This course 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.

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.
Last updated/reviewed: March 22, 2024

Included In Certifications

This course is included in the following Certification Programs:

9 CoursesFinancial Reporting and Analysis Certification

  1. Introduction to the Financial Statements and the Environment of Financial Reporting
  2. Preparing Financial Statements
  3. Reading and Analyzing Financial Statements
  4. Time Value of Money - Concepts and Applications
  5. Classification, Debt and Equity
  6. Current Assets and Asset Valuation
  7. Equity Investments and Long-lived Assets
  8. Earnings Management
  9. Ethics and Earnings Management
17 Reviews (106 ratings)

Reviews

5
Member's Profile
This course was had some clear explanations. It also provided pdf notes that can be easily reviewed to reinforce understanding of the material. Real world examples of companies drive home the importance of understanding the effects of equity and debt financing on financial statements
3
Anonymous Author
The course was more of a review of fundamentals. I was looking for more training on the differences between debt and equity, as there are subtle differences. Derivatives and BCF blur the line between debt and equity classification.
5
Anonymous Author
This was by far the best Illumeo course I have taken. The presentation, combined with the handouts, are highly understandable, and interesting. Jamie is a great instructor.
5
Anonymous Author
This was a thorough course and a good overview of leases and calculations related to lease payments, which are especially important in today's world of leases.
3
Anonymous Author
A good revisit of some basics. I appreciated some of the deep dives (I.e. effective interest method). The instructor had a good pace and was very clear
2
Anonymous Author
Tough course. Slides were not ideal and if you are not working with these concepts on a regular basis it's hard to grasp these concepts
5
Anonymous Author
Very good refresher. The slides go over the actual debt and credits to the actual placement in the financial statements.
5
Anonymous Author
I prefer a 'textbook' style PDF to study from, whereas this was just slides and a glossary. Otherwise it was fine.
5
Member's Profile
This one was really hard, but good overview and refresher of all the fun financing things we learned in school.
5
Anonymous Author
Very in depth coverage. Useful and important for cash flow and company operating cash information
4
Anonymous Author
Thoughts were organized well, but information was outdated, especially with lease guidance.
4
Member's Profile
Some of the questions were worded very poorly, but the course was instructive and clear.
5
Anonymous Author
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5
Anonymous Author
Good refresher on a variety of topics. It was good to get exposure to these topics.
4
Anonymous Author
Good course. Informative. Some of the definitions were a little strange to me.
5
Anonymous Author
The course was presented in a clear and concise manner for the subject matter.
5
Anonymous Author
Great topic that covers a lot of different areas of accounting.
show all reviews
Prerequisites
Course Complexity: Basic

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 .
Course Questions and Answers1 Question
There are no questions.         Answers to Frequently Asked Questions (FAQs)
Member's Profile
Keith Hermann
(Senior Accountant at Charter Communications) | May 18, 2022
Instructor for this course
  Course Overview CPE
Course Syllabus
INTRODUCTION AND OVERVIEW
  Key Measurement Issues and the Current Classification15:42
  Introduction to Liabilities and Contingencies29:20
  Accounting for Bond Issuances15:11
  Accounting for Bond Liabilities18:28
  Bond Investments23:20
  Accounting for Leases (lessees)22:44
  Shareholders' Equity18:24
  Stock Options, Stock Dividends and Stock Splits17:29
CONTINUOUS PLAY
  Classification, Debt and Equity2:40:38
SUPPORTING MATERIAL
  Slides: Classification, Debt and EquityPDF
  Classification, Debt and Equity Glossary/ IndexPDF
REVIEW AND TEST
 REVIEW QUESTIONSexam
 FINAL EXAMexam