Connect financial statements and recognition rules to the way you plan, analyze and answer CMA Part 1A questions.
đź“š Reporting foundations and confidence: Strengthen your grasp of financial statements and recognition rules so CMA Part 1A questions feel concrete.
đź’¬ Better conversations and fewer gaps: Talk with controllers, auditors and managers about reporting choices that affect budgets, KPIs and forecasts.
🏛️ Cleaner decisions and governance: Use external financial statements as a stable base for planning, performance management and risk discussions.
FP&A analysts and junior controllers who use group financial statements in budgeting, forecasting and performance analysis.
Senior accountants preparing for CMA Part 1 and transitioning into planning, controlling or FP&A responsibilities.
Knowledge: Introductory financial accounting plus basic experience preparing or reviewing financial statements.
Tools: CMA approved calculator and a spreadsheet tool for practice exercises and reconciliations.
Analyze balance sheet, income and cash flow structures in exam style cases.
Assess recognition and measurement choices for assets, liabilities, equity and revenue.
Compare key reporting treatments under U.S. GAAP and IFRS for major topics.
Use external financial statements as inputs to planning and performance decisions.
Eligibility: currently not eligible
Watch time: about 3 hours
Total learning: about 4 hours
Estimated credits: 4.0
identify the users of these financial statements and their needs
demonstrate an understanding of the purposes and uses of each statement
identify the major components and classifications of each statement
identify the limitations of each financial statement
identify how various financial transactions affect the elements of each of the financial statements and determine the proper classification of a given transaction
demonstrate an understanding of the relationship among the financial statements
demonstrate an understanding of how a balance sheet, an income statement, a statement of changes in equity, and a statement of cash flows (indirect method) are prepared
define consolidated financial statements
define the two types of consolidation models: variable interest entity model and voting interest model
demonstrate an understanding of the three types of consolidation accounting: full consolidation, proportionate consolidation, and equity consolidation
demonstrate an understanding of intracompany balances and transactions that should be eliminated in consolidation
define integrated reporting, integrated thinking, and the integrated report, and demonstrate an understanding of the relationship among them
identify the primary purpose of integrated reporting
explain the fundamental concepts of value creation, the six capitals, and the value creation process
identify elements of an integrated report (i.e., organizational overview and external environment, governance, business model, risks and opportunities, strategy and resource allocation, performance, outlook, and basis of preparation and presentation)
identify and explain the benefits and challenges of adopting integrated reporting
identify issues related to the valuation of accounts receivable, including timing of recognition and estimation of the allowance for credit losses
distinguish between receivables sold (factoring) on a with-recourse basis and those sold on a without-recourse basis, and determine the effect on the balance sheet
identify issues in inventory valuation, including which goods to include, what costs to include, and which cost assumption to use
identify and compare cost flow assumptions used in accounting for inventories
demonstrate an understanding of the lower of cost or market rule for LIFO and the retail inventory method, and the lower of cost and net realizable value rule for all other inventory methods
calculate the effect on income and on assets of using different inventory methods
analyze the effects of inventory errors
identify advantages and disadvantages of the different inventory methods
recommend the inventory method and cost flow assumption that should be used for a company given a set of facts
demonstrate an understanding of the following debt security types: trading, available-for-sale, and held-to-maturity
demonstrate an understanding of the valuation of debt and equity securities
determine the effect on the financial statements of using different depreciation methods
recommend a depreciation method for a given set of data
demonstrate an understanding of the accounting for impairment of long-term assets and intangible assets, including goodwill
identify the classification issues of short-term debt expected to be refinanced
compare the effect on financial statements when using either the assurance warranty approach or the service warranty approach for accounting for warranties
demonstrate an understanding of interperiod tax allocation/deferred income taxes
distinguish between deferred tax liabilities and deferred tax assets
differentiate between temporary differences and permanent differences, and identify examples of each
distinguish between operating and finance leases
recognize the correct financial statement presentation of operating and finance leases
identify transactions that affect paid-in capital and those that affect retained earnings
determine the effect on shareholders' equity of large and small stock dividends, and stock splits
apply revenue recognition principles to various types of transactions
demonstrate an understanding of revenue recognition for contracts with customers using the steps required to recognize revenue
demonstrate an understanding of the matching principle with respect to revenues and expenses, and be able to apply it to a specific situation
define gains and losses, and indicate the proper financial statement presentation for gains and losses
demonstrate an understanding of the treatment of gain or loss on the disposal of fixed assets
demonstrate an understanding of expense recognition practices
define and calculate comprehensive income
identify the correct treatment of discontinued operations
Major differences in reported financial results when using GAAP vs. IFRS and the impact on analysis:
identify and describe the following differences between U.S. GAAP and IFRS: (i) expense recognition, with respect to share-based payments and employee benefits; (ii) intangible assets, with respect to development costs and revaluation; (iii) inventories, with respect to costing methods, valuation, and write-downs (e.g., LIFO); (iv) leases, with respect to lessee operating and finance leases; (v) long-lived assets, with respect to revaluation, depreciation, and capitalization of borrowing costs; and (vi) impairment of assets, with respect to determination, calculation, and reversal of loss