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In this Balance Sheet Tour, we review several “less travelled”, yet very important, balance sheet categories, including some terms that you have heard about, but might not quite know how they work. This course goes above and beyond what textbooks would provide you, by addressing concepts, definitions, and journal entries, as well as practical use. Many of the course sections feature multiple real-life examples of well-known companies, both illustrating the terms and relating the financial terms to a company’s business model and “financial footprint”.

The balance sheet, or statement of financial position, is an overview of what a company owns and owes at a point in time. Some areas of the balance sheet get a lot of attention in business discussions, especially when they relate strongly to the company’s cash flow performance. There are other areas on the balance sheet that are less explored territory. These should become common terms that every finance professional has a thorough understanding of! After taking the Balance Sheet Tour, terms like capital expenditures (CapEx), goodwill, intangibles, accruals, pre-paids and deferrals will make sense to you. Also covered are: prepaid expenses, accumulated depreciation, intangible assets, deferred tax assets, deferred tax liabilities, deferred revenue, retained earnings, treasury stock

Philip de Vroe, The Finance Storyteller, is your guide on this insightful tour of the balance sheet.

Learning Objectives

  • Explore balance sheet terminology such as capital expenditures (CapEx), goodwill, intangibles, accruals, prepaid expenses and deferrals
  • Identify Capital Expenditures (CapEx) and Operating Expenditures (OpEx)
  • Discover how deferred tax assets and deferred tax liabilities work
  • Discover how goodwill and intangible assets are created
  • Recognize how treasury stock and retained earnings impact equity
Last updated/reviewed: March 02, 2018

4 Reviews (16 ratings)Reviews

5
Member's Profile
Well-organized and clear. Anyone teaching tax and/or financial accounting would benefit.
3
Member's Profile
I think the class crammed too much into one course. For a basic class, some of the items in the class may be too advanced. Perhaps the class can be broken up into 3 classes; assets, liabilities and equity.
5
Member's Profile
Amazing Presentation and I liked the real life examples, very few are able to give most recent real life examples...
5
Member's Profile
This course has a very brief but very thorough description of all main BS accounts.

Prerequisites

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

2 QuestionsCourse Questions and Answers

User picture

What is the date that this class was published? Is goodwill still not amortized under GAAP? Is it amortized under IFRS?

Member's Profile

We published the "Balance Sheet Tour" on the illumeo site in March 2018, and the goodwill video that is part of it was researched and written in March 2017.

Under US GAAP and IFRS, goodwill is never amortized. Instead, management is responsible for valuing goodwill every year and to determine if an impairment is required. If the fair market value goes below historical cost, an impairment must be recorded to bring it down to its fair market value. See FASB statement 142 (issued in June 2001).

I do remember the days when goodwill was amortized over a period of maximum 40 years, back when I joined a large multinational company in the 90s. When the rules changed from yearly amortization of goodwill to annual impairment test (US GAAP 2001, IFRS 2005), companies that had done or were planning to do acquisitions involving significant goodwill were (obviously) relieved as that was no longer a drag on earnings. Goodwill impairments (if they occur) are generally represented as one-off, recurring, non-cash write-offs. Still painful, but "framed" as an unusual item.

Please note that other intangible assets that occur during an acquisition (trade names, etc., see the intangible assets video) are subject to amortization over the useful life of the assets. However, if companies focus mostly on EBITDA, then that amortization charge is outside their main performance metric.

Course Syllabus
INTRODUCTION AND OVERVIEW
  4:38Prepaid Expenses
  6:54Capital Expenditures versus Operating Expenditures
  1:58Accumulated Depreciation
  8:47What is "Goodwill"?
  5:45Intangible Assets
  4:39Deferred Tax Assets
  5:37Deferred Tax Liabilities
  4:22Deferred Revenue
  8:28Accruals
  5:50Retained Earnings
  5:27Treasury Stock and Share Buyback Accounting
CONTINUOUS PLAY
  1:02:24Balance Sheet Tour
SUPPORTING MATERIALS
  PDFSlides: Balance Sheet Tour
  PDFBalance Sheet Tour Glossary/Index
REVIEW AND TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM