Chapter 4 - Understanding income statements. This chapter describe the components of the income statement and alternative presentation formats of that statement; describe general principles of revenue recognition and accrual accounting, specific revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, gross and net reporting of revenue), and implications of revenue recognition principles for financial analysis;. | Chapter 4 Understanding income statements Presenter’s name Presenter’s title dd Month yyyy Customization noteS: Hyperlinks to the annual reports of companies used in this presentation are provided at the bottom of the slide. If the presenter saves the annual report to the same computer drive on which the PowerPoint presentation is saved, clicking the hyperlink will take the presenter to the annual report. Note also that the income statement and other relevant items are bookmarked in each annual report PDF. To navigate to the bookmarked pages, select the bookmark icon once the PDF is open (2nd down on far left of screen when PDF is opened). This presentation contains numerous numerical examples. The presenter may wish to delete the solution slides from any handouts. In addition, the presenter may wish to shorten the presentation by eliminating some or all of the numerical examples. LEARNING OUTCOMES Describe the components of the income statement and alternative presentation formats of that statement. Describe general principles of revenue recognition and accrual accounting, specific revenue recognition applications (including accounting for long-term contracts, installment sales, barter transactions, gross and net reporting of revenue), and implications of revenue recognition principles for financial analysis. Calculate revenue given information that might influence the choice of revenue recognition method. Describe general principles of expense recognition, specific expense recognition applications, and implications of expense recognition choices for financial analysis. Describe the financial reporting treatment and analysis of nonrecurring items (including discontinued operations, extraordinary items, unusual or infrequent items) and changes in accounting standards. Distinguish between the operating and non-operating components of the income statement. Describe how earnings per share is calculated and calculate and interpret a company’s earnings per share (both . | Chapter 4 Understanding income statements Presenter’s name Presenter’s title dd Month yyyy Customization noteS: Hyperlinks to the annual reports of companies used in this presentation are provided at the bottom of the slide. If the presenter saves the annual report to the same computer drive on which the PowerPoint presentation is saved, clicking the hyperlink will take the presenter to the annual report. Note also that the income statement and other relevant items are bookmarked in each annual report PDF. To navigate to the bookmarked pages, select the bookmark icon once the PDF is open (2nd down on far left of screen when PDF is opened). This presentation contains numerous numerical examples. The presenter may wish to delete the solution slides from any handouts. In addition, the presenter may wish to shorten the presentation by eliminating some or all of the numerical examples. LEARNING OUTCOMES Describe the components of the income statement and alternative presentation formats of
