- CFA Exams
- 2022 Level I
- Study Session 6. Financial Reporting and Analysis (2)
- Reading 17. Understanding Income Statements
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Learning Outcome Statements PDF Download
|1. Components and Format of the Income Statement|
a. describe the components of the income statement and alternative presentation formats of that statement;
|2. Revenue Recognition|
b. describe general principles of revenue recognition and accounting standards for revenue recognition;
c. calculate revenue given information that might influence the choice of revenue recognition method;
|3. Expense Recognition|
d. describe general principles of expense recognition, specific expense recognition applications, and implications of expense recognition choices for financial analysis;
|4. Non-Recurring Items and Non-Operating Items|
e. describe the financial reporting treatment and analysis of non-recurring items (including discontinued operations, unusual or infrequent items) and changes in accounting standards;
f. contrast operating and non-operating components of the income statement;
|5. Earnings per Share|
g. describe how earnings per share is calculated and calculate and interpret a company's earnings per share (both basic and diluted earnings per share) for both simple and complex capital structures;
h. contrast dilutive and antidilutive securities and describe the implications of each for the earnings per share calculation;
|6. Analysis of the Income Statement|
i. formulate income statements into common-size income statements;
j. evaluate a company's financial performance using common-size income statements and financial ratios based on the income statement;
|7. Comprehensive Income|
k. describe, calculate, and interpret comprehensive income;
l. describe other comprehensive income and identify major types of items included in it.
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