Page 38 - FINAL CFA I SLIDES JUNE 2019 DAY 7
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Session Unit 7:
25. Understanding Balance Sheets
LOS 25.a: Describe the elements of the balance sheet: assets, liabilities, and equity. P.80
LOS 25.b: Describe uses and limitations of the balance sheet in financial analysis, p.81
• Market or intrinsic values!
• Intangible assets not included!
LOS 25.c: Describe alternative formats of balance sheet presentation., p.81
tanties
Classified balance sheet versus liquidity-based format
LOS 25.d: Distinguish between current and non-current assets and current and non-current liabilities, p.81
LOS 25.e: Describe different types of assets and liabilities and the measurement bases of each,. p82
Current Assets
• Cash and cash equivalents
• Marketable securities
• Accounts Receivables
• Inventories (measured via standard costing, retail method, FIFO and AWC permitted under
GAAP and IFRS
• LIFO permitted under US GAAP but not LIFO; reported at lower of cost and Net Realisable value)
• Others (e.g. prepared expenses; deferred tax assets)
