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Study Session 8
This study session examines financial reporting for specific categories of assets and liabilities. Inventories, long-lived assets, income taxes, and non-current liabilities are examined in greater detail because of their effect on financial statements and reported measures of profitability, liquidity, and solvency. For these items in particular, the analyst should be attentive to chosen accounting treatment, corresponding effect on reported performance, and the potential for financial statement manipulation.
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