BOOK 3 — FINANCIAL REPORTIN AND ANALYSIS Readings and Learning Outcome Statements... Study Session 7 — Financial Reporting and Analysis: An Introduction Seady Session 8 ~ Financial Reporting and Analysis: The Income Statememt, Balance Sheet, and Cash Flow Statement. Study Session 9 ~ Financial Reporting and Analysis: Inventories, Long-Term Assets, Deferred Taxes, and On- and Off-Balance-Sheet Debt Study Session 10 — Financial Reporting and Analysis: Applications and International Standards Convergence . 288 Self-Test ~ Financial Reporting and Analysis... 329 Formulas... 337 Index... ou 342Page? LEVEL 1 BOOK 3: FINANCIAL REPORTING AND ANALYSIS (©2009 Kaplan, Inc. All rights reserved. Published in 2009 by Kaplan Schweser Printed in the United States of America, ISBN: 1-4277-9494-4 PPN: 4550-0107 TF this book docs nor have the balogram with the Kaplan Schwescr logo on the back cover, ie was distibuted without permission of Kaplan Schweser, a Division of Kaplan, Ine» and isin direct violation of global copyright laws, Your assistance in pursuing potential volarore of chis lw is greatly appreciated, ‘Required CFA Tnstirute™ disclaimer: "CFA® and Chartered Financial Analyst® ate wademarks owned by CFA Institute. CFA Insite (Formerly the Association for Investment Management and Reseatch) does not endorse, promote, xview, of watrant the accuracy ofthe products of Services offered by Kaplan Schweser.” Certain materials contained within cis text ae che copyrighted propercy of CFA Institute. The following is the copyright disclosure for these materials: "Copyright, 2010, CFA Institute, Reproduced and republished fom 2010 Learning Outcome Statements, Level I, 2, and 3 questions from CFA® Program ‘Materials, CRA Instcute Standards of Professional Conduct, and CFA Instiutes Global Investment erfaemance Standards with permission Irom CFA Insttuce, All RightsReserved.” “These materials may not be copied without written petmisson from the author. The unauthorized duplication ofthese noes isa vioksion of global copyright laws and che CFA Institute Code of Ethics. ‘Your auistance in pursuing potential violators of this law is greatly appreciated. Disclaimer: The SchyresesNotes should be used in conjunction with the original readings as sec forth by CFA Institute in hei? 2010 CFA Level 1 Study Guide. The information contained in these Notes covers ropics contained in the readings ceferenced by CFA Institute and is believed to be accurate. However, ther accuracy cannot be guaranteed nor is any warranty conveyed 2 0 yous ultimate exam success The Authors of the referenced feadings have not endorsed or sponsored these Notes, ©2009 Kaplan, Inc.READINGS AND LEARNING OUTCOME STATEMENTS READINGS The following material isa review of the Financial Reporting and Analysis principles designed t0 address the learning outcome statements set forth by CFA Institue. STUDY SESSION 7 Reading Assignments Financial Reporting and Analysis, CA Program Curriculurn, Volume 3 (CFA Instieute, 2010) 29, Financial Statement Analysis: An Introduction 30. Financial Reporting Mechanics 31. Financial Reporting Standards STUDY SESSION 8 Reading Assignments Financial Reporting and Analysis, CFA Program Curriculum, Volume 3 (CFA Institute, 2010) 32. Understanding the Income Statement 33. Understanding the Balance Sheet 34, Understanding the Cash Flow Statement 35. Financial Analysis Techniques STUDY SESSION 9 Reading Assignments Financial Reporting and Analysis, CFA Program Curticulura, Volume 3 (CFA Insticute, 2010) 36. Inventories 37. Long-Lived Assets 38. Income Taxes 39. Long-Term Liabilities and Leases STUDY SESSION 10 Reading Assignments Financial Reporting and Analysis, CFA Program Curriculum, Volume 3 (CFA Insticuce, 2010) page 11 page 20 page 34 page 47 page 84 page 102 page 132 page 173 page 198 page 229 page 255 40, Financial Reporting Quality: Red Flags and Accounting Warning Signs page 288 41, Accounting Shenanigans on the Cash Flow Statement 42. Financial Statement Analysis: Applications 43, International Scandards Convergence ©2009 Kaplan, Inc page 302 page 308 page 316