Pro Forma Income Statement 410

Corporate Finance PowerPoint presentation. In this presentation, we will discuss the pro forma income statement, get ready, it’s time to take your chance with corporate finance pro forma income statement. Let’s first take a step back and think about the pro forma financial statements in general, remembering the fact that we got to do them in some type of order in order to do them in a logical fashion. And that would mean that we would first need the sales projection information, the production plan, we can use those in order to create the pro forma income statement.

(more…)

Foreign Currency Transactions

Advanced financial accounting PowerPoint presentation. In this presentation, we will discuss foreign currency transactions get ready to account with advanced financial accounting, foreign currency transactions. So remember when we’re thinking about foreign currency transactions, we’re thinking about them from the perspective of the US company in US dollar. So we’re have our currency that we’re making our financial statements in, we’re measuring all the stuff on our financial statements with the measuring tool that we need to be using, that’s going to be the US dollar, that’s going to be our standardization. And then anytime we have foreign currency transactions with something other than US dollars, then we want to see them from that perspective, right? Because when we put them on our financial statements, just like anything else, just like inventory, if we were to value units of inventory, or to value stocks and whatnot, we need to value them in terms of our measure into a which of course is the US dollar.

(more…)

Forms of Business Combinations

This presentation we’re going to talk about forms of business combinations, which is basically external expansion, two types of entities that are going to be related in some way, shape or form, get ready to act because it’s time to account with advanced financial accounting, forms of business combinations. Now remember, we’re talking about expansion. Here, we’re thinking about expansion. We’ve got the two categories, we’ve got the internal expansion and external expansion. We’re considering here, the external expansion, we have an organization that now wants to expand and they’re going to be consolidated in some way or have two separate entities that will be combining. So now we’re talking about two separate legal entities typically separate legal entities that are now going to be combined in some way shape or forms. The forms of business combinations can be the statutory merger, the statutory consolidation, and the stock acquisition. So if you think about, in other words to separate legal entities and say, Alright, well how can these two separate legal entities be combined in some type of way, you can imagine some different Kind of scenarios in which that could take place. So and when you’re imagining those different types of scenarios, you’re going to be thinking about, okay, well, what’s going to be the key factor here, it’s going to be the controlling interest. So what’s going to be a situation where you had two separate legal entities, and now they’re they’re going to be have some controlling relationship, which could be that they’re combined together under one entity at some point or they are having a parent subsidiary type of relationship, in which case the control would be over the 50%. So that control concept is what you want to keep in mind here.

(more…)

Business Combinations Methods

In this presentation, we will take a look at business combination accounting methods, both historic methods and the current methods get ready to act, because it’s time to account with advanced financial accounting. We’re going to start off with business combinations from the past, these are not the current method that we’re going to be using. However, it’s good to have some historical context so that if you hear these methods, you know what you’re talking about. We also want to think about these concepts in terms of just a logistical standpoint. If you were to make these laws, then how would you do it? What are some of the challenges that have happened? And by looking through the historical process, you can kind of think about, okay, these are what were put in place, I see why those were put in place here that changes that are happening, we could see why the changes are happening, therefore have a better understanding of what we are doing, and how the current process is being put in place and why the decisions were made to put it in place. So in the past, we had combinations methods that included the purchase method and the pooling of interest. method. So they then what happened is the pooling of interest method was taken away by faz B. So faz B said, Hey, we’re not going to allow anymore, the pooling of interest method, and then the purchase method has been replaced with the acquisition method. So if you hear the purchase method, that in essence is what we’re currently doing. However, we changed the name from the purchase method to the acquisition method.

(more…)

Financial Reporting After a Business Combination

In this presentation, we will discuss financial reporting, after a business combination, get ready to account with advanced financial accounting, financial reporting, after a business combination, show the combined entity starting on the date of combination and going forward. So in other words, we probably when we’re imagining this type of scenario, we’re going to say, Okay, I see how this all works out here. And then we imagine this happening if we have a calendar year in a calendar, fiscal year, January through December, we say, Alright, the purchase happens, it will just apply it to January out through December. But obviously, that’s not always the case here. What happens when we have that interim kind of transaction where the purchase happened sometime in the middle of the of the fiscal year then that adds some bit of a complication. So you want to think about this in terms of a clean, you know, year, if it happened at the beginning of the fiscal year in combination, and then you know, what would happen if it did not happen at the beginning of the fiscal year, so if a combination of During a fiscal period, revenue earned by the acquire II before the combination is not reported in revenue for that combined enterprise. So you can see that can add a bit of complication with regards to that reporting

Acquisition Accounting Bargain Purchase

This presentation we’re going to continue on with our discussion of acquisition accounting, and this time focusing in on a bargain purchase, get ready to account with advanced financial accounting. First off, we can basically think of the bargain purchase as the opposite of goodwill. So in a prior presentation, we talked about the concept of goodwill within an acquisition, which would be resulting if the fair market value of the amount that was given like basically the purchasing price was greater than the fair market value of the net assets. So in other words, we take we look at the books of the company that’s being acquired, we’ve revalue their assets and liabilities to be on a fair market value, then assets minus liabilities, the equity section, the net assets now at a fair market value, we take a look at that. And if there’s a consideration that’s given that is greater than that amount, that then would result in goodwill. Now goodwill is quite common, because it’s unlikely even if you even if you re assess all the assets and liabilities to their fair value. Then you would typically think that the price would either be that that would be given the the amount that would be exchanged, the fair market value of the consideration would be the same as the assets minus the liabilities at fair market value, or more, because there’s some type of goodwill, that’s going to be that’s going to be in the organization. Now, you might be thinking, Well, what what if it was the opposite? What if you took the fair market value of the net assets, and the amount that was given the exchange amount was less than the fair market value? Now that could happen, but just note that that’s a lot more unusual.

(more…)