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Classification And Accounting For Debt And Equity

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Before starting this self study program, please go through the instructional document.

Overview

  • Where to disclose?
    3 mins
  • Importance of Liabilities
    22 mins
  • Bond Issuance
    47 mins
  • Bond Investments
    80 mins
  • Lease Liabilities
    104 mins
  • Shareholders Equity
    127 mins
  • Stock Splits
    152 mins

Course Description

The classification and accounting for debt and equity instruments can be quite complicated due in part to the complexity inherent in certain instruments, the sheer volume of transaction documents that may need to be considered in performing the accounting analysis, and the myriad of accounting guidance that may be relevant. In many cases, an accounting outcome can be significantly affected by the existence or absence of one sentence in the relevant documents. Consideration needs to be given to not only the appropriate balance sheet classification of instruments, such as preferred stock and warrants, which may have both debt and equity characteristics, but also the subsequent measurement. Additionally, instruments such as debt and preferred stock oftentimes have embedded features that may need to be given separate accounting recognition. The accounting analysis is further complicated if multiple instruments are issued as part of the same transaction as that typically necessitates an allocation of proceeds to the various instruments or features.

This CPE webinar begins by discussing the concept of classification and its important role on the financial statements, and then moves into coverage of the company’s two primary forms of financing: debt and equity.  The financial statements and the footnotes of the companies featured in this CPE course include General Motors, Volkswagen (an IFRS user), Amazon, Home Depot and Panera.

Major topics covered in this online CPE webinar:

  • Key measurement issues and the current classification
  • Introduction to liabilities and contingencies        
  • Accounting for bond issuances
  • Bond investments          
  • Accounting for leases (lessees)
  • Shareholders’ equity

Learning Objectives

  • To describe the key measurement issues addressed by the financial statements and explain how the current classification is used. 
  • To define the concept of a contingent liability and explain how contingencies are accounted for.
  • To define what a bond is and explain how bond issuances are accounted for using the effective interest method.
  • To determine how the effective interest method is used to account for bond investments and describe how management’s intention determines how changes in bond market values are accounted for.
  • To describe the difference between short-term and long-term (financing and operating) leases and how both kinds of leases are reflected on the financial statements of the lessee.
  • To summarize the shareholders’ equity section of the balance sheet and describe the transactions leading to each line item within that section

Who Should Attend?

  • Certified Management Accountant
  • Certified Public Accountant
  • Chief Accounting Officer
  • Cloud Accountants
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • Senior Accountant
  • Staff of Accounting Firm
  • Young CPA

Testimonial

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