Level I CFA® Program Prep – Financial Statement Analysis

Financial Statement Analysis – An Introduction
3 Nuggets | 1 Quiz
Major Financial Statements
Auditor’s Report and Other Sources of Information
Financial Statement Analysis Framework
QUIZ: Financial Statement Analysis – An Introduction
Financial Reporting Mechanics (removed since 2019)
3 Nuggets | 1 Quiz
Business and Accounting Process
Accrual Accounting and Valuation Adjustments
Accounts and Financial Statements
QUIZ: Financial Reporting Mechanics
Financial Reporting Standards
3 Nuggets | 1 Quiz
Standard Setting Bodies
The IFRS Framework
Convergence, Comparison, and Evolution of Standards
QUIZ: Financial Reporting Standards
Understanding Income Statements
9 Nuggets | 1 Quiz
Components and Format of an Income Statement
Revenue Recognition
Inventory Expense Recognition
Depreciation and Amortisation Expense Recognition
Non-Recurring Items and Non-Operating Items
Basic Earnings Per Share
Diluted Earnings Per Share
Common-Size and Ratio Analysis
Comprehensive Income
QUIZ: Understanding Income Statements
Understanding Balance Sheets
7 Nuggets | 1 Quiz
Components and Format of the Balance Sheet
Current Assets
Current Liabilities
Non-current Assets
Non-Current Liabilities
Owners’ Equity
Analysis of Balance Sheets
QUIZ: Understanding Balance Sheets
Understanding Cash Flow Statements
3 Nuggets | 1 Quiz
Principles and Classification of Cash Flows
Methods of Presentation
Analysis of Cash Flow Statements
QUIZ: Understanding Cash Flow Statements
Financial Analysis Techniques
4 Nuggets | 1 Quiz
Analytical Process, Tools and Techniques
Activity, Liquidity and Solvency Ratios
Profitability Ratios and DuPont Analysis
Equity and Credit Analysis
QUIZ: Financial Analysis Techniques
Inventories
3 Nuggets | 1 Quiz
Inventory Accounting
Inventory Valuation Methods
The LIFO Method
QUIZ: Inventories
Long-Lived Assets
4 Nuggets | 1 Quiz
Capitalisation of Long-Lived Assets
Depreciation of PP&E
Amortisation of Intangibles
Impairments, Revaluation and Derecognition
QUIZ: Long Lived Assets
Income Taxes
2 Nuggets | 1 Quiz
Deferred Taxes
Deferred Taxes II
QUIZ: Income Taxes
Non-Current Liabilities
5 Nuggets | 1 Quiz
Bonds
Bonds II
Leases
Pensions Plans
Solvency Ratios
QUIZ: Non-Current Liabilities
Financial Reporting Quality
2 Nuggets | 1 Quiz
Financial Reporting Quality Concepts
Accounting Bias and Earnings Manipulation
QUIZ: Financial Reporting Quality
Financial Statement Analysis – Applications
3 Nuggets | 1 Quiz
Analysing Past and Forecasting Future Performance
Credit Quality Assessment and Equity Screening
Adjusting Financial Statements for Comparability
QUIZ: Financial Statement Analysis: Applications
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Depreciation and Amortisation Expense Recognition

Level I CFA® Program Prep – Financial Statement Analysis Understanding Income Statements Depreciation and Amortisation Expense Recognition
  • [d] Principles of expense recognition, implications of expense recognition choices for financial analysis.

Terms covered: Period costs, Depreciation, Amortisation, Intangible assets, Straight-line method, Residual value, Useful life, Double declining balance method

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Related Terms:
  • Term: Double declining balance method
  • Term: Straight-line method
  • Term: Intangible assets
  • Term: Residual value
  • Term: Period costs
  • Term: Depreciation
  • Term: Amortisation
  • Term: Useful life
  • Term: Expenses

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Welcome to PrepNuggets

Hey visitor,

Are you a CFA Level I candidate, or someone who is exploring taking the CFA exam? Four years ago, I was in your shoes. I am a Computer Engineering graduate and have been working as an engineer all my life. Having developed a keen interest in finance, I decided on a career switch to the finance field and enrolled into the CFA program at the same time.

Was it tough? You bet!

Adjusting to the drastic career change was tough. I naturally neglected the preparation for my Level I exam in June 2014. It was not until the middle of March 2014 that I realized I only had a little more than 2 months to the exam. To compound my problems, I basically did not have a preparation strategy. Having no background in finance at all, I tried very hard to read the curriculum from cover to cover, but eventually that fell flat. I can still recall the number of times I dozed off while studying, or just going back and forth trying to understand even the simplest concept. My mind simply could not keep up after a hard day at work.

Does all these sound familiar to you? Well, take heart. No matter how bleak it seems, at least sit for the exam and treat it as a learning experience. That was basically my attitude as I burrowed through my exam prep with toil and stress. By God’s grace, I did pass my Level I exam in June 2014. It was an experience I would not want to revisit though.

Tweaking the approach

For the Level II exam, I endeavoured not to repeat the mistakes I made. Based on the Pareto 80/20 principle, I learnt to extract the most essential bits from the curriculum enough to give me that 80% result to pass. Being a visual learner, I took notes and summaries in pictorial form. Instead of reserving huge segments of time to study, I carved out pockets of time to learn and practise – accommodating to my full-time job. I managed to pass my Level II and Level III exams consecutively with considerably less effort and stress than when I did my level I.

Why PrepNuggets?

I love the CFA Program and truly value the skills and ethics that are imparted to make me a better finance professional. My desire is to help candidates who are keen to pursue this path to do so in the most effective and painless process as possible – based on the lessons that I learnt as a candidate. I have set up PrepNuggets with the vision to revolutionise learning by using technology, catering to the short attention span that we can afford. If this makes sense to you, join the PrepNuggets community by signing up for your free student account. I am confident that the materials that we have laboriously crafted will bring you closer to that dream pass with just that 20% effort. Let us do the hard work for you.

Regards,

Keith Tan, CFA
Founder and Chief Instructor
PrepNuggets

About the Author

Keith Tan, CFA

Keith is the founder and chief instructor of PrepNuggets. He has a wide range of interests in all things related to tech, from web development to e-learning, gadgets to apps. Keith loves exploring different cultures and the untouched gems around the world. He currently lives in Singapore but frequently travels to share his knowledge and expertise with others.

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