CFA Vol-3 Financial Statements

Lack of influence is generally presumed when the investor holds less than a xx equity interest,

20%

Significant influence is generally presumed between 20% and 50%

Significant influence

Asset booked with amortised cost

The financial assets are being held to collect contractual cash flows.

_{Yani sonunda satistan ek kar sagalamk olmamali oyle olan Fair value through other comprehensive income (FVOCI)}

Fair value through profit or loss (FVPL)

Örnek:  kısa vadede fiyat artışından kazanç sağlamak için bir hisse senedi alıyor.

Fair value through other comprehensive income (FVOCI)

Hold to collect assets: Örnek: Bir şirket, faiz geliri almak ve gerektiğinde satmak amacıyla devlet tahvili alıyor.

Merger: Company A + Company B

Company A

_{The distinctive feature of a merger is that only one of the entities remains in existence. One hundred percent of the target is absorbed into the acquiring company.}

Acquisition: Company A + Company B =

Company A + Company B

_{The distinctive feature of an acquisition is the legal continuity of the entities. Each entity continues operations but is connected through a parent–subsidiary relationship.}

Consolidation: Company A + Company B =

Company _C

_{The distinctive feature of a consolidation is that a new legal entity is formed and none of the predecessor entities remain in existence.}

Indemnification asset

Alıcı taraf (acquirer) bir yükümlülük (liability) kaydediyor (örneğin dava riski için).

Aynı anda, satıcının vereceği tazminat hakkı için bir varlık (asset) kaydediyor. Bu varlığa indemnification asset denir — çünkü alıcı gelecekte satıcıdan bir geri ödeme alma hakkına sahiptir.

Partial Goodwill (Kısmi Şerefiye)

Örnek:

• Şirket A, Şirket B’nin %80’ini 800.000 €’ya alıyor.
  
  

• Şirket B’nin net varlıklarının gerçeğe uygun değeri = 900.000 €.
  
  

• A’nın payına düşen = 900.000 × %80 = 720.000 €.
  
  

• Partial goodwill = 800.000 − 720.000 = 80.000 €.

Special purpose (SPEs) and variable interest entities (VIEs) are required to be consolidated by the entity which is

expected to absorb the majority of the expected losses or receive the majority of expected residual benefits.

Vesting

refers to when an employee earns compensation, thereby creating an obligation for the employer to pay that compensation.

Excess tax benefit

A higher share price at settlement versus the grant date results in a higher tax deduction than the cumulative stock-based compensation expense. This is known as an excess tax benefit or tax windfall because taxable income and tax expense are reduced.

Tax shortfall

A lower share price at settlement versus at the grant date results in a lower tax deduction than the cumulative stock-based compensation expense. This is known as a “tax shortfall” because taxable income and tax expense are increased.

In DC plans

(BES GIBI)

 the employer sponsor makes agreed-upon contributions to the plan.

Employees may also make contributions. Employees may choose how to invest their plan funds from designated options, typically composed of mutual and exchange traded funds of equities and bonds.

Amount is not defined

DB plans

 are commitments to pay a defined amount after an employee’s retirement. Benefits can be lump sum or periodic pension payments until death.

Amount of future benefit is defined.

Service cost (by pensions)

1. Current Service Cost (Cari Hizmet Maliyeti): Çalışanların içinde bulunulan dönemde çalışması sonucu kazandığı ek emeklilik haklarının bugünkü değeridir.

2. Past Service Cost (Geçmiş Hizmet Maliyeti): Emeklilik planında yapılan bir değişiklik (örneğin hakların iyileştirilmesi) nedeniyle, çalışanların geçmiş dönemdeki hizmetleri için oluşan ek yükümlülüktür.

Net interest expense/income (by pensions)

Zamanın geçmesiyle emeklilik yükümlülüğünün iskonto değerinin artmasından (zaman değeri / accretion) kaynaklanır.

Remeasurement (by pension)

a) Plan Varlıklarının Getiri Farkı: Plan varlıklarının gerçekleşen gerçek getirisi ile net faiz hesabında varsayılan getiri arasındaki fark.

b) Aktüeryal Kâr ve Zararlar (Actuarial Gains/Losses): Geleceğe dair varsayımlardaki değişimlerden kaynaklanır:

Functional currency,

which is the currency of the primary economic environment in which an entity operates.

Presentation currency.

The currency in which financial statement amounts are presented is known as the presentation currency.

Temporal method.

• Parasal kalemler: Her zaman cari döviz kuru ile çevrilir.
  
  

• Parasal olmayan kalemler (tarihsel maliyet ile ölçülmüş olanlar): Tarihsel maliyet üzerinden çevrilir.
  
  

• Parasal olmayan kalemler (cari değer ile ölçülmüş olanlar): Cari döviz kuru ile çevrilir.

If the parent’s currency is chosen as the functional currency, the xx method must be used.

Temporal

When the foreign currency is chosen as the functional currency, the xx method must be used.

Current rate

Credit unions, cooperative and mutual banks are owned by

their members, rather than being publicly traded like many banks.

Trust banks (Japan) are

commercial banks, and because their deposits are in the form of “money trusts” (typically with three- to five-year terms and one-year minimums), they can make long-term commercial loans and securities investments.

CAMELS is an acronym for

Capital adequacy

Asset quality

Management

Earnings sufficiency

Liquidity position

Sensitivity to market risk

Common Equity Tier 1 Capital includes

common stock,

issuance surplus related to common stock

retained earnings

accumulated

other comprehensive income

and certain adjustment

Tier 2 Capital includes

instruments that are subordinate to depositors and to general creditors of the bank, have an original minimum maturity of five years, and meet certain other requirements.

Liquidity Coverage Ratio (LCR)

• QLA (üstteki kısım): Nakit benzeri, kolayca satılabilir, değer kaybı düşük varlıklar.
  
  

• Nakit çıkışı (alttaki kısım): Stres senaryosunda 30 gün boyunca beklenen net çıkış.

Minimum gereklilik: %100

Net Stable Funding Ratio (NSFR)

Loss and loss adjustment expense ratio

 (Loss expense + Loss adjustment expense)/Net premiums earned.

_{This ratio indicates the degree of success an underwriter has achieved in estimating the risks insured. The lower the ratio, the greater the success.}

_{iums. A lower ratio indicates higher success.}

Combined ratio

Loss and loss adjustment expense ratio + Underwriting expense ratio

_{This ratio indicates the overall efficiency of an underwriting operation. A combined ratio of less than 100 is considered efficient.}

Underwriting loss ratio:

Ödenen hasarlar + değişen loss reserve / net primler → underwriting kalitesini gösterir

Dividends to policyholders (shareholders) ratio

 Dividends to policyholders (shareholders)/Net premiums earned

M-score

Score indicating probability of earnings manipulation

Higher M-scores (i.e., less negative numbers) indicate an increased probability of earnings manipulation.

Altman’s Z-Score nedir?

bir şirketin önümüzdeki 2 yıl içinde iflas etme olasılığını (kredi riskini / finansal çöküş ihtimalini) ölçmek için kullanılan Kantitatif / İstatistiksel bir skordur. (Higher better!)

Bes farkli kriterden olusur (Likidite, Kümülatif karlilik, Faliyet verimliligi, kaldirac, ve varlik devir hizi)

Capital Employed

Toplam Varlıklar – Kısa Vadeli Yükümlülükler

veya

Özsermaye + Uzun Vadeli Yabancı Kaynaklar

Cash-flow based accruals ratio: 

When the foreign currency decreases in value (weakens), the current rate method results in a (positive or negative) translation adjustment in stockholders’ equity.

Negative

Maturity transformation

When banks borrow money (liabilities) on shorter terms than the terms for lending to customers (assets), they create value by lending at higher rates than their short-term funding costs. This is called maturity transformation.

ncome earned from investments accounted for under the FVPL method includes both dividend income As well as xx from holding the investment shares during the accounting measurement period

 any gains or losses (realized or unrealized) (FVOCI de equity ye gider!!)

Under US GAAP, the xx goodwill method must be applied

Full

Paid leave for sabbaticals are considered short/long-term benefits.

Long

If the functional currency were changed, then Consol-Can would use the current rate method and the balance sheet exposure would be equal to xx

Net assets (total assets − total liabilities

When the current rate method is being used, all currency gains and losses are recorded as a xx

cumulative translation adjustment to shareholder equity.

Under the current rate method, both sales and cost of goods sold would be translated at the xx

Average exchange rate