Analisa Laporan Keuangan 6-7 - Analisis Aktifitas Investasi Antar Perusahaan Dan Operasi

ANALISA LAPORAN KEUANGAN
“ANALISIS AKTIVITAS
INVESTASI ANTAR PERUSAHAAN
DAN OPERASI PERUSAHAAN”
Arditya D. Andika SE.,Msi.,Akt.
Mata Kuliah (MK) : ANALISA
Semester : 7 SKS : 3 Kode MK : ESA7103
LAPORAN KEUANGAN
Program Studi : AKUNTANSI (S1) Dosen Pengampu : ARDITYA DIAN ANDIKA SE.,Msi.,Akt.
Tatap Muka ke : 6 Waktu : 3 X 60 MENIT
Standar Kompetensi (CPMK)

1. Mampu melakukan analisis atas transaksi Laporan Keuangan;
2. Mampu menyusun laporan hasil analisis atas Laporan Keuangan.
Kompetensi Dasar (Sub CPMK)

Mampu melakukan analisis pada aktifitas investasi antar perusahaan dengan tepat.
Indikator Pencapaian Kompetensi Dasar (Indikator)

Ketepatan melakukan analisis investsi.
Materi Pembelajaran (Bahan Ajar)

Analisis Aktifitas Investasi Antar Perusahaan.
Bentuk dan Metode Pembelajaran (BP dan MP)

Tatap muka di kelas menggunakan metode ceramah, presentasi, diskusi interaktif dan tanya jawab
Langkah-langkah Pembelajaran
No. Kegiatan Pembelajaran Waktu Referensi

1 Pendahuluan : 20 menit 1,2,3,4
- Menjelaskan deskripsi mata kuliah;
- Menjelaskan maksud dan tujuan serta manfaat mata kuliah;
- Menjelaskan Cakupan Materi.
2 Kegiatan Inti : 150 menit 1,2,3,4
- Analisis Aktifitas Investasi Antar Perusahaan;
- Manfaat pentingnya mata kuliah didalam dunia kerja.
3 Penutup : 10 menit 1,2,3,4
- Penyimpulan materi kuliah yang disampaikan;
- Memberikan gambaran umum untuk materi kuliah pertemuan berikutnya.
Sarana dan Penilaian Pembelajaran

Media : Paparan Presentasi, Papan putih, Sepidol, Laptop, LCD, Internet
Referensi : 1. Subramanyam, KR, John J. Wild, (2010).Analisis Laporan Keuangan. Salemba Empat (Ed.10) ;
2. Hanafi, Mamduh, Abdul Halim (2005). Analisa Laporan Keuangan, BPFE UGM;
3. Pedoman Standar Akuntansi Keuangan (PSAK).
4. Jurnal dan/atau Laporan Keuangan Published dari Internet.
Penilaian : - Kehadiran (Presensi) : 10%, dengan jumlah kehadiran minimum 75% dari jumlah tatap muka;
- Tugas : 20%
- Ujian Tengah Semester : 30%
- Ujian Akhir Semester : 40%
Tugas / Ujian
Bentuk : -
Contoh : -
LAPORAN KEUANGAN


Mampu melakukan analisis pada aktifitas operasi dengan tepat.

Ketepatan melakukan analisis operasi.

Analisis Aktifitas Operasi.


- Menjelaskan deskripsi mata kuliah;
- Menjelaskan maksud dan tujuan serta manfaat mata kuliah;
- Menjelaskan Cakupan Materi.
- Analisis Aktifitas Operasi;
- Manfaat pentingnya mata kuliah didalam dunia kerja.
3 Penutup : 10 menit 1,2,3,4
- Penyimpulan materi kuliah yang disampaikan;

Media : Paparan Presentasi, Papan putih, Sepidol, Laptop, LCD, Internet
- Tugas : 20%
Tugas / Ujian
Bentuk : -
Contoh : -
Investment Securities
Composition
Investment
Investment (marketable)
(marketable) securities:
securities:
Debt
Debt Securities
Securities
•• Government
Government or
or corporate
corporatedebt
debtobligations
obligations
Equity
Equity Securities
Securities
•• Corporate
Corporatestock
stockthat
thatis
isreadily
readilymarketable
marketable
Accounting for Investment Securities
• SFAS 115.
– Departure from the traditional lower-of-cost-or-
market principle.
– Prescribes that investment securities be reported on
the balance sheet at cost or fair (market) value,
depending on the type of security and the degree of
influence or control that the investor company has
over the investee company.
– Accounting is determined by its classification.
Accounting for Debt Securities

Accounting for Transfers between Security Classes
Classification and Accounting for Equity Securities
Analyzing Investment Securities
• Two main objectives:
– To separate operating performance from investing (and
financing) performance
• Remove all gains (losses) relating to investing activities
• Separate operating and nonoperating assets when
determining RNOA
– To analyze accounting distortions from securities
• Opportunities for gains trading
• Liabilities recognized at cost
• Inconsistent definition of equity securities
• Classification based on intent
Equity Method Accounting
• Required for intercorporate investments in which
the investor company can exert significant
influence over, but does not control, the investee.
– Reports the parent’s investment in the subsidiary, and
the parent’s share of the subsidiary’s results, as line
items in the parent’s financial statements (one-line
consolidation)
Note: Generally used for investments representing

20 to 50 percent of the voting stock of a company’s
equity securities--main difference between
consolidation and equity method accounting rests in
the level of detail reported in financial statements
• Investment account:
– Initially recorded at acquisition cost
– Increased by % share of investee earnings
– Decreased by dividends received
• Income:
– Investor reports % share of investee company earnings
as “equity earnings” in its income statement
– Dividends are reported as a reduction of the investment
account, not as income
Equity Method Mechanics
• Assume that Global Corp. Synergy, Inc.
acquires for cash a 25%
interest in Synergy, Inc. for Current assets
$500,000, representing one- 700,000
fourth of Synergy’s
stockholders’ equity as of the PP&E
acquisition date. 5,600,000
Total assets
6,300,000
• Acquisition entry:
Current liabilities 300,000

Investment500,000
Long-term debt
Cash 4,000,000
500,000
Stockholders’ Equity 2,000,000
Total liabs and equity 6,300,000
Equity Method Mechanics
• Subsequent to the Investment 25,000
acquisition date, Synergy Equity earnings
reports net income of 25,000
$100,000 and pays (to record proportionate share of
dividends of $20,000. investee company earnings)
Global records its
proportionate share of Cash 5,000
Synergy’s earnings and
Investment
the receipt of dividends
5,000
as follows:
(to record receipt of dividends)
 Important points:
 Investment account reported at an amount equal to the proportionate
share of the stockholders’ equity of the investee company. Substantial
assets and liabilities may not be recorded on balance sheet unless the
investee is consolidated.
 Investment earnings should be distinguished from core operating
earnings (unless strategic).
 Investments are reported at adjusted cost, not at market value.
 Should discontinue equity method when investment is reduced to zero
and should not provide for additional losses unless the investor has
guaranteed the obligations of the investee or is otherwise committed to
providing further financial support to the investee.
 Resumes once all cumulative deficits have been recovered via investee
earnings.
 Excess of initial investment over the proportionate share of the book
value is allocated to identifiable tangible and intangible assets that are
depreciated/amortized over their respective useful lives. Investment
income is reduced by this additional expense. The excess not allocated
in this manner is treated as goodwill and is no longer amortized.
Business Combinations
The merger, acquisition, reorganization, or restructuring of two or more
businesses to form another business entity
Motivations
• enhance company image and growth potential

• acquiring valuable materials and facilities
• acquiring technology and marketing channels
• securing financial resources
• strengthening management
• enhancing operating efficiency
• encouraging diversification
• rapidity in market entry
• achieving economies of scale
• acquiring tax advantages
• management prestige and perquisites
• management compensation
Accounting for Business Combinations
• Purchase method of accounting

– Companies are required to recognize on their balance sheets
the fair market value of the (tangible and intangible) assets
acquired together with the fair market value of any liabilities
assumed.
• Tangible assets are depreciated and the identifiable intangible
assets amortized over their estimated useful lives.
• Nonamortization of goodwill
Consolidated Financial Statements
Consolidated
Consolidatedfinancial
financialstatements
statementsreport
reportthe
theresults
resultsof
ofoperations
operationsand
and
financial
financialcondition
conditionof
ofaaparent
parentcorporation
corporationand
andits
itssubsidiaries
subsidiariesin
inone
oneset
setof
of
statements
statements
Basic Technique of Consolidation
Consolidation
Consolidationinvolves
involvestwo
twosteps:
steps:aggregation
aggregationand
andelimination
elimination
Aggregation
Aggregationof
ofassets,
assets,liabilities,
liabilities,revenues,
revenues,and
and
expenses of subsidiaries with the parent
expenses of subsidiaries with the parent
Elimination
Eliminationof
ofintercompany
intercompanytransactions
transactions
(and
(andaccounts)
accounts)between
betweensubsidiaries
subsidiariesand
andthe
theparent
parent
Note:Minority
Note: Minorityinterest
interestrepresents
representsthe
theportion
portionof
ofaasubsidiary’s
subsidiary’sequity
equity
securities
securitiesowned
ownedby
byother
otherthan
thanthe
theparent
parentcompany
company
Consolidation Illustration
On
OnDecember
December 31,
31,Year
Year 1,
1, Synergy
SynergyCorp.
Corp. purchases
purchases100% 100% of
of
Micron
MicronCompany
Companyby byexchanging
exchanging10,000
10,000shares
sharesof of its
itscommon
common
stock
stock($5
($5par
par value,
value, $77
$77market
market value)
value) for
for all
allof
of the
thecommon
common
stock
stockof
of Micron.
Micron.
On
Onthethedate
dateofof the
theacquisition,
acquisition, the
thebook
bookvalue
valueof
of Micron
Micronisis
$620,000.
$620,000. Synergy
Synergyisiswilling
willingto
topay
paythe
themarket
market price
priceof of
$770,000
$770,000because
becauseitit feels
feelsthat
that Micron’s
Micron’sproperty,
property, plant,
plant, and
and
equipment
equipment (PP&E)
(PP&E)isisundervalued
undervaluedby by$20,000,
$20,000, itit has
hasanan
unrecorded
unrecordedtrademark
trademarkworthworth$30,000
$30,000andandintangible
intangiblebenefits
benefits
of
of the
thebusiness
businesscombination
combination(corporate
(corporatesynergies,
synergies, market
market
position,
position, and
andthethelike)
like) are
arevalued
valuedat at $100,000.
$100,000.
Consolidation Illustration
The
Thepurchase
purchaseprice
priceis,
is,therefore,
therefore,allocated
allocatedas
asfollows:
follows:
Purchase
Purchaseprice
price 770,000
770,000
Book
Bookvalue
valueof
ofMicron
Micron 620,000
620,000
Excess
Excess 150,000
150,000
Excess
Excessallocated
allocatedtoto–– useful
usefullife
life annual
annual
deprec/amort.
deprec/amort.
Undervalued
UndervaluedPP&E
PP&E 20,000
20,000 10
10 2,000
2,000
Trademark
Trademark 30,000
30,000 55 6,000
6,000
Goodwill
Goodwill 100,000
100,000 indefinite
indefinite -0-
-0-
150,000
150,000
Synergy Corp and Micron Company
Consolidated Income Statement Steps
 The four consolidation entries are
1. Replace $620,000 of the investment account with the book
value of the assets acquired. If less than 100% of the
subsidiary is owned, the credit to the investment account is
equal to the percentage of the book value owned and the
remaining credit is to a liability account, minority interest.
2. Replace $150,000 of the investment account with the fair
value adjustments required to fully record Micron’s assets at
fair market value.
3. Eliminate the investment income recorded by Synergy and
replace that account with the income statement of Micron. If
less than 100% of the subsidiary is owned, the investment
income reported by the Synergy is equal to its proportionate
share, and an additional expense for the balance is reported
for the minority interest in Micron’s earnings.
4. Record the depreciation of the fair value adjustment for
Micron’s PP&E and the amortization of the trademark. Note,
there is no amortization of goodwill under current GAAP.
Synergy Corp and Micron Company
Consolidated Income Statement Steps
 Income statement of Synergy is combined with that of Micron.
 Depreciation / amortization of excess of purchase price over the
book value of Micron’s assets is recorded as an additional
expense in the consolidated income statement.
 Any intercompany profits on sales of inventories held by the
consolidated entity at year-end, along with any intercompany
profits on other asset transactions, are eliminated.
 Equity investment account on Synergy’s balance sheet is
replaced with the Micron assets / liabilities to which it relates.
 Consolidated assets / liabilities reflect the book value of Synergy
plus the book value of Micron, plus the remaining undepreciated
excess of purchase price over the book value of Micron assets.
 Goodwill, which was previously included in the investment
account balance, is now broken out as a separately identifiable
asset on the consolidated balance sheet.
Impairment of Goodwill
• Goodwill recorded in the consolidation process is subject to
annual review for impairment.
– The fair market value of Micron is compared with the book
value of its associated investment account on Synergy’s books.
– If the current market value is less than the investment balance,
goodwill is deemed to be impaired and an impairment loss
must be recorded in the consolidated income statement.
– Impairment loss reported as a separate line item in the
operating section of Synergy’s consolidated income statement.
– A portion of the goodwill contained in Synergy’s investment
account is written off, and the balance of goodwill in the
consolidated balance sheet is reduced accordingly.
Issues in Business Combinations
Contingent
ContingentConsideration
Consideration--aacompany
companyusually
usuallyrecords
recordsthe
theamount
amountof
of
any
anycontingent
contingentconsideration
considerationpayable
payableininaccordance
accordancewith withaapurchase
purchase
agreement
agreementwhen whenthe thecontingency
contingencyis isresolved
resolvedandandthetheconsideration
considerationis is
issued
issuedororissuable.
issuable.
Allocating
AllocatingTotalTotalCostCost--once
onceaacompany
companydetermines
determinesthe thetotal
totalcost
costofofan
an
acquired
acquiredentity,
entity,ititis
isnecessary
necessaryto toallocate
allocatethis
thiscost
costtotoindividual
individualassets
assets
received;
received;thetheexcess
excessof oftotal
totalcost
costover
overthe
theamounts
amountsassigned
assignedto toidentifiable
identifiable
tangible
tangibleand
andintangible
intangibleassets
assetsacquired,
acquired,less
lessliabilities
liabilitiesassumed,
assumed,is isrecorded
recorded
as
asgoodwill.
goodwill.
In-Process
In-ProcessResearch
Research& &Development
Development(IPR&D)(IPR&D)--some somecompanies
companiesare are
writing
writingoff
offaalarge
largeportion
portionof ofananacquisition’s
acquisition’scosts
costsas aspurchased
purchasedresearch
research
and
anddevelopment.
development.PendingPendingaccounting
accountingstandard
standardwill
willrequire
requirecapitalization
capitalizationofof
IRR&D
IRR&Dandandannual
annualtesting
testingfor
forimpairment.
impairment.
Debt
Debtin inConsolidated
ConsolidatedFinancial FinancialStetements
Stetements--Liabilities
Liabilitiesin
inconsolidated
consolidated
financial
financialstatements
statementsdo donot
notoperate
operateasasaalien
lienupon
uponaacommon
common
pool
poolofofassets.
assets.
Issues in Business Combinations
Gain
Gainon
onsubsidiary
subsidiarystock
stocksales
sales --The
Theequity
equityinvestment
investmentaccount
accountis
is
increased
increasedvia
viasubsidiary
subsidiarystock
stocksales.
sales.Companies
Companiescan
canrecord
recordthe
thegain
gaineither
either
to
toincome
incomeor
orto
toAPIC
APIC
Consequences
Consequencesof
of Accounting
Accountingfor
forGoodwill
Goodwill--goodwill
goodwillis
isnot
notpermanent
permanent
and
andthe
thepresent
presentvalue
valueof
ofsuper
superearnings
earningsdeclines
declinesas
asthey
theyextend
extendfurther
furtherinto
into
the
thefuture
future––future
futureimpairment
impairmentlosses
lossesare
arelikely
likely
Push
Push‑‑Down
DownAccounting
Accounting --aacontroversial
controversialissue
issueis
ishow
how the
theacquired
acquired
company
company(from
(fromaapurchase)
purchase)reports
reportsassets
assetsand
andliabilities
liabilitiesin
inits
itsseparate
separate
financial
financialstatements
statements(if
(ifthat
thatcompany
companysurvives
survivesas
asaaseparate
separateentity)
entity)
Additional Limitations of Consolidated Financial Statements
• Financial statements of the individual companies composing the
larger entity are not always prepared on a comparable basis.
• Consolidated financial statements do not reveal restrictions on use
of cash for individual companies. Nor do they reveal intercompany
cash flows or restrictions placed on those flows.
• Companies in poor financial condition sometimes combine with
financially strong companies, thus obscuring analysis.
• Extent of intercompany transactions is unknown unless the
procedures underlying the consolidation process are reported.
• Accounting for the consolidation of finance and insurance
subsidiaries can pose several problems for analysis. Aggregation
of dissimilar subsidiaries can distort ratios and other relations.
Additional Limitations of Consolidated Financial Statements
• Financial statements of the individual companies composing the
larger entity are not always prepared on a comparable basis.
• Consolidated financial statements do not reveal restrictions on use
of cash for individual companies. Nor do they reveal intercompany
cash flows or restrictions placed on those flows.
• Companies in poor financial condition sometimes combine with
financially strong companies, thus obscuring analysis.
• Extent of intercompany transactions is unknown unless the
procedures underlying the consolidation process are reported.
• Accounting for the consolidation of finance and insurance
subsidiaries can pose several problems for analysis. Aggregation
of dissimilar subsidiaries can distort ratios and other relations.
Consequences of Accounting for Goodwill
• Superior competitive position is subject to change.
– Goodwill is not permanent.
• Residual goodwill - measurement problems.
• Timing of goodwill write-off seldom reflects prompt
recognition of this loss in value.
• In many cases goodwill is nothing more than mechanical
application of accounting rules giving little consideration to
value received in return.
• Goodwill on corporate balance sheets typically fails to reflect
a company’s entire intangible earning power
Pooling Accounting
• Used prior to the passage of the current business
combination accounting standards.
– Disallowed for combinations initiated post June 30, 2001.
– Companies may continue its use for acquisitions accounted for
under that method prior to the effective date of the standard.
Under the purchase method, the investment account is debited for the
purchase price. Under the pooling method, this debit is in the amount of
the book value of the acquired company. Assets are not written up from
the historical cost balances reported on the investee company balance
sheet, no new intangible assets are created in the acquisition, and no
goodwill is reported. The avoidance of goodwill was the principle attraction
of this method.
Pooling method Illustration
On
OnDecember
December 31,
31,Year
Year 1,
1, Synergy
SynergyCorp.
Corp. purchases
purchases100% 100% of
of
Micron
MicronCompany
Companyby byexchanging
exchanging10,000
10,000shares
sharesof of its
itscommon
common
stock
stock($5
($5par
par value,
value, $77
$77market
market value)
value) for
for all
allof
of the
thecommon
common
stock
stockof
of Micron.
Micron.
On
Onthethedate
dateofof the
theacquisition,
acquisition, the
thebook
bookvalue
valueof
of Micron
Micronisis
$620,000.
$620,000. Synergy
Synergyisiswilling
willingto
topay
paythe
themarket
market price
priceof of
$770,000
$770,000because
becauseitit feels
feelsthat
that Micron’s
Micron’sproperty,
property, plant,
plant, and
and
equipment
equipment (PP&E)
(PP&E)isisundervalued
undervaluedby by$20,000,
$20,000, itit has
hasanan
unrecorded
unrecordedtrademark
trademarkworthworth$30,000
$30,000andandintangible
intangiblebenefits
benefits
of
of the
thebusiness
businesscombination
combination(corporate
(corporatesynergies,
synergies, market
market
position,
position, and
andthethelike)
like) are
arevalued
valuedat at $100,000.
$100,000.
5-32
Derivative Securities
Background
Hedges
Hedgesarearecontracts
contractsthat
thatseek
seekto
toinsulate
insulatecompanies
companiesfrom
from
market
marketrisks—securities
risks—securitiessuch
suchasasfutures,
futures,options,
options,and
andswaps
swapsare
are
commonly
commonlyused
usedas
ashedges
hedges
Derivative
Derivativesecurities,
securities,or
orsimply
simplyderivatives
derivativesare
arecontracts
contractswhose
whose
value
valueis
isderived
derivedfrom
fromthe
thevalue
valueof
ofanother
anotherasset
assetor
oreconomic
economicitem
item
such
suchasasaastock,
stock,bond,
bond,commodity
commodityprice,
price,
interest
interestrate,
rate,or
orcurrency
currencyexchange
exchangerate
rate
——they
theycan
canexpose
exposecompanies
companiesto toconsiderable
considerable
risk
riskbecause
becauseititcan
canbe
bedifficult
difficultto
tofind
findaa
derivative
derivativethat
thatentirely
entirelyhedges
hedgesthe therisks
risksor
or
because
becausethetheparties
partiestotothe
thederivative
derivativecontract
contract
fail
failto
tounderstand
understandthe therisk
riskexposures
exposures
Definitions
Futures
Futurescontract—an
contract—anagreement
agreementbetween
betweentwotwoorormore
moreparties
partiestoto
purchase
purchaseororsell
sellaacertain
certaincommodity
commodityor orfinancial
financialasset
assetat
ataafuture
futuredate
date
(called
(calledsettlement
settlementdate)
date)and
andat
ataadefinite
definiteprice.
price.
Swap
Swapcontract—an
contract—anagreement
agreementbetweenbetweentwotwoorormore
moreparties
partiesto
to
exchange
exchangefuture
futurecash
cashflows.
flows.ItItisiscommon
commonfor forhedging
hedgingrisks,
risks,especially
especially
interest
interestrate
rateand
andforeign
foreigncurrency
currencyrisks.
risks.
Option
Optioncontract—grants
contract—grantsaapartypartythe
theright,
right,not
notthe
theobligation,
obligation,to
toexecute
execute
aatransaction.
transaction.AAcall
calloption
optionisisaaright
rightto
tobuy
buyaasecurity
security(or
(orcommodity)
commodity)at at
aaspecific
specificprice
priceon
onororbefore
beforethethesettlement
settlementdate.
date.AAput
putoption
optionisisan
an
option
optionto
tosell
sellaasecurity
security(or
(orcommodity)
commodity)at ataaspecific
specificprice
priceon
onor
orbefore
before
the
thesettlement
settlementdate.
date.
5-37
Qualitative Disclosures
Disclosures generally outline the
types of hedging activities
conducted by the company
and the accounting methods
employed.
Quantitative Disclosures
Campbell Soup provides
quantitative information relating to
its interest rate and foreign
exchange hedging activities in the
MD&A section of the annual report.
These disclosures are provided in
Exhibit 5.8.
Analysis of Derivatives
• Identify Objectives for Using Derivatives
• Risk Exposure and Effectiveness of Hedging
Strategies
• Transaction Specific versus Companywide Risk
Exposure
• Inclusion in Operating or Nonoperating Income
The Fair Value Option
Fair Value Reporting Requirements
Eligible assets and liabilities - Reporting Requirements
investments in debt and equity 1. Carrying amount of the asset (or
securities, financial instruments, liability) in the balance sheet will
derivatives, and various financial always be at its fair value on the
obligations. measurement date.
Not allowed: investment in 2. All changes in the fair value of the
subsidiaries that need to be asset (or liability), including unrealized
consolidated, postretirement benefit gain and losses, will be included in net
assets and obligations, lease assets/ income.
obligations, certain types of insurance
3. Can choose to report the unrealized
contracts, loan commitments; equity
method investments under certain gain/loss portion differently from cash
conditions. flow components or together.
Selective Application
Substantial flexibility exists to selectively
apply the fair value option to individual
assets or liabilities.
The Fair Value Option
Analysis Implications
• Reliability of fair value measurements
• Opportunistic adoption of SFAS 159
– SFAS 159 allows considerable discretion to companies in
choosing the specific assets or liabilities for which they
exercise the fair value option.
– An analyst needs to verify whether the fair value election has
been opportunistic with an aim to window dressing the financial
statements.
Income Measurement
Concepts of Income
Economic
Economic Income
Income
Equals
Equalsnet
netcash
cashflows
flows++the
thechange
changeininthe
thepresent
presentvalue
valueofof
future
futurecash
cashflows
flows
Includes
Includesboth
bothrecurring
recurringandandnonrecurring
nonrecurringcomponents—
components—
rendering
renderingititless
lessuseful
usefulfor
forforecasting
forecastingfuture
futureearnings
earningspotential
potential
Permanent
Permanent IncomeIncome
Also
Alsocalled
calledsustainable
sustainableearning
earningpower,
power,ororsustainable
sustainableoror
normalized
normalizedearnings
earnings
Estimate
Estimateof ofstable
stableaverage
averageincome
incomethat
thataacompany
companyis isexpected
expected
to
toearn
earnover
overits
itslife
life
Reflects
Reflectsaalong-term
long-termfocus
focus
Directly
Directlyproportional
proportionalto tocompany
companyvalue
value
Income Measurement
Concepts
 Based
Basedon
onaccrual
accrualaccounting
accounting
 Suffers
Suffersfrom
frommeasurement
measurementerror,
error,arising
arisingbecause
becauseof
ofaccounting
accounting
distortions
distortions
Accounting
Accounting Income
Income consists
consists of:
of:
Permanent
PermanentComponent--the
Component--therecurring
recurringcomponent
component expected
expectedto
to
persist
persistindefinitely
indefinitely
Transitory
TransitoryComponent--the
Component--thetransitory
transitory(or
(ornon-recurring)
non-recurring)
component
componentnot notexpected
expectedto
topersist
persist(Note:
(Note:The
Theconcept
conceptofof
economic
economicincome
incomeincludes
includesboth
bothpermanent
permanentandandtransitory
transitory
components.)
components.)
Value
ValueIrrelevant
IrrelevantComponent--value
Component--valueirrelevant
irrelevantcomponents
componentshave
have
no
noeconomic
economiccontent;
content;they
theyare
areaccounting
accountingdistortions
distortions
Income Measurement
Measurement
Two main components of accounting income:
Revenues (gains)
Expenses (losses)
Income Measurement
Measurement
Revenues and Gains
• Revenues are earned inflows or prospective

inflows of cash from operations*
• Gains are recognized inflows or prospective
inflows of cash from non-operations**
* Revenues are expected to

recur
**Gains are non-recurring
Income Measurement
Measurement
Expenses and Losses
• Expenses are incurred outflows, prospective

outflows, or allocations of past outflows of cash
from operations
• Losses are decreases in a company’s
net assets arising from
non-operations
Expenses and losses are resources consumed, spent,

or lost in pursuing revenues and gains
Income Measurement
Alternatives
Two major income dimensions:
1. operating versus non-operating

2. recurring versus non-recurring*
*Motivated by need to separate permanent and

transitory components
Income Measurement
Alternatives
Alternative Income Statement Measures
• Net income—widely regarded as “bottom line” measure of

income
• Comprehensive income--includes most changes to equity that
result from non-owner sources; it is actually the bottom line
measure of income; is the accountant’s proxy for economic income
• Continuing income--excludes extraordinary items, cumulative
effects of accounting changes, and the effects of discontinued
operations from net income*
• Core income--excludes all non-recurring items from net income
*Often erroneously referred to as “operating income”

Income Measurement
Analysis
Operating
Operatingversus
versusNon-Operating
Non-OperatingIncome
Income
Operating
Operatingincome--measure
income--measureof
ofcompany
companyincome
incomeas
asgenerated
generatedfrom
from
operating
operatingactivities
activities
Three
Threeimportant
importantaspects
aspectsofofoperating
operatingincome
income
Pertains
Pertainsonly
onlyto
toincome
incomegenerated
generatedfrom
fromoperations
operations
Focuses
Focuseson onincome
incomeforforthe
thecompany,
company,notnotsimply
simplyfor forequity
equityholders
holders
(means
(meansfinancing
financingrevenues
revenuesand
andexpenses
expensesare areexcluded)
excluded)
Pertains
Pertains only to ongoing business activities (i.e.,results
only to ongoing business activities (i.e., resultsfrom
from
discontinued
discontinuedoperations
operationsis isexcluded)
excluded)
Non-operating
Non-operatingincome--includes
income--includesall
allcomponents
componentsof
ofnet
netincome
income
excluded
excludedfrom
fromoperating
operatingincome
income
Useful
Usefulto
toseparate
separatenon-operating
non-operatingcomponents
componentspertaining
pertainingto
tofinancing
financingand
and
investing
investing
Income Measurement
Analysis
Determination
Determinationof
ofComprehensive
ComprehensiveIncome—sample
Income—samplecompany
company
Net income
Other comprehensive income:
+/- Unrealized holding gain or loss on marketable securities
+/- Foreign currency translation adjustment
+/- Postretirement benefits adjustment
+/- Unrealized holding gain or loss on derivative instruments
Comprehensive income
Non-Recurring Items
 Extraordinary items
 Discontinued segments
 Accounting changes
 Restructuring charges
 Special items
Non-Recurring Items
Extraordinary Items
Criteria
Criteria
Unusual
Unusualininnature
nature
Infrequent
Infrequentin
inoccurrence
occurrence
Examples
Examples
Uninsured
Uninsuredlosses
lossesfrom
fromaamajor
majorcasualty
casualty(earthquake,hurricane,
(earthquake,hurricane,
tornado),
tornado),losses
lossesfrom
fromexpropriation,
expropriation,and
andgains
gainsand
andlosses
lossesfrom
from
early
earlyretirement
retirementofofdebt
debt
Disclosure
Disclosure & & Accounting
Accounting
Classified
Classifiedseparately
separatelyin
inincome
incomestatement
statement
Excluded
Excludedwhen
whencomputing
computingpermanent
permanentincome
income
Included
Includedwhen
whencomputing
computingeconomic
economicincome
income
Non-Recurring Items
Discontinued Operations
Accounting
Accounting is
is two-fold:
two-fold:
•• Income
Incomestatements
statementsfor forthe
thecurrent
current and
andprior
prior two
two
years
yearsare
arerestated
restatedafter
afterexcluding
excludingthetheeffects
effectsofof
discontinued
operations
•• Gains
Gainsor
or losses
lossesfrom
from the
thediscontinued
operationsare
are
reported
reportedseparately,
separately, net
net of
of tax*
tax*
*Reported
*Reportedinintwo
twocategories:
categories: (i)
(i) operating
operatingincome
incomeor
or
loss
lossfrom
fromdiscontinued
operationsuntil
until the
the
measurement
measurementdate,
date, and
and(ii)
(ii) gains
gainsand
andlosses
losseson on
disposal
disposal
Non-Recurring Items
Discontinued Operations
For
For analysis
analysis of of discontinued
discontinued operations:
operations:
•• Adjust
Adjustcurrent
currentand
andpast
pastincome
incometo toremove
removeeffects
effectsof
of
discontinued
operations
 Companies
Companiesdisclose
disclosethis
thisinfo
infofor
forthe
thecurrent
currentand
andpast
pasttwo
two
years
years
 For
Forearlier
earlieryears:
years:
 Look
Lookfor
forrestated
restatedsummary
summaryinfo infoor
orother
othervoluntary
voluntary
disclosures
disclosures
 Take
Takecare
carewhen
whendoing
doinginter-temporal
inter-temporalanalysis
analysis
•• Adjust
Adjustassets
assetsand
andliabilities
liabilitiesto
toremove
removediscontinued
operations
•• Retain
Retaincumulative
cumulativegain
gainororloss
lossfrom
fromdiscontinued
operationsin
in
equity
equity
Non-Recurring Items
Accounting Changes
First Type of Accounting Change is
Accounting Principle Change—involves
switch from one principle to another
Disclosure includes:
• Nature of and justification for change
• Effect of change on current income and
earnings per share
• Cumulative effects of retroactive
application of change on income and EPS
for income statement years
Non-Recurring Items
Accounting Changes
Second Type of Accounting Change is
Accounting Estimate Change—
involves change in estimate
underlying accounting
• Prospective application—a change

is accounted for in current and
future periods
• Disclose effects on current income
and EPS
Non-Recurring Items
Accounting Changes
Analyzing Accounting Changes
• Are cosmetic and yield no cash flows
• Can better reflect economic reality
• Can reflect earnings management (or even
manipulation)
• Impact comparative analysis (apples-to-apples)
• Affect both economic and permanent income
 For permanent income, use the new
method and ignore the cumulative effect
 For economic income, evaluate the
change to assess whether it reflects
reality
Non-Recurring Items
Special Items
Special
Special Items--transactions
Items--transactionsand
andevents
eventsthat
thatare
areunusual
unusualor
or
infrequent
infrequent
Challenges
Challengesfor
foranalysis
analysis

 Often
Oftenlittle
littleGAAP
GAAPguidance
guidance

 Economic
Economicimplications
implicationsare
arecomplex
complex

 Discretionary
Discretionarynature
natureserves
servesearnings
earningsmanagement
managementaims
aims
Two
Twomajor
majortypes
types

 Asset
Assetimpairments
impairments(write-offs)
(write-offs)

 Restructuring
Restructuringcharges
charges
Non-Recurring Items
Special Items
Asset
AssetImpairment—when
Impairment—whenasset
assetfair
fairvalue
valueisisbelow
belowcarrying
carrying(book)
(book)value
value
Some
Somereasons
reasonsforforimpairments
impairments
Decline
Declinein
indemand
demandforforasset
assetoutput
output
Technological
Technologicalobsolescence
obsolescence
Changes
Changesin incompany
companystrategy
strategy
Accounting
Accountingforforimpairments
impairments
Report
Reportatatthe
thelower
lowerof
ofmarket
marketororcost
cost
No
No disclosure about determinationof
disclosure about determination ofamount
amount
No
Nodisclosure
disclosureabout
aboutprobable
probableimpairments
impairments
Flexibility
Flexibilityinindetermining
determiningwhen
whenand
andhow
howmuch
muchto
towrite-off
write-off
No
Noplan
planrequired
requiredfor
forasset
assetdisposal
disposal
Conservative
Conservative presentation ofassets
presentation of assets
Non-Recurring Items
Special Items
Restructuring
RestructuringCharges—costs
Charges—costsusually
usuallyrelated
relatedto
tomajor
majorchanges
changesin
incompany
company
business
business
Examples
Examplesofofthese
thesemajor
majorchanges
changesinclude
include
Extensive
Extensivereorganization
reorganization
Divesting
Divestingbusiness
businessunits
units
Terminating
Terminating contractsand
contracts andjoint
jointventures
ventures
Discontinuing
Discontinuingproduct
productlines
lines
Worker
Workerretrenchment
retrenchment
Management
Managementturnover
turnover
Write-offs
Write-offs combinedwith
combined withinvestments
investmentsin inassets,
assets,technology
technologyor
ormanpower
manpower
Accounting
Accountingfor
forestimated
estimatedcosts
costsof ofrestructuring
restructuringprogram
program
Establish a provision (liability) for estimated costs
Establish a provision (liability) for estimated costs
Charge
Chargeestimated
estimatedcosts
coststotocurrent
currentincome
income
Actual
Actualcosts
costsinvolve
involveadjustments
adjustmentsagainst
againstthe
theprovision
provisionwhen
whenincurred
incurred
Non-Recurring Items
Analyzing Special Items
Earnings Management with Special Charges
(1) Special charges often garner less investor

attention under an assumption they are non-recurring
and do not persist
(2) Managers motivated to re-classify operating

charges as special one-time charges
(3) When analysts ignore such re-classified charges

it leads to low operating expense estimates and
overestimates of company value
Non-Recurring Items
Income Statement Adjustments
(1) Permanent income reflect profitability of a company

under normal circumstances
• Most special charges constitute operating expenses
that need to be reflected in permanent income
• Special charges often reflect either understatements
of past expenses or investments for future profitability
(2) Economic income reflects the effects on equity of all

events that occur in the period
• Entire amount of special charges is included
Non-Recurring Items
Balance Sheet Adjustments

Balance sheets after special charges often better reflect
business reality by reporting assets closer to net realizable
values
Two points of attention

(1) Retain provision or net against equity?
• If a going-concern analysis, then retain
• If a liquidating value analysis, then offset against equity
(2) Asset write-offs conservatively distort asset and liability

values
Revenue Recognition
Guidelines
Revenue
Revenue Recognition
Recognition Criteria
Criteria
 Earning
Earningactivities
activitiesare
aresubstantially
substantiallycomplete
completeandandnonosignificant
significant
added
addedeffort
effortisisnecessary
necessary
 Risk
Riskof
ofownership
ownershipis iseffectively
effectivelypassed
passedtotothe
thebuyer
buyer
 Revenue,
Revenue,andandrelated
relatedexpense,
expense,are
aremeasured
measuredor orestimated
estimatedwith
with
accuracy
accuracy
 Revenue
Revenuerecognized
recognizednormally
normally
yields
yieldsan
anincrease
increasein incash,
cash,
receivables
receivablesor orsecurities
securities
 Revenue
Revenuetransactions
transactionsare areat
atarm’s
arm’s
length
lengthwith
withindependent
independentparties
parties
 Transaction
Transactionis isnot
notsubject
subjecttotorevocation
revocation
Revenue Recognition
Guidelines
Some
Somespecial
specialrevenue
revenuerecognition
recognitionsituations
situationsare
are
 Revenue
RevenueWhen
WhenRight
Rightof
ofReturn
ReturnExists
Exists
 Franchise
FranchiseRevenues
Revenues
 Product
ProductFinancing
FinancingArrangements
Arrangements
 Revenue
Revenueunder
underContracts
Contracts
 Percentage-of-completion
Percentage-of-completionmethod
method
 Completed-contract
Completed-contractmethod
method
 Unearned
UnearnedRevenue
Revenue(amount
(amountofofrevenues
revenuesthat
thatare
arestill
still
unrecognized
unrecognizedappear
appearin
inthe
thebalance
balancesheet
sheetas
asaaliability)
liability)
Revenue Recognition
Analysis
Revenue
Revenueis isimportant
importantfor
for
 Company
Companyvaluation
valuation
 Accounting-based
Accounting-basedcontractual
contractualagreements
agreements
 Management
Managementpressure
pressureto
toachieve
achieveincome
incomeexpectations
expectations
 Management
Managementcompensation
compensationlinked
linkedto
toincome
income
 Valuation
Valuationof
ofstock
stockoptions
options
Analysis
Analysismust
mustassess
assesswhether
whetherrevenue
revenuereflects
reflectsbusiness
businessreality
reality
 Assess
Assessrisk
riskof
oftransactions
transactions
 Assess
Assessrisk
riskof
ofcollectibility
collectibility
Circumstances
Circumstancesfueling
fuelingquestions
questionsabout
aboutrevenue
revenuerecognition
recognitioninclude
include
 Sale
Saleof
ofassets
assetsororoperations
operationsnotnotproducing
producingcash
cashflows
flowsto
tofund
fundinterest
interest
or
ordividends
dividends
 Lack
Lackofofequity
equitycapital
capital
 Existence
Existenceofofcontingent
contingentliabilities
liabilities
Deferred Charges
Costs
Costs incurred
incurred but
but deferred
deferred because
because they
they are
are
expected
expected to
to benefit
benefit future
future periods
periods
Consider
Consider four
four categories
categories of
of deferred
deferred costs
costs
•• Research
Research and
and development
development
•• Computer
Computer software
software costs
costs
•• Costs
Costs in
in extractive
extractive industries
industries
•• Miscellaneous
Miscellaneous (Other)
(Other)
Deferred Charges
Research and Development
Accounting for R&D is problematic due to:*
• High uncertainty of any potential benefits

• Time period between R&D activities and determination of success
• Intangible nature of most R&D activities
• Difficulty in estimating future benefit periods
Hence:
• U.S. accounting requires expensing R&D when incurred
• Only costs of materials, equipment, and facilities with alternative
future uses are capitalized as tangible assets
• Intangibles purchased from others for R&D activities with alternative
future uses are capitalized
*These accounting problems are similar to those encountered with

employee training programs, product promotions, and advertising
Deferred Charges
Computer Software Costs
[Note:
[Note:Accounting
Accountingfor forcosts
costsof
of computer
computer software
softwaretotobe
be
sold,
sold, leased,
leased, or
orotherwise
otherwisemarketed
marketedidentifies
identifiesaapoint
point
referred
referredto
toas
astechnological
technological feasibility]
feasibility]
Prior
Priorto
totechnological
technological
feasibility,
feasibility, costs
costs
are
areexpensed
expensedwhenwhen
incurred
incurred
After
Aftertechnological
technological feasibility,
feasibility, costs
costsare
arecapitalized
capitalizedas
as
an
anintangible
intangibleasset
asset
Deferred Charges
Costs in Extractive Industries
Search
Searchand
anddevelopment
developmentcosts
costsfor
fornatural
naturalresources
resourcesisisimportant
importantto
to
extractive industries including oil, gas, metals, coal, and nonmetallic
extractive industries including oil, gas, metals, coal, and nonmetallic
minerals
minerals
Two
Twobasic
basicaccounting
accountingviewpoints:
viewpoints:
•• “Full
“Full‑cost”
‑cost”view—all
view—allcosts,
costs,
productive and nonproductive,
productive and nonproductive,
incurred
incurredininthe
thesearch
searchfor
forresources
resources
are
arecapitalized
capitalizedand
andamortized
amortizedtoto
income
incomeas asresources
resourcesare
areproduced
produced
and
andsold
sold
•• “Successful
“Successfulefforts”
efforts”view—all
view—allcosts
coststhat
thatdo
donot
notresult
resultdirectly
directlyin
in
discovery
discoveryof
ofresources
resourceshave
havenonofuture
futurebenefit
benefitand
andshould
shouldbe
be
expensed
expensedas
asincurred.
incurred.Prescribed
Prescribedfor
foroil
oiland
andgas
gasproducing
producing
companies
companies
Employee Benefits
Overview
 Increase in employee benefits supplementary to salaries and

wages
 Some supplementary benefits are not accorded full or timely
recognition:
• Compensated absences
• Deferred compensation contracts
• Stock appreciation rights (SARs)
• Junior stock plans
• Employee Stock Options (ESOs)
Employee Benefits
Employee Stock Options
ESOs are a popular form of
incentive compensation
—reasons include:
 Enhanced employee performance

 Align employee and company incentives
 Viewed as means to riches
 Tool to attract talented and enterprising workers
 Do not have direct cash flow effects
 Do not require the recording of costs
Employee Benefits
Option Facts
• Option to purchase shares at a specific price on or after a future
date
• Exercise price is the price a holder has the right to purchase
shares at
• Exercise price often set equal to
stock price on grant date
• Vesting date is the earliest date
the employee can exercise
option
• In-the-Money: When stock
price is higher than exercise
price
• Out-of-the-Money: When stock price
is less than exercise price
Employee Benefits
Two main accounting issues

• Determining Dilution of earnings per share (EPS)
 ESOs in-the-money are dilutive securities and affect diluted
EPS
 ESOs out-of-the-money are antidilutive securities and do not
affect diluted EPS
• Determining Compensation expense
 Determine cost of ESOs granted
 Amortize cost over vesting period
Interest Costs
Interest Defined
Interest
Compensation for use of money
Excess cash paid beyond the money (principal)
borrowed
Interest rate
Determined by risk characteristics of borrower
Interest expense
Determined by interest rate, principal, and time
Interest Costs
Interest Analysis
• Interest on convertible debt is controversial by

ignoring the cost of conversion privilege
• Diluted earnings per share uses number of shares
issuable in event of conversion of convertible debt
• Analysts view interest as a period cost—not
capitalizable
• Changes in a company borrowing rate, not explained
by market trends, reveal changes in risk
Income Taxes

Temporary Income Tax Differences
GAAP
GAAP
GAAP
GAAP
Financial
Taxable Income
Statement Income
 Differences
Differencesthat
that are
aretemporary
temporaryin innature
nature
 expected
expectedto toreverse
reverseininthe
thefuture
future
 mainly
mainlyininthe
thenature
natureofof timing
timingdifferences
differencesbetween
betweentax
tax
and
andGAAP
GAAPaccounting
accounting
 accounted
accountedfor for using
usingdeferred
deferredtaxtax adjustments
adjustments
Income Taxes
Income Tax Accounting
•• Identify
Identifytypes
typesand
andamounts
amountsof
oftemporary
temporarydifferences
differencesand
andthe
the
nature
natureand
andamount
amountof ofeach
eachtype
typeofofoperating
operatingloss
lossand
andtax
taxcredit
credit
carryforward
carryforward
•• Measure
Measuretotal
totaldeferred
deferredtax
taxliability
liabilityfor
fortaxable
taxabletemporary
temporary
differences
differences
•• Compute
Computetotal
totaldeferred
deferredtaxtaxasset
assetfor
fordeductible
deductibletemporary
temporary
differences
differencesand
andoperating
operatingloss
losscarryforwards
carryforwards
•• Measure
Measuredeferred
deferredtax
taxassets
assetsfor foreach
eachtype
typeof
oftax
taxcredit
credit
carryforward
carryforward
•• Reduce
Reducedeferred
deferredtax
taxassets
assetsby byaavaluation
valuationallowance
allowance
Income Taxes
Income Tax Analysis
 Financial Statement Adjustments
 Present Valuing Deferred Tax Assets and
Liabilities
 Forecasting Future Income and Cash Flows
 Analyzing Permanent and Temporary
Differences
 Earnings Management and Earnings Quality
LAPORAN KEUANGAN


Ujian Tengah Semester (UTS).

Mampu melakukan analisis pada aktifitas-aktifits materi 1-7.

Ujian Tengah Semester (UTS).


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3 Penutup : 15 menit 1,2,3,4`

Media : Kertas soal
- Tugas : 20%
Tugas / Ujian
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ANALISA LAPORAN KEUANGAN

Standar Kompetensi (CPMK)

Kompetensi Dasar (Sub CPMK)

Indikator Pencapaian Kompetensi Dasar (Indikator)

Materi Pembelajaran (Bahan Ajar)

Bentuk dan Metode Pembelajaran (BP dan MP)

No. Kegiatan Pembelajaran Waktu Referensi

Sarana dan Penilaian Pembelajaran

Standar Kompetensi (CPMK)

Kompetensi Dasar (Sub CPMK)

Indikator Pencapaian Kompetensi Dasar (Indikator)

Materi Pembelajaran (Bahan Ajar)

Bentuk dan Metode Pembelajaran (BP dan MP)

No. Kegiatan Pembelajaran Waktu Referensi

Sarana dan Penilaian Pembelajaran

Accounting for Debt Securities

Note: Generally used for investments representing

Current liabilities 300,000

• enhance company image and growth potential

• Purchase method of accounting

• Revenues are earned inflows or prospective

* Revenues are expected to

• Expenses are incurred outflows, prospective

Expenses and losses are resources consumed, spent,

1. operating versus non-operating

*Motivated by need to separate permanent and

• Net income—widely regarded as “bottom line” measure of

*Often erroneously referred to as “operating income”

• Prospective application—a change

Earnings Management with Special Charges

(1) Special charges often garner less investor

(2) Managers motivated to re-classify operating

(3) When analysts ignore such re-classified charges

Income Statement Adjustments

(1) Permanent income reflect profitability of a company

(2) Economic income reflects the effects on equity of all

Balance Sheet Adjustments

Two points of attention

(2) Asset write-offs conservatively distort asset and liability

• High uncertainty of any potential benefits

*These accounting problems are similar to those encountered with

 Increase in employee benefits supplementary to salaries and

 Enhanced employee performance

Two main accounting issues

• Interest on convertible debt is controversial by

Standar Kompetensi (CPMK)

Kompetensi Dasar (Sub CPMK)

Indikator Pencapaian Kompetensi Dasar (Indikator)

Materi Pembelajaran (Bahan Ajar)

Bentuk dan Metode Pembelajaran (BP dan MP)

No. Kegiatan Pembelajaran Waktu Referensi

Sarana dan Penilaian Pembelajaran

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