Dividend Revenue Income Statement
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Technical Line: How the New Revenue Standard Affects Asset Managers
No. 2017-20 Updated 10 July 2020 Technical Line FASB — final guidance How the new revenue standard affects asset managers In this issue: Overview ....................................... 1 What you need to know Background ................................... 2 Investment management • Asset managers need to make a number of judgments on when and how to recognize arrangements ............................. 3 performance-based fees for their investment management services. This may result Identifying the contract with a in entities recognizing revenue differently than they have in the past. customer ................................. 3 Combining contracts .................... 4 • Certain expenses incurred by the asset manager that are reimbursed by funds or Identifying the performance investors may be required to be presented gross on the income statement (i.e., in obligations ............................... 5 revenue and expense) based on the asset manager’s performance obligations and Determining the transaction price 7 principal versus agent evaluation. Allocating the transaction price to the performance obligations • Asset managers may be required to capitalize certain contract costs (e.g., placement in the contract .......................... 9 Recognizing revenue when fees, implementation costs), amortize these assets and analyze them for impairment. (or as) the entity satisfies a This is a change in practice for entities that have not previously capitalized these costs. performance obligation ............ 9 Carried interest ......................... 10 Contract costs ............................. 11 Overview Costs to obtain and fulfill a The new revenue recognition standard issued1 by the Financial Accounting Standards Board contract ................................. 11 Additional considerations for (FASB or Board) requires entities in the asset management industry to make additional mutual fund asset managers ..... 12 judgments and estimates, such as when and how to recognize performance-based fees for Distribution services ................. -
On the Balance Sheet-Based Model of Financial Reporting
On the Balance Sheet-Based Model of Financial Reporting Occasional Paper Series Center for Excellence in Accounting & Security Analysis Columbia Business School established the Center for Excellence in Accounting and Security Analysis in 2003 under the direction of Trevor Harris and Professor Stephen Penman. The Center (“CEASA”) aims to be a leading voice for independent, practical solutions for financial reporting and security analysis, promoting financial reporting that reflects economic reality and encourages investment practices that communicate sound valuations. CEASA’s mission is to develop workable solutions to issues in financial reporting and accounting policy; produce a core set of principles for equity analysis; collect and synthesize best thinking and best practices; disseminate ideas to regulators, analysts, investors, accountants and management; and promote sound research on relevant issues. Drawing on the wisdom of leading experts in academia, industry and government, the Center produces sound research and identifies best practices on relevant issues. CEASA's guiding criterion is to serve the public interest by supporting the integrity of financial reporting and the efficiency of capital markets. Located in a leading university with a mandate for independent research, CEASA is positioned to lead a discussion of issues, with an emphasis on sound conceptual thinking and without obstacles of constituency positions. More information and access to current research is available on our website at http://www.gsb.columbia.edu/ceasa/ The Center is supported by our generous sponsors: General Electric, IBM and Morgan Stanley. We gratefully acknowledge the support of these organizations that recognize the need for this center. ON THE BALANCE SHEET-BASED MODEL OF FINANCIAL REPORTING Principal Consultant Ilia D. -
An Introduction to Basic Farm Financial Statements: Balance Sheet
W 884 An Introduction to Basic Farm Financial Statements: Balance Sheet Victoria Campbell, Extension Intern S. Aaron Smith, Associate Professor Christopher N. Boyer, Associate Professor Andrew P. Griffith, Associate Professor Department of Agricultural and Resource Economics The image part with relationship ID rId2 was not found in the file. Introduction Basic Accounting Overview To begin constructing a balance sheet, we Tennessee agriculture includes a diverse list need to first start with the standard of livestock, poultry, fruits and vegetables, accounting equation: row crop, nursery, forestry, ornamental, agri- Total Assets = Total Liabilities + Owner’s tourism, value added and other Equity nontraditional enterprises. These farms vary in size from less than a quarter of an acre to The balance sheet is designed with assets on thousands of acres, and the specific goal for the left-hand side and liabilities plus owner’s each farm can vary. For example, producers’ equity on the right-hand side. This format goals might include maximizing profits, allows both sides of the balance sheet to maintaining a way of life, enjoyment, equal each other. After all, a balance sheet transitioning the operation to the next must balance. generation, etc. Regardless of the farm size, enterprises and objectives, it is important to keep proper farm financial records to improve the long- term viability of the farm. Accurate recordkeeping and organized financial statements allow producers to measure key financial components of their business such A change in liquidity, solvency and equity can as profitability, liquidity and solvency. These be found by comparing balance sheets from measurements are vital to making two different time periods. -
Illustrative IFRS Financial Statements 2019 – Investment Funds
Illustrative IFRS financial statements 2019 Investment funds Stay informed. Visit inform.pw c.com Illustrative IFRS financial statements 2019 – Investment funds Illustrative IFRS financial statements 2019 – Investment funds This publication provides an illustrative set of financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional open-ended investment fund (‘ABC Fund’ or the ‘Fund’). ABC Fund is an existing preparer of IFRS financial statements; IFRS 1, ‘First-time adoption of IFRS’, is not applicable. It does not have any subsidiaries, associates or joint ventures. The Fund’s shares are not traded in a public market. Guidance on financial statements for first-time adopters of IFRS is available at www.pwc.com/ifrs. This publication is based on the requirements of IFRS standards and interpretations for the financial year beginning on 1 January 2019. There are no standards effective for the first time in 2019 that required changes to the disclosures or accounting policies in this publication. However, readers should consider whether any of the standards that are mandatory for the first time for financial years beginning 1 January 2019 could affect their own accounting policies. Appendix XII contains a full list of these standards (including those that have only a disclosure impact) as well as a summary of their key requirements. In compiling the illustrative disclosures, we have updated the guidance included in Appendix VIII to address IFRIC 23 ‘Uncertainty over income tax treatments’ which is applicable for financial years beginning on or after 1 January 2019. Commentary boxes are included throughout the publication to provide additional information where necessary. -
Cash Flow Statement Introduction Introd. Contd
Cash Flow Statement Chapter 4 Introduction Management and other interested external parties have always recognized the need for a cash flow statement but it was never required until the FASB (Financial Accounting Standards Board) issued Statement # 95 “Statement of Cash Flows” in 1988. This statement required that: - businesses include a statement of cash flow as part of their financial reporting. Introd. Contd. Under GAAP, most businesses use accrual basis of accounting. This method requires that revenue is recorded when earned and expenses recorded when incurred. Now, revenue may include credit sales that have yet to be collected in cash and expenses that have yet to be paid. Thus under accrual accounting net income will generally not equal net cash flow from operations. 1 Need for the CF statement? Fact is, not all revenue that is earned is received in cash or received immediately, and not all expenses incurred is paid. So a cash flow statement reconciles the accrual income statement to net cash collected or paid. Cash is critical to any hospitality business. A hotel or restaurant’s success or failure will be determined by, among other things, how the flow of cash is utilized by management. Purpose of Cash Flow statement • To use information about the past sources of cash to predict the hotel or restaurant’s ability to generate positive cash flows in the future. • To establish the hotel or restaurant’s ability to pay its bills – ability to meet its obligations. Purpose – contd. • To ascertain whether the business’ cash is coming from operations mostly or from other sources instead. -
Consolidated Financial Statements 2019
CONSOLIDATED FINANCIAL STATEMENTS 2019 Contents Consolidated Financial Statements The Board of Directors' and CEO's Report 1 14 Property, plant and equipment 41 Independent Auditor's report 7 15 Right of use assets 43 Consolidated Statement of Income 11 16 Goodwill 44 Consolidated Statement of Comprehensive Income 12 17 Intangible assets 46 Consolidated Statement of Financial Position 13 18 Investments in associates 47 Consolidated Statement of Changes in Equity 14 19 Trade receivables, other receivables and Consolidated Statement of Cash Flows 15 prepayments 48 Notes to the Consolidated Financial Statements 16 20 Deferred income tax 49 1 General information 16 21 Inventories 51 2 Summary of significant accounting policies 17 22 Equity 52 3 Critical accounting estimates and 23 Borrowings and lease liabilities 56 assumptions 31 24 Provisions 61 4 Business combinations 32 25 Post-employment benefits 62 5 Non-IFRS measurement 34 26 Financial instruments and risks 62 6 Segment information 35 27 Trade and other payables 68 7 Revenues 37 28 Contingencies 69 8 Expenses by nature 38 29 Related party transactions and information on 9 Net finance costs 38 remuneration 70 10 Staff costs 38 30 Subsequent events 71 11 Fees to Auditors 39 31 Subsidiaries 72 12 Income tax 39 32 Quarterly results (unaudited) 73 13 Earnings per share 40 33 Definitions and abbreviations 75 The Board of Directors' and CEO's Report Marel is a leading global provider of advanced utilization levels the interest and finance cost is processing equipment, systems, software and expected to decrease as the new facility includes services to the poultry, meat and fish industries with more favorable terms. -
Earnings Per Share. the Two-Class Method Is an Earnings Allocation
Earnings Per Share. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities, according to dividends declared and participation rights in undistributed earnings. Under this method, net earnings is reduced by the amount of dividends declared in the current period for common shareholders and participating security holders. The remaining earnings or “undistributed earnings” are allocated between common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. Once calculated, the earnings per common share is computed by dividing the net (loss) earnings attributable to common shareholders by the weighted average number of common shares outstanding during each year presented. Diluted (loss) earnings attributable to common shareholders per common share has been computed by dividing the net (loss) earnings attributable to common shareholders by the weighted average number of common shares outstanding plus the dilutive effect of options and restricted shares outstanding during the applicable periods computed using the treasury method. In cases where the Company has a net loss, no dilutive effect is shown as options and restricted stock become anti-dilutive. Fair Value of Financial Instruments. Disclosure of fair values is required for most on- and off-balance sheet financial instruments for which it is practicable to estimate that value. This disclosure requirement excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value, employee benefit obligations, lease contracts, and all nonfinancial instruments, such as land, buildings, and equipment. -
MASB 9 Revenue
MASB 9 Revenue MASB 9 Revenue prescribes the accounting treatment of revenue arising from certain types of transactions and events. MASB 9 supersedes MASB Approved Accounting Standard IAS 18, Revenue Recognition adopted previously by the MASB. Highlights: 1. MASB 9 should be applied in accounting for revenue arising from the sale of goods, rendering of services and the use by others of enterprise assets yielding interest, royalties and dividends. It also specifically excludes revenue arising from certain transactions. 2. Exempt enterprises need not comply with certain provisions of this Standard i.e. the recognition of revenue by reference to the stage of completion in rendering services. 3. MASB 9 requires that revenue should be measured at the fair value of consideration received or receivable. In most cases, the consideration is in the form of cash or cash equivalents. Discounting is needed in those circumstances where the inflow of cash is significantly deferred without interest. If dissimilar goods or services are exchanged (as in barter transactions), revenue is the fair value of the goods or services received adjusted by the any cash or cash equivalent transferred or, if this is not reliably measurable, the fair value of the goods or services given up adjusted by the any cash or cash equivalent transferred. 4. Revenue should be recognised when all the following have been satisfied: (a) the significant risks and rewards of ownership are transferred to the buyer; (b) managerial involvement and control have passed to the buyer; (c) the amount of revenue can be measured reliably; (d) it is probable that economic benefits will flow to the enterprise; and (e) the costs incurred or to be incurred can be measured reliably. -
Reading and Understanding Nonprofit Financial Statements
Reading and Understanding Nonprofit Financial Statements What does it mean to be a nonprofit? • A nonprofit is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. • The mission of the organization is the main goal, however profits are key to the growth and longevity of the organization. Your Role in Financial Oversight • Ensure that resources are used to accomplish the mission • Ensure financial health and that contributions are used in accordance with donor intent • Review financial statements • Compare financial statements to budget • Engage independent auditors Cash Basis vs. Accrual Basis • Cash Basis ▫ Revenues and expenses are not recognized until money is exchanged. • Accrual Basis ▫ Revenues and expenses are recognized when an obligation is made. Unaudited vs. Audited • Unaudited ▫ Usually Cash Basis ▫ Prepared internally or through a bookkeeper/accountant ▫ Prepared more frequently (Quarterly or Monthly) • Audited ▫ Accrual Basis ▫ Prepared by a CPA ▫ Prepared yearly ▫ Have an Auditor’s Opinion Financial Statements • Statement of Activities = Income Statement = Profit (Loss) ▫ Measures the revenues against the expenses ▫ Revenues – Expenses = Change in Net Assets = Profit (Loss) • Statement of Financial Position = Balance Sheet ▫ Measures the assets against the liabilities and net assets ▫ Assets = Liabilities + Net Assets • Statement of Cash Flows ▫ Measures the changes in cash Statement of Activities (Unaudited Cash Basis) • Revenues ▫ Service revenues ▫ Contributions -
Ten Years of XBRL: Financial-Reporting Experts Reflect on Benefits, Successes, and Remaining Challenges (Part 1)
JUNE & JULY 2019 IN THIS ISSUE Ten years of XBRL: Financial- SEC staff comments are RECENT DEVELOPMENTS reporting experts reflect on revealing, a year after The SEC’s FAST Act rules benefits, successes, and ASC 606 broaden XBRL requirements remaining challenges PAGE 2 PAGE 8 PAGE 10 Ten years of XBRL: Financial-reporting experts reflect on benefits, successes, and remaining challenges (Part 1) Believe it or not, a decade has elapsed since June 2009, when the SEC implemented its XBRL-tagging requirement for financial disclosure filings. Three years later, the XBRL mandate was fully phased in for all SEC filers, and it continues to expand. All regulatory compliance teams at SEC reporting companies are now involved in XBRL tagging. SEC rules that took effect in May 2019 now require Inline XBRL for information on the cover of Forms 8-K, 10-Q, 10-K, 20-F, and 40-F. [See The SEC’s FAST Act rules broaden XBRL requirements in this issue.] To mark the anniversary, DIMENSIONS asked six XBRL experts in the securities regulation, financial reporting, or capital markets sectors to comment on the structured-data revolution in SEC reporting: its benefits to investors and companies; the success stories thus far; and the challenges that remain for structured data and the general modernization of disclosure. • Mike Willis, Assistant Director, SEC Office of Structured Disclosure • J. Louis Matherne, Chief of Taxonomy Development, FASB • Campbell Pryde, President and CEO, XBRL US • Christine Tan, Co-Founder and Chief Research Officer, idaciti • Pranav Ghai, CEO, Calcbench • Lou Rohman, Vice President of XBRL Services, Toppan Merrill NOTE: The views expressed here are solely those of the individual respondents, and they do not necessarily reflect the views of their respective organizations. -
Example of Internally-Prepared Financial Statements
EXAMPLE OF INTERNALLY-PREPARED FINANCIAL STATEMENTS Balance Sheet (also called a Statement of Financial Position) summarizes the assets, liabilities and net assets of the organization at a specified date. It is a snapshot of the organization’s financial position on that date. Statement of Income and Expenses (also called a Statement of Operations) reports the organization’s financial activity over the year. It shows income minus expenses, which results in either a profit or a loss. ABC Company Balance Sheet As of March 31, 2015 2015 2014 ASSETS Current Assets: Cash 5,000 5,200 Account Receivable 4,000 3,200 Inventory 3,000 5,000 Prepaid Expenses 3,850 - Capital Assets (equipment) 13,000 14,000 TOTAL ASSETS 28,850 27,400 LIABILITIES Current Liabilities: • Accounts Payable and Accrued Liabilities 9,500 9,200 • Other Current Liabilities 3,500 500 • Current portion of Deferred Capital Contributions 1,000 1,000 Deferred Capital Contributions 9,000 10,000 TOTAL LIABILITIES 23,000 20,700 Net Assets Internally restricted 6,000 6,000 Externally restricted 4,000 4,000 Unrestricted (4,150) (3,300) $5,850 6,700 Total Liabilities and Net Assets $28,850 27,400 ABC Company Statement of Income and Expenses For the year ending March 31, 2015 2015 2014 REVENUE Registration fees 10,000 13,800 Grant – City of YZ 12,800 5,000 Donations and Sponsorships 5,000 4,800 Fundraising 3,500 2,410 Equipment 2,300 1,000 TOTAL REVENUE 33,600 27,010 EXPENSES Program costs 11,200 10,000 Advertising and promotion 8,400 9 ,000 Professional fees 8,500 6,000 Fundraising 2,300 1, 01 0 Insurance 1,800 2,000 Office/administration - TOTAL EXPENSES 34,450 28,010 Excess (deficit) of revenue over (850) (1,000) expenses for the year Net assets, beginning of year 6,700 7 ,700 Excess (deficit) of revenue over (850) (1,000) expenses for the year Net assets, end of year 5,850 6 ,700 ANOTHER EXAMPLE OF INTERNALLY-PREPARED FINANICAL STATEMENTS Balance Sheet (also called a Statement of Financial Position) summarizes the assets, liabilities and net assets of the organization at a specified date. -
Part 3 Cash Flow Statement
Part 3 Cash Flow Statement Slide # 1 Cash Flow Statement The Cash Flow Statement is the second statement you will complete, since it draws information from the Income Statement and provides information for the Balance Sheet. The ChCash Flow Sta temen t summarizes the cash actlltually entitering and lileaving the company over a period of time. Slide # 2 Cash Flow Statement How is Cash different from Net Income? All companies have at least one non‐cash expense, which is depreciation. For companies that allow accounts receivable, revenues may be recorded without a cash inflow. Likewise with accounts payable, expenses can be deducted from Net Income without a cash outflow. Additionally, Net Income reflects activity for a period of time but does not indicate how much cash was available at the start of the period. Therefore, Net Income is not the same as Cash. Example: Cash Adjustment for Depreciation If you’re working on a cash‐basis, how much of a difference could there really be between Net Income and cash? Consider this example. A newspaper company spends $250,000 in cash on a new printing press. Using a 10‐year depreciation schedule, the only expense subtracted from Net Income for the year is $25,000 in depreciation. However, cash reserves have been reduced by the full $250,000 cost. If you looked only at Net Income, you might think the company’ s cash balance is $225,000 higher than it really is. Slide # 3 Cash Flow Statement Why do you care about the cash balance? Companies only continue operating only while there is cash to pay suppliers and employees.