FSA

Securities classified as fair value through OCI

only realized gains and losses are reported on the income statement

Securities classified as fair value through profit or loss

realized and unrealized gains and losses are reported on the income statement

Merger

C_o A + C_o B = C_o A

Acquistion

C_o A + C_o B = ( C_o A + C_o B)

Consolidation

C_o A + C_o B = C_o C

A and B cease to exists and a new entity is created

Minority Interest (Partial Goodwill)

(1 - %Acquisition) (Fair Value of Net Identifiable Assets)

Minority Interest (Full Goodwill) *USGAAP

(1 - %Acquisition) (Fair Value)

Full goodwill (USGAAP)

fair value of company T – Book value of company T

Book value of company T

common stock + retained earnings

Tax deduction for stock grant

share price on settlement date x number of shares vested

tax windfall

Tax Implication when Price_grant < Price_settlement

Fair value of plan assets at the end of the year

Fair value of plan assets at the beginning of the year

+ Actual return on assets

+ Employer contributions

− Benefits paid

funded status

Fair Value of Plan Assets − PBO

Ending Retained Earnings

Beginning Retained Earnings + Net Income - Dividends

cumulative price increases (hyperinflation)

(1 + Inflation Rate )^t − 1

COGS

Beginning Inventory + Purchases - Ending Inventory

Minority Interest (Full Goodwill) USGAAP & IFRS

Fair Value of Subsidiary × Minority Interest Percentage

Minority Interest (Partial Goodwill) only IFRS

Fair Value of Identifiable Net Assets × Minority Interest Percentage

IFRS Impairment Amount

Carrying Amount of unit > Recoverable Amount

USGAAP Impairment Amount

If True

Carrying Amount of unit > Fair Value Amount

Carrying value of Goodwill − Implied Value of Goodwill

CAMELS

capital adequacy, asset quality, management, earnings, liquidity, and sensitivity.

Combined Ratio

total insurance expenses ÷ net premiums earned

Soft Market

Combined Ratio is high

Liquidity Coverage Ratio

High Quality Liquid Assets ÷ Net Outflows

Decrease/decline mean the ratio is worsened

Number of days of stress

30 × Liquidity Coverage Ratio

Net Stable Funding Ratio

Available Stable Funding ÷ Required Stable Funding

Segment Growth

( CapEx % ) / ( Assets %)

Value greater than 1 indicates segment is growing

Aggregate Accruals^CF

NI − CFO − CFI

Accruals ratio^CF

(NI − CFO − CFI) / ((NOA^end+NOA^beg) /2 )

Aggregate Accruals^BS

(NOA^end−NOA^beg)

Accruals ratio^BS

(NOA^end−NOA^beg) / ((NOA^end+NOA^beg) /2 )

NOA (Net Operating Assets)

Operating Assets - Operating Liabilities

Operating Assets

Total Assets - (Cash + Cash Equivalents + Marketable Securities)

Operating Liabilities

Total Liabilities - (Notes Payable + Long-term Debt)

Proper analysis framework

1. Define the purpose of the analysis.

2. Collect input data.

3. Process input data.

4. Interpret processed data.

5. Develop and communicate conclusions.

6. Follow up.

Tax burden

NI/EBT

or

1 - the effective tax rate

Estimated Cash Flows (segmental CF not reported)

EBIT + depreciation + amortization.

unrealized gains or losses from a debt investment classified as FVOCI

recognized in other comprehensive income

Share Based Compensation

↓ Retained Earnings but ↑ Compensation Reserve

no Change in Equity

Stock Option Compensation

↑ Common Stock (Equity) If employee exercise the option

Tax Shortfall

Tax Implication when Price_grant > Price_settlement

Ending PBO

Beginning PBO + Current Service Cost + Interest Costs ± Actuarial Gains/Losses + Past Service Cost − Benefits Paid

Interest Costs = PBO_beg × Discount Rate

Ending Fair Value of Assets

Beginning Fair Value of Assets + Current Contributions + Actual Returns − Benefits Paid