Fundamentals of Financial Reporting

with Antoniya Baltova

4.8/5

(240)

This course is designed to equip you with the knowledge and skills necessary to effectively read, analyze, and interpret financial statements. You will learn to confidently navigate the complex world of financial reporting, evaluate a company's financial health, identify potential risks, and make strategic financial decisions.

7 hours 61 lessons

Start course

61 High Quality Lessons

3 Practical Tasks

7 Hours of Content

Certificate of Achievement

Course Overview

True and fair financial reports are crucial for the financial operations of companies from all industries. They provide valuable business performance information to a wide range of stakeholders, including the firm’s internal management and external investors. In the Fundamentals of Financial Reporting course, you will learn how to read, understand, and analyze the core financial statements (Income Statement, Balance Sheet, Statement of Changes in Equity, and Cash Flow Statement) and the supplementary financial information (Management Discussions and Analysis, Audit Reports, Notes to the Financial Statements, etc.) published in the Annual Report of a company. We examine the key aspects of revenue and expense recognition, learn how to calculate EPS and DEPS, distinguish between operating and non-operating components of the Income Statement, and much more. The Fundamentals of Financial Reporting course covers the specifics of the major current and non-current assets and liabilities and how to evaluate a company’s liquidity and solvency positions. You will learn to construct a Cash Flow Statement in Excel, convert cash flows from the Indirect to the Direct method, and the difference between Free Cash Flow to the Firm (FCFF) and Free Cash Flow to Equity (FCFE). We also introduce the concept of “quality” of financial reporting and discuss the possible motivations for low-quality financial reports, the Fraud Triangle, and the most common accounting warning signs. Sign up now to master your financial reporting skills and take you finance career to the next level!

Topics covered

Financial AccountingFinancial ReportingIFRSInvestment Analysis

What You'll Learn

In The Fundamentals Financial Reporting course, we examine various aspects of financial reporting and analysis, including:

The importance of financial reporting standards and the quality of published financial information

The IASB Conceptual Framework for Financial Reporting

Financial reporting and measurement basis for the main Balance Sheet elements

Profitability measures at different Income Statement levels

Preparing Cash Flow Statements under the direct and indirect methods

Common-size analysis, accounting warning signs, and fraud motivations

Curriculum

Introduction Free

1 Lesson 3 Min

In this introductory lesson, you will meet your instructor and get acquainted with the course structure and topics covered.

What does the course cover Free
Introduction to Financial Statements Analysis and Financial Reporting

13 Lessons 73 Min

In this section, we introduce the main financial statements and supplementary sources of information used in financial analysis. Next, we explain why auditors provide an opinion on published financial information and what the main types of audit reports are. Last but not least, we discuss the importance of setting financial reporting standards and examine the elements of the IASB Conceptual Framework for Financial Reporting.

Introduction to Financial Reporting Free

The Main Financial Statements Free

Supplementary Sources of Financial Information

Auditor's Reports

Financial Statement Analysis

The Financial Statement Analysis Framework

The Importance of Financial Reporting Standards

Standard-setting Bodies and Regulators

The Conceptual Framework for Financial Reporting (Part 1)

The Conceptual Framework for Financial Reporting (Part 2)

Basics of Accounting

General Requirements of Financial Statements

Alternative Financial Reporting systems
Understanding the Income Statement

13 Lessons 96 Min

This section of the financial reporting course is dedicated to the Income Statement. We explore and give examples of the main Income Statement items—gross and net revenue, Cost of Goods Sold (COGS), Selling, General and Administrative expenses (SG&A), payroll expenses, interest, taxes, and others. We show you how to calculate different levels of profitability, Earnings per Share (EPS), and Diluted Earnings per Share (DEPS). Last but not least, we examine the items that are included in the Other Comprehensive Income section.

Components of the Income Statement

Alternative Presentation Formats

Revenue Recognition - Principles

Revenue Recognition - Practical Applications

Expense Recognition - Principles

Expense recognition - Practical Applications

Financial Reporting for Non-recurring Items

Operating and Non- operating Components of the Income Statement

Earnings per Share (EPS)

Dilutive vs. Antidilutive Securities

Common-size Income Statement

The Income Statement - Ratio Analysis

What is Other Comprehensive Income
Understanding the Balance Sheet

12 Lessons 88 Min

Here, we cover in detail the main Balance Sheet elements - current and non-current assets and liabilities and shareholders’ equity. We explore different measurement bases of these elements (historical cost, current cost, fair value, etc.) and explain what a Common-Size Balance Sheet is. Lastly, we calculate and interpret some liquidity and solvency ratios.

Components of the Balance Sheet

The Balance Sheet - Alternative Presentation Formats

Major Uses and Limitations of Balance Sheet

Current Assets

Non-current Assets

Current Liabilities

Non-current Liabilities

Measurement Bases

Shareholders' Equity

Common-size Balance Sheet

Liquidity Ratios

Solvency Ratios
Understanding the Cash Flow Statement

13 Lessons 67 Min

This section of the financial reporting course is dedicated to the specifics of the Cash Flow Statement. You will learn how to prepare a Cash Flow Statement using the direct and indirect methods and how to convert from one to the other. We also show you what a Common-Size Cash Flow Statement looks like and how to calculate the Free Cash Flow to the Firm (FCFF), Free Cash Flow to Equity (FCFE), and other cash flow ratios.

Introduction to Cash Flow Statements

Major Sections in the Cash Flow Statement

How to Treat Non-cash Items

IFRS vs. US GAAP - Cash Flow

Direct vs. Indirect Method

How is the Cash Flow Statement Linked to Other Financial Statements

Constructing an Indirect Cash Flow Statement

Constructing a Direct Cash Flow Statement

Converting from the Indirect to Direct Method

Cash Flows from Investing and Financing activities

Common-size Cash Flow Statement

Free Cash Flow Indicators

Cash Flow Ratios
The Importance of Financial Reporting Quality

9 Lessons 43 Min

Knowing the main elements in the core financial statements gives you a broader perspective of financial reporting. In this section of The Fundamentals of Financial Reporting course, we define the “quality” of financial reporting and introduce a spectrum for assessing it. Some of the other topics we cover in this section include Conservative vs. Aggressive accounting practices, the Fraud Triangle, and the typical accounting warning signs.

What is Financial Reporting Quality

Spectrum for Assessing Financial Reporting Quality

Conservative vs. Aggressive Accounting

Motivations for Low-quality Financial Reporting

The Fraud Triangle

Mechanisms that Discipline Financial Reporting Quality

Presentation Choices

Manipulations of Financial Results

Accounting Warning Signs

Student feedback

4.8/5

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M K Junayed Parves

07.03.2023

This course gives a detailed orientation of financial accounting. Though I have done some of the basic in my bachelor, details explanation given here with practical example helps me to clear some confusion I have previously.