reading 19 FSA
income statement
balance sheet
statement of cash flows
LOS 19a Describe the roles of financial reporting and financial statement analysis
Financial reporting 财务报表
The role of financial statement analysis收集公司资料，做决定
财务报表的目标是提供关于一个实体的财务状况、经营情况以及现金流量状况的变化，从而有助于广泛的使用者作出经济决策。
使用者：
外部：投资者investor（买未来！）/stock investor、债券投资者。供应商、政府收税
内部：股东、管理层、员工
information：
financial position(时间点）存量/performance（时间段）流量/changes in financial position of an entity
19b Describe the roles of the statement of financial position, comprehensive income, changes in equity, cash flows in evaluating a company's performance and financial position.
Balance sheet（资产负债表）又叫statement of financial position/ financial condition，反映财务状况：
-consist of 3 elements:
- Assets are the resources controlled by the firm
资产：经济实体掌握的资源
2.Liabilities 负债are amounts owed to lender and other creditors.
欠债主或其他债权人的数额
3.Owners' equity股东权益(shareholders' equity/ shareholders' funds/net assets)
是一个经济实体中资产减去负债后对剩余的净资产的权益。
A=L+E
所有者权益，是指小企业资产扣除负债后由所有者享有的剩余权益
Capital Structure资本结构
是指企业各种资本的价值构成及其比例关系
comprehensive income statement 综合收益表-all changes in equity except for shareholder transactions(eg.issuing stock, repurchasing stock, paying dividends)
综合收益包括：(1)在净收益中报告的收入、收益、费用以及损失；(2)不属于净收益但影响所有者权益的收益和损失
Income statement综合利润表 (又叫statement of operations /the profit and loss P&Lstatement)是企业在一定时期的经营业绩，解释了在两个资产负债表日之间一些资产（不是所有）资产、负债和所有者权益的变动（eg。发行股票，回购股票，支付红利）。利润表遵循应计原则和配比原则。
-financial performance of the firm over a period of time
net income 又叫做bottom line
income-expense=net income
income=(revenue主营业务收入+other income其他业务相关)收入+gain利得
Expense=expense from ordinary activities of business+other expense+loss损失（类似于gain)
净利润包括dividend红利，retained earnings留存收益
Base 法则：
期初+增-减=期末
（把两个时间点和一个时间段联系在一起）
其中包括revenues,expenses, gains and losses损益：指非日常经济业务所造成的资本或净资产的增加或减少
revenues--inflows从企业制造或销售产品、提供劳务、或其他构成企业持续经营的主营业务中获得的利益的流入
expense--outflows。。流出
other income
The statement of changes in equity权益变动表
其他都是权责发生制。只有现金流量表是收付实现制
The statement of cash flows现金流量表
反映经营、筹资活动的现金流入或流出。
--reports the company's cash receipts and payments--
现金流分类:
1）operating cash flow经营性现金流(cash effects of transactions)另外两者都不属于的部分/越多越好！经营性越长久
2）investing cash flows投资性现金流(acquisition or sale of property)
源于购置不动产、厂房、设备或子公司获机构部门购买、出售对其他公司的投资。
3）financing cash flows融资性现金流(issuance or retirement)：以发行股票、债券的现金收入减去偿还债务和支付股东股利等现金流
Relationship between financial statement
CFO
+CFI
+CFF
=change in cash balance!!!
-beginning cash
=ending cash
Statement of changes in equity股东权益变动表(不重要）
-present each component of equity's beginning balance, any changes during the period, and the ending balance.
T-account
19.2 Footnotes, audit and analysis
19c.Describe the importance of financial statement notes and supplementary info--accounting policies/methods /management's commentary
Financial statement notes(footnotes)--further details about info summarized in the financial statements.
--让使用者提高amount,timing, uncertainty 估计in financial statements
其中footnotes包括:
1.discuss the basis of presentation
2.accounting methods/assumptions
3.additional information such as business acquisitions or disposals收购/出售,legal actions,employee benefit plans,contingencies and commitments或有事件/或有承担,significant customers, sales to related parties and segments of the firm
Management's commentary管理层的讨论与分析(又叫management's report,operating and financial review and MD&A)年报里最有用的部分之一。
是从一个企业的角度，对财务业绩和公司状况的一个财务披露。
IFRS recommends--
1.nature of business
2.management's objectives
3.company's past performance/the performance measures used/ company's key relationships,resources and risks
注意：其中有部分可能是unaudited
For publicly held firms in US,
SEC requires
MD&A discuss
1.trends
2.significant events
- uncertainties that affect the firm's liquidity, capital resources and results of operations
MD&A必须讨论点
1.通货膨胀影响/物价（如原料）变动的重大信息
2.off-balance-sheet obligations and contractual obligations(eg.purchase commitments)资产负债表以外的义务和合同义务的影响，如：购买协议 - accounting policies需要管理者作出重大调整的会计政策
4.forward-looking expenditures and divestitures前瞻支出和资产剥离
基于已知趋势的经营业绩概览
19d.Describe the objective of audits of financial statements, the types of audit reports, the importance of effective internal controls.
Audit-independent review of an entity's financial statement
检查财务报表及相应的支持数据。目的是：使审计人员能够对财务报表的公平性和可靠性提出意见。
Public accountants-conduct audits/examine the financial reports and supporting records
Objective of audit-provide an opinion on the fairness and reliability of the FS.
Independent certified public accounting firm--employed byBoD执行董事会聘请，考查财务报表是否符合GAAP的要求。
--负责seeing the FS conform to applicable accounting standards
标准的审计报告包括：
Standard auditor's opinion
1.对auditor而言，perform independent review
2.follow普遍认同的审计标准，provide reasonable assurance-no material errors
3.当accounting methods没有一致时，report里必须额外说明
An unqualified opinion无保留的意见(又叫unmodified/clean opinion)--free from material omissions and errors.
-有any exceptions to 会计准则，--用qualified opinion
Adverse opinion--if not presented fairly or materially nonconforming with standards
Disclaimer of opinion--auditor unable to express an opinion
Modified opinion-any opinion other than unqualified
Going concern assumption--"uncertainties"--Also contain an explanatory paragraph -material loss is probable but amount无法估计
在GAAP准则下，审计人员必须声明对于公司内部控制的观点，内部控制是公司确保提供准确财务报表的程序。
Internal controls--company ensures 呈现的是准确的财报--publicly traded firm in US审计时必须包含IC--can provide opinion separately或者4th element of standard opinion（第四个组成部分）
所有审计必须包括Key Audit Matters(international)/Critical Audit Matter(US)。
-highlight accounting choices--这对使用者有重大意义.--这包括accounting choices--require management judgments and estimates/account for transactions/ auditor finds challenging or subjective choices
19e Identify and describe information sources that analysts use in FSA besides annual FS and supplementary info.
除了年度财务报表，分析员应该考察一个公司的季度或半年度报告。
Interim reports: update the major FS and footnotes,
中期报告能够代表性地更新主要的财务报表的附注，但不必须要审计
证券交易委员会的存档可以从EDGAR上面找到。
这些档案包括：
a.Form 8-K, company must report major assets的收购出售/changes in management or corporate governance
例如收购或主要资产的处置、管理层的变化、公司治理
b.Form 10-K/10-Q --公司的年报/季报
c.Proxy Statements代理投票报表--require a shareholder vote
当需要股东来投票时，向股东发布的报表。揭示了董事会人员的选举资格、报酬、管理资格和对股票期权的发放情况。
Corporate reports/ Press releases--written by management--viewed as 公关/卖点
不是所有材料都是独立于外部审计员的-eg公司官网没有被审计
Earnings guidance盈利预测,早于财报公布--conference call--senior mgt available to answer questions.
分析师也需要review pertinent有关的 information on 经济大环境/行业/公司对手信息--信息来源：trade journals/ reporting service/ government agencies
19f. Describe the steps in FSA framework
1.Objective and context，决定分析试图回答的问题，信息呈现形式、允许时间
2.Gather data与其他行业的经济形势的数据，向公司管理层、供应商、消费者提问
- Process the data对财报做调整，计算比率、图表
4.Analyze and interpret回答步骤一的问题 - Conclusions or recommendations准备报告并与直接使用者沟通
6.Update the analysis定期重复步骤、必要时修改
Reading 20 Financial reporting standards
20a Describe the objective of financing reporting and importance of standards in security analysis and valuation.
目标：firm current and potential利于investors/creditors make decisions
conceptual framework 用于development of accounting standards.
--标准需要一致性by narrowing the range of acceptable financial reports
--must flexible and discretion to describe the economics of firm
Financial reporting--important inputs for valuation purposes-not soles designed for this purpose
财报不仅用于估值，还提供很多用于估值的重要的变量。
20b. Describe the roles of financial reporting standard-setting bodies and regulatory authorities in establishing and enforcing reporting standards.
1)Standard-setting bodies --会计师审计师的专业组织--
eg:FASB/IASB-two primary standard-setting bodies:
(全称：Financial Accounting Standards Board -FASB
International Accounting Standards Board -IASB)
In US, the FASB sets forth GAAP.(全称：Generally accepted Accounting Principles)
Outside US, the IASB established IFRS.(全称:International Financial Reporting Standards)
会计准则制定机构是由专业的会计师和审计人员组成的确立会计准则的机构。
监管机构是用法律权利来确保财务报告准则实施的政府机构。
-财务会计准则委员会
-国际会计准则委员会
2)Regulatory authorities监管机构--eg. SEC美国的-FCA英国(当地政府发布）
--大部分national authorties belong to IOSCO(International Organization of Securities Commission)
members of IOSCO regulate more than 95% of world's financial markets.
*IOSCO 不是regulatory body, but its members work together to make national regulations and enforcement more uniform around the world.
-government agency-legal authority to enforce
SEC: Securities and Exchange Commission
FCA: Financial Conduct Authority
各国的监管机构都属于国际证券业协会，它的金融市场监管的三个目标是
1）保护投资者
2）确保市场的公平、效率和透明度
3）降低系统性风险
Securities and Exchange Commission required fillings
美国证监会要求的登记
Form S-1 新证券出售之前要登记
Form 10-K 每年必须的登记包括公司业务管理信息，经审计的财报和披露，对公司法律诉讼事务的披露。
10k中的信息披露和公司在年度报告中给股东的信息相似，但是公司年报不能替代10k；美国证监会对加拿大的要求是在10k里，对其他国外发行者的要求是在form 20-F
Form 10-Q 美国公司每个季度更新财报（与10k不能，这些不需要审计）和法律事务、会计证券的变动进行备案。非美国公司要求半年登记
Form DEF-14A proxy statement股东大会前或股东选举时。
Form 8-K 先写出涉及重大资产获得和处理，管理层和公司治理的变动，与会计师、财报和证券交易市场相关事务
Form 144 公司经过证监会注册向特定资格的投资者发行证券，但是必须向证监会报告
Form 3，4，5 公司管理层持有证券的情况，分析师可以通过这些，研究公司内部人员买卖证券的情况
欧盟的情况：
In EU, each member state has own securities regulations,但是所有欧盟国家要求report using IFRS.
a.European Securities Commision-advise the European Commission on securities regulation issues;
b.European securities and Market Authority(ESMA)欧洲证券和市场管理局 -coordinate relation within the EU.
20c. Describe the IASB's conceptual framework, including quantitative characteristics of financial reports, constraints on financial reports and required reporting elements.
财务报表的性质要求：
Quantitative characteristics
2 fundamental characteristics make financial information useful
--a。relevance相关性：财报中的数据会影响报告是使用者的经济决策或对过去的经济决策作出判断和验证
--b。faithful representation可靠性：信息反映了经济实体是无偏的，没有重大错误的，就是可靠的。
4 characteristics that enhance relevance and faithful representation:
以下四个要素加强了相关性和可靠性的标准
comparability / verifiability / timeliness/ understandability
可比性：反映经济实体在一定时期的持续经营状况的变化
可验证性：独立观察员可用相同的办法得到同样的结果
时效性：数据使用者作出即时决策
可理解性： 具有基本的商业和会计知识看懂财报信息，有用的财务信息不应复杂而被忽略。
Constraints and Assumptions
限制：1.避免错误，权衡信息的可靠性和相关性
2.成本cost-benefit tradeoff of enhancing characteristics.
3.使用者从这些信息所的好处应大于展示信息的成本
4.关于无形的和不确实的信息（声誉、商标、创新能力）都不能从财报上反映
Assumptions:
1.accrual accounting 应计原则：财报应该反映在时点上实际发生的交易，并不一定要有现金交收。
2.going concern持续性原则：公司会在可预见的未来持续经营。如果不是，公司财务状况的展示需要调整（如，存活和其他资产只能估计到清算价值）
20d. Describe general requirements for financial statements under IFRS.
国际会计准则一号，定义了哪些财务报告是必须的和应该如何准备这些财务报告。
1)required financial statements:
Balance sheet
statement of comprehensive income
cash flow statement
statement of changes in owners' equity
explanatory notes, including a summary of accounting policies
2)general features for preparing financial statements are stated in ISA No.1
fair presentation
going concern basis永续经营(eg. DCF正无穷）
accrual basis of accounting
（收钱和确认收入可能是两码事）
1）unearned revenue(deferred revenue)提前收到现金（eg订杂志）
2）prepaid expense（deferred expense)提前支付现金
3）unbilled revenue（accrued revenue)延迟收到现金
4）accrued expense延迟支付现金
应收、预付是资产ASSET
应付、预收是负债
consistency
materiality
aggregation
No offsetting of assets
report frequency
comparative information
3)Structure and content of financial statement
most entities should present a classified balance sheet
minimum information
comparative information
20e. Describe implications for financial analysis of alternative financial reporting systems and the importance of monitoring developments in financial reporting standards.
