application: Screening for Potential Equity Investments 561 6. Analyst Adjustments to Reported Financials 565 7. Summary 573 References 574 Practice Problems 574 Chapter 13 Intercorporate Investments 577 Learning Outcomes 577 1. Introduction 577 2. Basic Corporate Investment Categories 578 3. Investments in Financial Assets: IFRS 9 579 4. Investments in Associates and Joint Ventures 583 5. Business Combinations 595 6. Summary 614 Practice Problems 615 Chapter 14 Employee Compensation: Post-Employment and Share-Based 627 Learning Outcomes 627 1. Introduction 627 2. Pensions and Other Post-Employment Benefits 628 3. Share-Based Compensation 656 4. Summary 662 Reference 663 Practice Problems 663 Chapter 15 Multinational Operations 673 Learning Outcomes 673 1. Introduction 674 2. Foreign Currency Transactions 675 3. Translation of Foreign Currency Financial Statements 688 4. Multinational Operations and a Company’s Effective Tax Rate 727 5. Additional Disclosures on the Effects of Foreign Currency 730 6. Summary 734 Practice Problems 736 Chapter 16 Analysis of Financial Institutions 749 Learning Outcomes 749 1. Introduction 749 2. What Makes Financial Institutions Different? 750 3. Analyzing a Bank 756 4. Analyzing an Insurance Company 800 5. Summary 816 Practice Problems 817 Chapter 17 Evaluating Quality of Financial Reports 825 Learning Outcomes 825 1. Introduction 825 2. Quality of Financial Reports 827 3. Evaluating the Quality of Financial Reports 840 4. Earnings Quality 845 5. Cash Flow Quality 867 6. Balance Sheet Quality 876 7. Sources of Information about Risk 880 8. Summary 892 References 894 Practice Problems 896 Chapter 18 Integration of Financial Statement Analysis Techniques 901 Learning Outcomes 901 1. Introduction 901 2. Case Study: Long-Term Equity Investment 903 3. Summary 933 Practice Problems 933 Glossary 937 About the Editors 947 About the CFA Program 949 Index 951 International Financial Statement Analysis SOLUTIONS TOC: Part I Learning Objectives, Summary Overview, and Problems 1 Chapter 1 Introduction to Financial Statement Analysis 3 Learning Outcomes 3 Summary Overview 3 Problems 5 Chapter 2 Financial Reporting Standards 9 Learning Outcomes 9 Summary Overview 9 Problems 10 Chapter 3 Understanding Income Statements 13 Learning Outcomes 13 Summary Overview 14 Problems 15 Chapter 4 Understanding Balance Sheets 21 Learning Outcomes 21 Summary Overview 21 Problems 23 Chapter 5 Understanding Cash Flow Statements 29 Learning Outcomes 29 Summary Overview 29 Problems 30 Chapter 6 Financial Analysis Techniques 37 Learning Outcomes 37 Summary Overview 37 Problems 38 Chapter 7 Inventories 45 Learning Outcomes 45 Summary Overview 45 Problems 47 Chapter 8 Long-Lived Assets 63 Learning Outcomes 63 Summary Overview 64 Problems 65 Chapter 9 Income Taxes 77 Learning Outcomes 77 Summary Overview 77 Problems 78 Chapter 10 Non-Current (Long-Term) Liabilities 83 Learning Outcomes 83 Summary Overview 83 Problems 85 Chapter 11 Financial Reporting Quality 91 Learning Outcomes 91 Summary Overview 91 Problems 93 Chapter 12 Applications of Financial Statement Analysis 97 Learning Outcomes 97 Summary Overview 97 Problems 98 Chapter 13 Intercorporate Investments 101 Learning Outcomes 101 Summary Overview 101 Problems 102 Chapter 14 Employee Compensation: Post-Employment and Share-Based 113 Learning Outcomes 113 Summary Overview 113 Problems 115 Chapter 15 Multinational Operations 125 Learning Outcomes 125 Summary Overview 125 Problems 127 Chapter 16 Analysis of Financial Institutions 139 Learning Outcomes 139 Summary Overview 139 Problems 140 Chapter 17 Evaluating Quality of Financial Reports 149 Learning Outcomes 149 Summary Overview 149 Problems 151 Chapter 18 Integration of Financial Statement Analysis Techniques 157 Learning Outcomes 157 Summary Overview 157 Problems 158 Part II Solutions 161 Chapter 1 Introduction to Financial Statement Analysis 163 Solutions 163 Chapter 2 Financial Reporting Standards 165 Solutions 165 Chapter 3 Understanding Income Statements 167 Solutions 167 Chapter 4 Understanding Balance Sheets 171 Solutions 171 Chapter 5 Understanding Cash Flow Statements 175 Solutions 175 Chapter 6 Financial Analysis Techniques 179 Solutions 179 Chapter 7 Inventories 183 Solutions 183 Chapter 8 Long-Lived Assets 191 Solutions 191 Chapter 9 Income Taxes 197 Solutions 197 Chapter 10 Non-Current (Long-Term) Liabilities 199 Solutions 199 Chapter 11 Financial Reporting Quality 207 Solutions 207 Chapter 12 Applications of Financial Statement Analysis 211 Solutions 211 Chapter 13 Intercorporate Investments 213 Solutions 213 Chapter 14 Employee Compensation: Post-Employment and Share-Based 219 Solutions 219 Chapter 15 Multinational Operations 225 Solutions 225 Chapter 16 Analysis of Financial Institutions 233 Solutions 233 Chapter 17 Evaluating Quality of Financial Reports 241 Solutions 241 Chapter 18 Integration of Financial Statement Analysis Techniques 245 Solutions 245 About the CFA Program 247