Intro to Financial Statements | Breezy CPA

Explore how Kellogg's 2016 10-K compiles audited financial statements—income statement, balance sheet, cash flows, and nine operating segments—into a comprehensive annual report.

Explore the financial statement framework under gap, including accrual accounting, the role of the FASB, and the objectives, concepts, and qualitative characteristics guiding investor information.

Learn how the gap financial statements interrelate, covering the balance sheet, income statement, comprehensive income, cash flows, and stockholders equity under accrual accounting.

Explore the balance sheet’s assets, liabilities, and stockholders’ equity, with current and non-current classifications. See how assets balance with liabilities and equity as of a moment in time.

Learn how fair value is used to measure assets and liabilities on the balance sheet, including the six-step process, valuation techniques, and the level 1–3 input hierarchy.

Explore how stockholders equity appears on the balance sheet, including authorized, issued, and outstanding shares. Examine common and treasury stock, dividends, and retained earnings, plus accumulated other comprehensive income.

Explore calculating investments with cost, equity, and consolidation methods, covering initial investment, earnings sharing, dividends treatment, and intercompany eliminations across ownership thresholds.

Learn the marketable securities classifications—trading, available-for-sale, and held-to-maturity—and how they are valued at fair value or cost, plus unrealized and realized gains on the balance sheet.

Explain fair value hedges and cash flow hedges, detailing how hedging instruments are recorded on financial statements, with gains in income from continuing operations and in accumulated other comprehensive income.

Record foreign currency transactions via translation and re measurement, using current rate for assets and liabilities and weighted average rate for revenues and expenses; translation adjustments in other comprehensive income.

Explore inventory cost, transfer of title under freight onboard shipping point or destination contracts, consignment, and calculating cost of goods sold under periodic and perpetual systems.

Explore inventory costing methods such as FIFO, LIFO, and dollar value LIFO, and compare ending inventory and cost of goods sold under perpetual and periodic systems.

Value inventory at the lower of cost or market by using the middle of ceiling, replacement cost, and floor; FIFO yields 960 on balance sheet when market is 1000.

Explore property, plant, and equipment on the balance sheet, including fixed assets and depreciation; compare capitalization with expensing and apply the relative fair market value method.

Explore depreciation concepts for tangible assets, including straight line, double declining balance, and units of production methods, and learn how cost, salvage value, and useful life affect financial statements.

Capitalize interest on assets built for own use or custom orders during construction, but not after completion, using weighted average accumulated expenditures times construction loan rate, then depreciate capitalized amount.

Explore how to dispose of fixed assets, record depreciation and gains or losses, and account for non-monetary exchanges with and without commercial substance, including fair value and book value.

Identify identifiable and unidentifiable intangible assets, learn how to record costs, amortize, and test for impairment, including goodwill and the impact on the balance sheet.

Classify current and non-current liabilities, record accrued expenses, accounts payable and deferred revenues, and explain contingencies, subsequent events, and refinancing of short-term obligations.

Explore how to issue bonds, distinguish term, serial, collateralized and debenture bonds, and apply the effective interest method to record premiums and discounts, including journal entries.

Use present value to price bonds by valuing the principal and interest as lump-sum PV and ordinary annuity, showing a discounted carrying value when market rate exceeds the stated rate.

Learn to record accounts receivable on the balance sheet at net realizable value, including bad debt, discounts, returns, and methods such as the income statement approach and aging.

Explore how to convert accounts receivable into cash through pledging, assigning, signing, and factoring, including how each method affects cash, liabilities, and the balance sheet.

Explore how employers record and calculate pension obligations under defined contribution and defined benefit plans, including pension expense, accrued costs, and the impact of plan assets and gains or losses.

Explore income statement, or statement of earnings and comprehensive income, detailing operating and non operating income, income tax, discontinued operations, and other comprehensive income, with single-step and multiple-step formats.

Explore accounting changes and error corrections, including changes in principle, estimates, and reporting entity, with retrospective and prospective treatments, impact on comparative statements, and required disclosures.

Understand how deferred tax assets and liabilities arise from temporary differences between book and tax reporting, driven by depreciation and other timing items, while permanent differences never reverse.

Explore interim financial statements as quarterly components of the annual report under GAAP, emphasizing timeliness, quarterly revenue recognition, expense matching, and asset scheduling, with SEC Regulation SK and 10-Q/10-K deadlines.

Explain how segment reporting identifies operating segments using 10 percent revenue, profit, or asset tests, applies the 75 percent rule, and discloses segment products and measurement basis.

Learn how installment sales influence revenue recognition under accrual, and compare the installment and cost recovery methods, including deferred gross profit and accounts receivable effects.

Learn how to account for long term construction contracts using the percentage of completion method and the completed contract method, including revenue recognition and timing of profit.

Learn how the statement of cash flows reports changes in cash and cash equivalents across operating, investing, and financing activities, using direct and indirect methods and accrual accounting.

Explore earnings per share calculations, including basic and diluted EPS, for simple and complex capital structures, accounting for outstanding shares, dividends, and treasury stock.

Learn to compute key financial statement ratios from balance sheet data, including working capital, current and quick ratios, debt measures, and inventory turnover to evaluate a company's performance.

Explore the four lease types—operating, capital, sales type, and direct financing—and learn how title transfer and present value criteria shape lessee and lessor accounting.