LEARNING OUTCOMES

The candidate should be able to:

1. describe the components of the income statement and alternative presentation formats of that statement;

2. describe general principles of revenue recognition and accrual accounting, specific revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, gross and net reporting of revenue), and implications of revenue recognition principles for financial analysis;

3. calculate revenue given information that might influence the choice of revenue recognition method;

4. describe key aspects of the converged accounting standards issued by the International Accounting Standards Board and Financial Accounting Standards Board in May 2014;

5. describe general principles of expense recognition, specific expense recognition applications, and implications of expense recognition choices for financial analysis;

6. describe the financial reporting treatment and analysis of non-recurring items (including discontinued operations, extraordinary items, unusual or infrequent items) and changes in accounting policies;

7. distinguish between the operating and non-operating components of the income statement;

8. describe how earnings per share is calculated and calculate and interpret a company’s earnings per share (both basic and diluted earnings per share) for both simple and complex capital structures;

9. distinguish between dilutive and antidilutive securities and describe the implications of each for the earnings per share calculation;

10. convert income statements to common-size income statements;

11. evaluate a company’s financial performance using common-size income statements and financial ratios based on the income statement;

12. describe, calculate, and interpret comprehensive income;

13. describe other comprehensive income and identify major types of items included in it.