Course 5 - Classification, Debt and Equity (Video) (Course Id 1898)

• Who is this course for?
  This course is intended for CPAs and accounting professionals seeking Continuing Professional Education (CPE) who want to understand how debt and equity are classified and reported on financial statements.

• What is this course about or what problem does this course solve?
  The course explores financial classification principles and the accounting treatment of debt and equity financing, including bonds, leases, and shareholder equity, with real-world financial statement examples.

• How can the knowledge from this course be used?
  Learners can apply this knowledge to accurately classify liabilities and equity, account for bonds using the effective interest method, and understand how financing decisions impact financial reporting.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  Understanding the classification and treatment of debt and equity is essential for producing accurate financial statements and for evaluating a company’s financial structure and risk.

• When is this course relevant or timely?
  This course is highly relevant during financial reporting cycles or when advising clients on financing options and compliance with U.S. GAAP or IFRS standards.

• How is a course like this consumed or used?
  Delivered as a NASBA QAS self-study video course with six video segments, it includes 12 review questions and 20 final exam questions, awarding 4.0 CPE credits upon passing with a score of 70%.

This course is #5 in the 8-course series on Financial Reporting and Analysis offered by PRATTedu.  It is comprised of 6 videos, begins by discussing the concept of classification and its important role on the financial statements, and then moves into coverage of the company’s two primary forms of financing: debt and equity.  The financial statements and the footnotes of the companies featured in this course include General Motors, Volkswagen (an IFRS user), Amazon, Home Depot and Panera.

Video - NASBA QAS - Text - NASBA Registry - 1898

Course Learning Objectives

• Describe the key measurement issues addressed by the financial statements and explain how the current classification is used.
• Define the concept of a contingent liability and explain how contingencies are accounted for.
• Define what a bond is and explain how bond issuances are accounted for using the effective interest method.
• Explain how the effective interest method is used to account for bond investments and describe how management’s intention determines how changes in bond market values are accounted for.
• Describe the difference between short-term and long-term (financing and operating) leases and how both kinds of leases are reflected on the financial statements of the lessee.
• Summarize the shareholders’ equity section of the balance sheet and describe the transactions leading to each line item within that section

Chapter 1 - Classification, Debt and Equity - Section 1

Chapter 1 - Section 1 Review Questions

Chapter 1 - Classification, Debt and Equity - Section 2

Chapter 1 - Section 2 Review Questions

Chapter 1 - Classification, Debt and Equity - Section 3

Chapter 1 - Section 3 Review Questions

Chapter 1 - Classification, Debt and Equity - Section 4

Chapter 1 - Section 4 Review Questions

Chapter 1 - Classification, Debt and Equity - Section 5

Chapter 1 - Section 5 Review Questions

Chapter 1 - Classification, Debt and Equity - Section 6

Chapter 1 - Section 6 Review Questions

Glossary