Ersetzte Standards WICHTIGER HINWEIS Die nachfolgenden Standards werden durch das FASB Accounting Standards Codification Topic 105, allgemein anerkannte Rechnungslegungsgrundsätze, ersetzt. Statements of Financial Accounting Standards FASB Interpretations FASB Staff Position FASB Technical Bulletins EITF Abstracts Derivate (SFAS 133) Implementierungssaspekte AICPA urheberrechtlich geschützter Standards Sie verwenden müssen Adobereg Acrobatreg Readerreg VERSION 5.0 oder höher UNTER Den vollen Wortlaut der FASB Dokumente anzeigen. (Download Free Acrobat Reader) Hinweise zur Verwendung von FASB Pronouncements und EITF Abstracts Der Zugriff auf die Pronouncements und EITF Abstracts, wie auf dieser Website veröffentlicht, ist nur über die einzelnen Links erlaubt. Sie dürfen die Pronouncements oder EITF Abstracts nicht auf Ihrem Computer oder in einem beliebigen Archivsystem speichern. Wenn Sie einen Link zu den Pronouncements andor EITF Abstracts anbieten, dürfen Sie sich nicht mit den einzelnen Pronouncements oder EITF verknüpfen. AbstractsmdashYou muss mit dieser Seite verknüpfen, damit die Besucher die Voraussetzungen und Bedingungen für die Verwendung der Pronouncements und EITF Abstracts verstehen können Webseite. FASB Website Allgemeine Geschäftsbedingungen Copyright FASB Statements, Interpretationen, FASB-Mitarbeiterstellen, technische Bulletins und EITF Abstracts sind urheberrechtlich geschützt durch die Financial Accounting Foundation, 401 Merritt 7, Norwalk, Connecticut 06856. Alle Rechte vorbehalten. Die auf dieser Website verfügbaren FASB-Erklärungen, Interpretationen, FASB-Mitarbeiterstellen, technischen Bulletins und EITF-Abstracts dürfen nur für persönliche, nichtkommerzielle Zwecke verwendet werden. Kein Teil der auf dieser Website verfügbaren FASB-Statements, Interpretationen, FASB-Mitarbeiterstellen, technischen Bulletins und EITF-Abstracts darf in irgendeiner Form oder auf irgendeine Weise elektronisch, mechanisch, Fotokopien, Aufzeichnungen oder anderweitig, ohne vorherige schriftliche Zustimmung der Financial Accounting Foundation. Antrag Urheberrechtliche Erlaubnis anzeigen FASB Verlautbarungen veröffentlicht seit der Gründung im Jahr 1973 FASBs Statements of Financial Accounting Standards No. 159 Statement (Abgelöst) Die Fair Value Option für finanzielle Vermögenswerte und Finanz LiabilitiesmdashIncluding eine Änderung der FASB Statement No. 115 (Stand 0207) in geänderter Fassung Wie ausgegeben Zusammenfassung Status Statement Nr. 158 (ersetzt) Arbeitgeber Rechnungslegung für leistungsorientierte Pension und andere Nachsorge Plansmdashan Änderung der FASB Statements Nr. 87, 88, 106 und 132 (R) (Ausgabetag 0906) In der geänderten Form Zusammenfassung Status Statement Nr. 132 (überarbeitet 2003) (ersetzt) Arbeitgeber Angaben zu Pensionen und sonstigen Vorsorgeverpflichtungen mdashan Änderung der FASB-Statements Nr. 87, 88 und 106 (Ausgabetag 1203) in der jeweils geltenden Fassung Statut Nr. 147 (Erlöscht) Bestimmte Finanzinstitute mdashan Änderung der FASB-Erklärungen Nr. 72 und 144 und FASB-Interpretation Nr. 9 (Emissionstag 1002) In der Fassung des Auszugs Zusammenfassung Statuserklärung Nr. 140 (ersetzt) Bilanzierung von Transfers und Instandhaltung von finanziellen Vermögenswerten und Erlöschen von Verbindlichkeiten-a Ersatz von FASB Statement Nr 125 (Stand 900) als Nr für Derivative Instruments Accounting 137 (Abgelöst) in der Ausgabe Zusammenfassung Status Statement Geänderte und Absicherungs ActivitiesmdashDeferral am Tag des Inkrafttretens des FASB Statement Nr 133mdashan Änderung der FASB Statement No. 133 ( Ausgabetag 699) in der Fassung wie verausgabt Stand Statement No. 134 (Abgelöste) Bilanzierung von Mortgage-Backed Securities Rück nach der Verbriefung von Hypothekendarlehen zur Veräußerung gehalten durch eine Hypothekenbank Enterprisemdashan Änderung von FASB Statement Nr 65 (Stand 1098) As Geänderte Fassung des Statement-Nr. 132 (überarbeitet 2003) (ersetzt) Arbeitgeber Angaben zu Pensionen und anderen Vorsorgeleistungen mdashan Änderung der FASB-Erklärungen Nr. 87, 88 und 106 (Ausgabetag 1203) In der geänderten Fassung Zusammenfassung Statuserklärung Nr. 127 (Ersetzt) Aufschub des Inkrafttretens bestimmter Bestimmungen der FASB - Statement Nr. 125mdashan Änderung des FASB - Statements Nr. 125 (Ausgabetag 1296) Ausgestellt Zusammenfassung Statement - Nr. 120 (ersetzt) Bilanzierung und Berichterstattung von Gegenseitigkeitsversicherungsunternehmen und Versicherungsunternehmen für bestimmte Long-Duration Teilnehmende Contractsmdashan Änderung der FASB-Erklärungen 60, 97 und 113 und Interpretation Nr. 40 (Ausgabetag 195) In der geänderten Fassung der Zusammenfassung Statement-Nr. 118 (ersetzte) Rechnungslegung durch Kreditgeber für eine Wertminderung eines Darlehens - Income Anerkennung und Disclosuresmdashan Änderung der FASB Statement Nr 114 (Ausgabetag 1094) in der Fassung wie verausgabt Zusammenfassung Status Statement No. 108 (Abgelöst) Accounting for Income Taxes-Stundung am Tag des Inkrafttretens des FASB Statement Nr 96mdashan Änderung von FASB Statement Nr. 96 (Ausgabetag 1291) Wie ausgegeben Zusammenfassung Status Statement Nr. 105 (ersetzt) Offenlegung von Informationen über Finanzinstrumente mit außerbilanziellen Risiken und Finanzinstrumenten mit Kreditrisikokonzentration (Emissionstag 390) Nr. 104 (Ersetzt) Kapitalflussrechnung-Netto-Berichterstattung bestimmter Einzahlungen und Barzahlungen und Klassifizierung von Cashflows aus Sicherungsgeschäften mdashan Änderung des FASB-Statements Nr. 95 (Ausgabetag 1289) in der jeweils geltenden Fassung Statement No. 103 (Ersetzt) Bilanzierung von Ertragsteuern-Abgrenzung des Inkrafttretens des FASB-Statements Nr. 96mdashan Änderung des FASB-Statements Nr. 96 (Ausgabetag 1289) Ausgegeben Status Statement Nr. 102 (ersetzt) Kapitalflussrechnung - Freistellung bestimmter Unternehmen und Klassifizierung von Geldströmen aus bestimmten Wertpapieren, die für Resalemdashan erworben wurden Änderung des FASB-Statements Nr. 95 (Ausgabetag 289) In der jeweils gültigen Fassung des Statutes Nr. 100 (ersetzt) Bilanzierung von Ertragsteuern-Aufschub des Wirksamkeitszeitpunkts der FASB-Erklärung Nr. 96mdashan Änderung des FASB Statement Nr. 96 (Ausgabetag 1288) Ausgestellt Zusammenfassung Status Statement Nr. 99 (ersetzt) Aufschub des Inkrafttretens der Anerkennung von Abschreibungen durch gemeinnützige Organisationen mdashan Änderung des FASB Statement Nr. 93 ( Bilanzierung von Leasingverhältnissen: Sale-Leaseback-Transaktionen Einbeziehung von Immobilien, Verkaufstyp-Leasingverhältnissen, Definition der Leasinglaufzeit und Anfängliche direkte Kosten der Direktfinanzierung Leasesmdashan Änderung der FASB Statements Nr. 13, 66 und 91 sowie ein Rücktritt von FASB Statement Nr. 26 und Technical Bulletin Nr. 79-11 (Ausgabetag 588) in der jeweils gültigen Fassung des Statements Nr. 97 (ersetzt) Berichterstattung durch Versicherungsunternehmen für bestimmte Long-Duration-Verträge und für realisierte Gewinne und Verluste aus der Veräußerung von Anlagen (Ausgabetag 1287) In der jeweils gültigen Fassung des Konzernabschlusses Nr. 94 (ersetzte) Konsolidierung aller Mehrheitsbeteiligungen mdashan Änderung der ARB-Nr Nr. 91 (ersetzt) Rechnungslegung für nicht erstattungsfähige Gebühren und Kosten, die mit Ursprungseingang oder Erwerb von Darlehen assoziiert sind, mit den entsprechenden Änderungen von APB Opinion Nr. 18 und ARB Nr. 43, Kapitel 12 (Ausgabetag 1087) in der jeweils geltenden Fassung Und anfängliche direkte Kosten von Leasesmdashan Änderung der FASB-Statements Nr. 13, 60 und 65 sowie ein Rücktritt von FASB-Statement Nr. 17 (Ausgabetag 1286) in der jeweils geltenden Fassung des Statuts Nr. 90 (Wiedergutmachung) Absprüngen und Anrechnungsfaktoren für Pflanzen Costsmdashan Änderung des FASB Statement Nr 71 (Stand 1286) Wie für Siedlungen und Plankürzungen von leistungsorientierten Pensionsplänen wie verausgabt Zusammenfassung Status Statement No. 88 (Abgelöst) Die Arbeitgeber Accounting Geänderte und für Abfertigungen (Ausgabetag 1285 ) Erläuterung Nr. 85 (ersetzt) Ertragsbewertung zur Bestimmung, ob eine Wandelanleihe ein gemeinsamer Bestandteil ist Equivalentmdashan Änderungsantrag der APB-Stellungnahme Nr. 15 (Ausgabetag 385) Ausgegeben Statusbericht Nr. 83 (Ersetzt) Bezeichnung der AICPA - Richtlinien und Stellungnahmen zur Rechnungslegung von Maklern und Händlern in Wertpapieren, von Vorsorgeplänen für Arbeitnehmer und von Banken als bevorzugt für die Anwendung der Stellungnahme des APB 20 mdashan Änderungsantrag FASB - Erklärung Nr. 32 und APB - Stellungnahme Nr. 30 und ein Rücktritt von FASB-Interpretation Nr. 10 (Ausgabetag 385) Ausgegebene Zusammenfassung Statuserklärung Nr. 82 (ersetzt) Finanzberichterstattung und Preisänderung: Ausschluss bestimmter Angaben mdashan Änderung des FASB-Statements Nr. 33 (Ausgabetag 1184) 79 (ersetzt) Beseitigung bestimmter Angaben für Unternehmenszusammenschlüsse durch nicht öffentlich-rechtliche Unternehmen mdashan Änderungsantrag der APB Stellungnahme Nr. 16 (Ausgabetag 284) in der jeweils geltenden Fassung Statement Nr. 75 (ersetzt) Aufschub des Inkrafttretens bestimmter Rechnungslegungsanforderungen für die Pension Pläne der staatlichen und lokalen Regierung Unitsmdashan Änderung des FASB Statement Nr. 35 (Ausgabetag 1183) Wie ausgegeben Zusammenfassung Status Statement Nr. 73 (ersetzt) Berichterstattung eine Änderung in der Bilanzierung von Eisenbahnstrecken Strukturen mdashan Änderung der APB Stellungnahme Nr. 20 (Ausgabetag 883 ) Ausgabe Nr. 72 (ersetzt) Rechnungslegung für bestimmte Akquisitionen von Banken oder Thrift Institutionen mdashan Änderung der APB Stellungnahme Nr. 17, eine Auslegung der APB Stellungnahmen 16 und 17 und eine Änderung der FASB Interpretation Nr. 9 (Ausgabetag 283) In der geänderten Fassung Summary Statement-Nr. 70 (ersetzt) Finanzberichterstattung und Änderung der Preise: Fremdwährung Translationmdashan Änderung des FASB-Statements Nr. 33 (Ausgabetag 1282) Ausgegeben Status Statement Nr. 64 (Wiedergutmachung) Erlöschen von Schulden Satisfy Sinking-Fund Anforderungen mdashan Änderung des FASB-Statements Nr. 4 (Ausgabetag 982) Wie ausgegeben Zusammenfassung Status Statement Nr. 62 (ersetzt) Kapitalisierung der Zinskosten in Situationen, die bestimmte steuerbefreite Darlehen und bestimmte Geschenke und Grantsmdashan Änderung des FASB Statement Nr. 34 (Ausgabetag 682) In der geänderten Fassung Summary Statement-Nr. 59 (ersetzt) Aufschub des Inkrafttretens bestimmter Rechnungslegungsanforderungen für die Pensionspläne von Staat und Kommunal Unitsmdashan Änderung der FASB-Erklärung Nr. 35 (Emissionstag 482) Ausgegebene Zusammenfassung Statement-Nr. 58 (ersetzt) Kapitalisierung von Zinskosten in den Abschlüssen, die im Eigenkapital erfasste Beteiligungen enthalten Methodmdashan Änderung des FASB-Statements Nr. 34 (Ausgabetag 482) In der geänderten Fassung Summary Statement-Nr. 56 (ersetzt) Bezeichnung des AICPA-Leitfadens und des Lageplans (SOP) 81-1 des Auftragnehmer-Rechnungswesens und des SOP 81-2 für krankenhausbezogene Organisationen als bevorzugt für die Anwendung der APB-Stellungnahme 20mdashan Änderung des FASB-Statements Nr. 32 (Emissionstag Bestätigungsvermerk Nr. 55 (Wiedergutmachung) Feststellung, ob eine Wandelanleihe ein Common Stock Equivalentmdashan Änderungsantrag von APB Opinion Nr. 15 (Ausgabetag 282) ist Ausgegeben Status Statement Nr. 54 (ersetzt) Financial Reporting and Changing (Fortsetzung) Bilanzierung von immateriellen Vermögenswerten von Motor Carriersmdashan Änderung von Kapitel 5 des ARB Nr. 43 und eine Interpretation der APB-Stellungnahmen 17 Und 30 (Emissionstag 1280) Wie ausgegeben Zusammenfassung Status Statement Nr. 41 (ersetzt) Finanzberichterstattung und Preisänderung: Sondervermögen - Erwerbsbeteiligung Real Estatemdasha Ergänzung zum FASB-Statement Nr. 33 (Ausgabetag 1180) 40 (ersetzt) Finanzberichterstattung und veränderte Preise: Sondervermögen - Timberlands und wachsende Timbermdasha Ergänzung zum FASB-Statement Nr. 33 (Ausgabetag 1180) Ausgestellt Zusammenfassung Statement-Nr. 39 (ersetzt) Finanzberichterstattung und Preisänderung: Bergbau und Öl und Gasmdasha Ergänzung zum FASB Statement Nr. 33 (Emissionstag 1080) Wie ausgegeben Zusammenfassung Status Statement Nr. 32 (ersetzt) Spezialisierte Rechnungslegung und Berichterstattung Grundsätze und Praktiken in AICPA Stellungnahmen und Leitlinien für Buchhaltung und Rechnungsprüfung Mattersmdashan Änderung von APB Stellungnahme Nr. 20 (Ausgabetag 979) Ausgegebene Zusammenfassung Statuserklärung Nr. 27 (ersetzt) Klassifizierung von Erneuerungen oder Verlängerungen bestehender Verkaufstyp - oder Direktfinanzierung Leasesmdashan Änderung des FASB-Statements Nr. 13 (Emissionstag 579) Zusammenfassung Statement Nr. 25 Aussetzung bestimmter Rechnungslegungsanforderungen für Öl - und Gasproduktionsunternehmen mdashan Änderung des FASB-Statements Nr. 19 (Ausgabetag 279) in der jeweils geltenden Fassung Summary Statement Nr. 24 (ersetzte) Berichtswesen Segmentinformationen in den Abschlüssen, Präsentiert in einem anderen Unternehmen Financial Reportmdashan Änderung des FASB Statement Nr. 14 (Ausgabetag 1278) Wie ausgegeben Zusammenfassung Status Statement Nr. 22 (ersetzt) Änderungen in den Rückstellungen für Leasingverhältnisse aus Rückerstattungen von steuerbefreiten Debtmdashan Änderung der FASB-Erklärung Nr. Aussetzung der Berichterstattung über das Ergebnis je Aktie und Segmentinformationen durch nicht öffentlich-rechtliche Unternehmen mdashan Änderung der APB-Stellungnahme Nr. 15 und des FASB-Statements Nr. 14 (Ausgabetag 478 ) (Fortsetzung) Finanzberichtswesen für Segmente eines Unternehmens: Zwischenabschluss mdashan Änderung des FASB-Statements Nr. 14 (Emissionstag 1177) Wie ausgegeben Zusammenfassung Status Statement Nr. 9 (ersetzt) Bilanzierung von Erträgen Steuern: Öl - und Gasproduzierende GesellschaftenMdashan Änderung von APB-Stellungnahmen Nr. 11 und 23 (Emissionstag 1075) Ausgestellt Zusammenfassung Statement Nr. 8 (ersetzt) Bilanzierung der Fremdwährungsumrechnung und des Fremdwährungsabschlusses (Emissionstag 1075) (Fortsetzung) Bilanzierungs - und Bewertungsmethoden für Garantien, einschließlich indirekter Garantien (Forcierte Garantien). (Fortsetzung von Seite 3) (Fortsetzung) Der Verschuldung von Othersmdashan Interpretation der FASB-Erklärungen Nr. 5, 57 und 107 und Rücktritt der FASB-Interpretation Nr. 34 (Ausgabetag 1102) In der geänderten Fassung Zusammenfassung Status Interpretation 42 (ersetzt) Bilanzierung von Vermögensübertragungen, (Ausgabetag 996) Ausgegeben Auszugsstatus Interpretation 41 (Wiedergutmachung) Aufrechnung von Beträgen im Zusammenhang mit bestimmten Rückkauf - und Reverse-Repo-Geschäften mdashan Interpretation der APB Stellungnahme Nr. 10 und einer Änderung Der FASB-Interpretation Nr. 39 (Ausgabetag 1294) in der geänderten Fassung des Auszugs Summary Status Interpretation 40 (ersetzt) Anwendbarkeit allgemein anerkannter Rechnungslegungsgrundsätze für die gegenseitige Lebensversicherung und andere Unternehmen mdashan Interpretation der FASB-Statements Nr. 12, 60, 97 und 113 ( Ermittlung des Bewertungszeitpunkts für Aktienoptions-, Erwerbs - und Vergabepläne, die die Junior Stockmdashan-Interpretation der APB-Stellungnahme Nr. 25 (Emissionstag 884) betreffen, wie in der Zusammenfassung ausgelegt 37 (ersetzt) Buchhaltung für Übersetzungsanpassungen beim Verkauf eines Teils einer Investition in eine ausländische Entitymdashan - Interpretation des FASB - Statements Nr. 52 (Ausgabetag 783) In der geänderten Fassung Zusammenfassung Status Interpretation 36 (ersetzte) Bilanzierung der Explorationsbohrungen im Rahmen der Ende einer Periodmdashan-Interpretation des FASB-Statements Nr. 19 (Ausgabetag 1081) In der geänderten Fassung des Auszugszusammenfassungsstatus Interpretation 35 (ersetzte) Kriterien für die Anwendung der Equity-Methode für die Bilanzierung von Anlagen in der gemeinsamen Aktienmdashan-Interpretation der APB-Stellungnahme Nr. 18 (Emissionstag (Fortsetzung) Offenlegung der Indirekten Bürgschaften der Verschuldung von Othersmdashan Interpretation der FASB-Erklärung Nr. 5 (Ausgabetag 381) Wie ausgegeben Zusammenfassung Status Interpretation 33 (ersetzt) Anwendung der FASB-Erklärung Nr. 34 auf Öl Und Gasproduktion Operationen, die von den vollen Kosten Methodmdashan Interpretation von FASB Statement Nr. 34 (Ausgabetag 880) in der geänderten Ausgabedatum Zusammenfassung Status Interpretation 32 (ersetzte) Anwendung der Prozentsatz Einschränkungen in der Anerkennung der Investitionssteuer Creditmdashan Interpretation der APB Stellungnahmen 2, 4 , Und 11 (Emissionstag 380) Wie ausgegeben Zusammenfassung Status Interpretation 31 (ersetzt) Behandlung von Aktienkompensationsplänen in EPS Computationsmdashan Interpretation der APB Stellungnahme Nr. 15 und eine Änderung der FASB Interpretation Nr. 28 (Ausgabetag 280) als ausgegeben Zusammenfassung Status Interpretation 30 (ersetzte) Rechnungslegung für unfreiwillige Umwandlungen nichtmonetärer Vermögenswerte in monetäre Vermögenswerte mdashan Interpretation der APB-Stellungnahme Nr. 29 (Ausgabetag 979) In der geänderten Fassung des Auszugs Summary Status Interpretation 29 (Wiedergutmachung) Steuerliche Vorteile bei der Veräußerung von Anlagen in bestimmten Tochtergesellschaften und Andere lnvesteesmdashan Interpretation der APB-Stellungnahmen Nr. 23 und 24 (Ausgabetag 279) Wie ausgegeben Zusammenfassung Status Interpretation 28 (ersetzte) Buchhaltung für Stock Appreciation Rights und andere variable Aktienoption oder Auszeichnung Plansmdashan Interpretation der APB-Stellungnahmen Nr. 15 und 25 (Emission Datum 1278) In der geänderten Fassung Summary Status Interpretation 26 (ersetzt) Bilanzierung des Erwerbs eines Leasingvermögens durch den Mieter während der Laufzeit der Leasemdaschan-Interpretation des FASB-Statements Nr. 13 (Ausgabetag 978) In der geänderten Fassung Zusammenfassung Status Interpretation 25 ( Abgelehnt) Rechnungslegung für eine nicht genutzte Investmentsteuer Creditmdashan Interpretation der APB Opinions Nr. 2, 4, 11 und 16 (Ausgabetag 978) Wie ausgegeben Zusammenfassung Status Interpretation 23 (ersetzte) Leasingverhältnisse bestimmter Immobilien im Besitz einer Regierungseinheit oder Authoritymdashan Interpretation von FASB-Erklärung Nr. 13 (Ausgabetag 878) In der geänderten Fassung Summary Status Interpretation 22 (Wiedergutmachung) Anwendbarkeit der unbegrenzten Umkehrkriterien für den Zeitplan Differencesmdashan Interpretation der APB-Stellungnahmen Nr. 11 und 23 (Ausgabetag 478) Ausgegeben Status Interpretation 20 (Ersetzt ) Berichterstattung Bilanzierungsänderungen im Rahmen der AICPA Stellungnahmen von Positionmdashan Interpretation der APB-Stellungnahme Nr. 20 (Emissionstag 1177) Wie Ausgegeben Statusinterpretation 19 (Wiedergutmachung) Ruhestandsgarantie des Restwertes der geleisteten Vermietungsauslegung des FASB-Statements Nr. 13 (Emissionstag 1077) In der geänderten Fassung des Statuts Nr. 8 (Ausgabetag 277) Ausgegeben Status-Interpretation 16 (ersetzte) Klarstellung von Definitionen und Bilanzierung von marktfähigen Eigenkapitalinstrumenten Wertpapiere, die Nonmarketablemdashan werden Interpretation des FASB Statement Nr. 12 (Ausgabetag 277) Ausgegeben Status Interpretation 15 (Wiedergutmachung) Übersetzung Unamortized Policy Anschaffungskosten durch eine Lebensversicherung Companymdashan Interpretation des FASB Statement Nr. 8 (Ausgabetag 976) Status-Interpretation 13 (ersetzt) Konsolidierung eines Mutterunternehmens und seiner Tochtergesellschaften mit unterschiedlicher Bilanz Datesmdashan Interpretation des FASB-Statements Nr. 12 (Ausgabetag 976) Wie ausgegeben Status Interpretation 12 (ersetzt) Bilanzierung von zuvor gebildeten Allowance Accounts mdashan Interpretation des FASB Statement No. 12 (Ausgabetag 976) Ausgegeben Statusinterpretation 11 (Wiedergutmachung) Marktwertveränderung nach der Bilanz Datemdashan Interpretation des FASB-Statements Nr. 12 (Ausgabetag 976) Ausgegeben Statusinterpretation 10 (ersetzt) Anwendung des FASB-Statements Nr. 12 Auf persönliche Finanzausweise mdashan Interpretation der FASB-Erklärung Nr. 12 (Ausgabetag 976) Ausgegeben Status-Interpretation 9 (ersetzt) APB-Stellungnahmen Nr. 16 und 17 anwenden Wenn eine Spar - und Darlehensvereinigung oder eine ähnliche Einrichtung in einem Unternehmenszusammenschluss erworben wird Durch die Purchase Methodmdashan Interpretation der APB-Stellungnahmen Nr. 16 und 17 (Ausgabetag 276) In der geänderten Form von Status-Interpretation 8 (ersetzt) Klassifizierung einer kurzfristigen Verpflichtung getauscht, bevor sie durch eine langfristige Securitymdashan Interpretation der FASB Statement ersetzt Anwendung des FASB-Statements Nr. 7 im Jahresabschluss der Gründungsgesell - schaft mdashan-Interpretation des FASB-Statements Nr. 7 (Emissionstag 1075) In der geänderten Fassung des Statut-Interpretationsvorschlags 6 (Emissionstag 176) (Ersetzt) Anwendbarkeit der FASB-Erklärung Nr. 2 auf Computer Softwaremdashan Interpretation des FASB-Statements Nr. 2 (Ausgabedatum 275) In der geänderten Fassung als Standarderklärung 5 (ersetzt) Anwendbarkeit der FASB-Erklärung Nr. 2 auf die Entwicklungsstufe Enterprisesmdashan Interpretation der FASB-Erklärung Nr. 2 (Ausgabetag 275) Ausgegeben Status-Interpretation 4 (ersetzt) Anwendbarkeit des FASB-Statements Nr. 2 auf Unternehmenszusammenschlüsse Nach dem Kauf Methodmdashan Interpretation des FASB-Statements Nr. 2 (Emissionstag 275) 3 (ersetzt) Bilanzierung der Kosten der Pensionspläne Vorbehaltlich des Employee Retirement Income Security Act von 1974mdashan Interpretation der APB Stellungnahme Nr. 8 (Ausgabetag 1274) Ausgestellt Status Interpretation 2 (ersetzt) Interessante Zinsen auf Debt Arrangements Gemäss dem Federal Insolvenz Actmdashan Interpretation der APB Stellungnahme Nr. 21 (Ausgabetag 674) Ausgegeben Status FSP APB 14-1mdashAccounting für Wandelschuldverschreibungen, die in Bar bei der Umrechnung beglichen werden können (einschließlich Teilweise Barausgleich) (Ausgegeben am 9. Mai 2008 ) Volltextstatus FSP APB 18-1mdashBeteiligung durch einen Anleger für seinen anteiligen Anteil des kumulierten sonstigen Gesamtergebnisses eines Investees Nach der Equity-Methode in Übereinstimmung mit der APB-Stellungnahme Nr. 18 bei Verlust eines signifikanten Einflusses (ersetzt) (Emissionstag 12. Juli 2005) Volltextstatus FSP FAS 13-1mdashBuchung für Mietkosten, die während eines Bauzeitraums angefallen sind (Ausgegeben am 06.10.2005) Volltextstatus FSP FAS 13-2mdashKonto für eine Änderung oder projizierte Änderung des Zeitplans (Ausgegeben am 13. Juli 2006) Volltextstatus FSP FAS 97-1MdashSituationen in den Paragraphen 17 (b) und 20 des FASB-Statements Nr. 97, Rechnungslegung und Berichtswesen Von Versicherungsunternehmen für bestimmte Long-Duration-Verträge und für realisierte Gewinne und Verluste aus der Veräußerung von Vermögenswerten, Erlaubnis oder Erwerb einer uneinbringlichen Ertragsverpflichtung (Ausgegeben am 18. Juni 2004) Volltextstatus FSP FAS 106-2mdashAccounting und (Ausgegeben am 19. Mai 2004) Volltextstatus FSP FAS 107-1 und APB 28-1mdashInterim Angaben zum beizulegenden Zeitwert von Finanzinstrumenten (ersetzt) (Fortsetzung) (Fortsetzung) Ausgabedatum 9. April 2009) Volltextstatus FSP FAS 109-1mdashAnwendung des FASB-Statements Nr. 109, Bilanzierung von Ertragssteuern, zur Steuerabzugsquote für qualifizierte Produktionsaktivitäten Nach dem American Jobs Creation Act von 2004 (ersetzt) (Emissionstag 21. Dezember 2004) Volltextstatus FSP FAS 109-2mdashAccounting and Disclosure Guidance für die ausländische Einkommensrückführungsverpflichtung im Rahmen des American Jobs Creation Act von 2004 (ersetzt am 21. Dezember 2004) Volltextstatus FSP FAS 115-1 und FAS 124-1mdashDie Bedeutung der sonstigen befristeten Wertminderung und ihrer Anwendung auf bestimmte Anlagen (Ausgegeben am 3. November 2005) Volltextstatus FSP FAS 115-2 und FAS 124-2mdashRecognition and Presentation of Other-Than-Temporary Wertminderungen (Ausgegeben am 9. April 2009) Volltextstatus FSP FAS 117-1mdashVoraussetzungen von gemeinnützigen Organisationen: Net Asset Classification of Funds Vorbehaltlich einer Enabled Version des Uniform Umgekehrten Managements des Institutional Funds Act und Enhanced Offenlegungen für All-Endowment-Fonds (Ausgegeben am 06. August 2008) Volltextstatus FSP FAS 123 (R) -1mdashKlassifizierung und Bewertung von freistehenden Finanzinstrumenten, die ursprünglich im Rahmen von FASB - (Ausgabedatum 31. August 2005) Volltextstatus FSP FAS 123 (R) -2mdashPraktische Unterbringung zum Antrag des Erteilungsdatums gemäß FASB-Statement Nr. 123 (R) (Ausgegeben am 18. Oktober 2005) Volltextstatus FSP FAS 123 (R) -3mdashTransitionswahl im Zusammenhang mit der Bilanzierung der steuerlichen Auswirkungen von aktienbasierten Vergütungen (Ausgegeben am 10. November 2005) Volltextstatus FSP FAS 123 (R) -4mdashKlassifizierung der Optionen und (Ausgegeben am 3. Februar 2006) Volltextstatus FSP FAS 123 (R) -5mdashAmendment von FASB-Mitarbeitern Position FAS 123 (R) - Vergleichbare Instrumente, die eine Barausgleichszahlung bei Eintritt eines bedingten Ereignisses ermöglichen (Ausgegeben am 10. Oktober 2006) Volltextstatus FSP FAS 123 (R) -6mdashTechnische Korrekturen des FASB-Statements Nr. 123 (R) (Ausgegeben am 20. Oktober 2006) Volltextstatus FSP FAS 126 -1mdashAnwendbarkeit bestimmter Offenlegungspflichten und Zwischenberichterstattungsanforderungen für Schuldverschreibungspflichtige (ersetzt) (Ausgabetag 25. Oktober 2006) Volltextstatus FSP FAS 129-1mdashDisclosure-Anforderungen gemäß FASB-Statement Nr. 129 in Bezug auf bedingt konvertierbare Wertpapiere (ersetzt) ( (Ausgabedatum April 9, 2004) Volltextstatus FSP FAS 132 (R) -1mdashEmployersrsquo Angaben zum Postretirement Benefit Plan Assets (Ausgegeben am 30. Dezember 2008) Volltextstatus FSP FAS 133-1 und FIN 45-4mdashVeröffentlichungen über Kredit Derivate und bestimmte Garantien: Änderung der FASB-Erklärung Nr. 133 und FASB-Interpretation Nr. 45 und Klarstellung des Inkrafttretens der FASB-Erklärung Nr. 161 (Ausgegeben am 12. September 2008) Volltextstatus FSP FAS 140-1mdashAccounting (Ausgegeben am 14. April 2003) Volltextstatus FSP FAS 140-2mdashKlärung der Anwendung der §§ 40 (b) und 40 (c) Ziff FASB-Statement Nr. 140 (ersetzt) (Ausgabetag 9. November 2005) Volltext Status FSP FAS 140-3mdashKonto für Transfers von finanziellen Vermögenswerten und Rückkauffinanzierungen (ersetzt am 20. Februar 2008) Als Geänderter Volltext Status FSP FAS 140-4 und FIN 46 (R) -8mdashGeschäfte von öffentlichen Körperschaften zu Transaktionen von finanziellen Vermögenswerten und Beteiligungen an Unternehmen mit variabler Verzinsung (ausgegeben am 11. Dezember 2008) Volltextstatus FSP FAS 141-1 und FAS 142-1mdashInteraktion der FASB-Statements Nr. 141 und Nr. 142 und EITF Ausgabe Nr. 04-2 (ersetzt) (Emissionsdatum 30. April 2004) Als Geänderter Volltext Status FSP FAS 141 (R) -1mdashAccounting für erworbene Vermögenswerte und Verbindlichkeiten (Ausgegeben am 1. April 2009) Volltextstatus FSP FAS 142-2mdashAnwendung des FASB-Statements Nr. 142 zu den öl - und gasproduzierenden Einheiten (Ausgegeben am 2. September 2009) , 2004) Volltextstatus FSP FAS 142-3mdashBestimmung der Nutzungsdauer von immateriellen Vermögenswerten (Ausgegeben am 25. April 2008) Volltextstatus FSP FAS 143-1mdashBerechnung für elektronische Anlagenabfallverpflichtungen (ersetzt) (Ausgabetag 8 , 2005) Volltextstatus FSP FAS 144-1mdashBestimmung der Kostenbasis für fremdvermietete Vermögenswerte nach FASB-Statement Nr. 15 und die bislang gemäß § 37 FASB-Statement Nr. 144 (ersetzte) Bewertung (Ausgabetag 11. November 2003) anerkannte Bewertung der kumulierten Verluste ) Volltextstatus FSP FAS 146-1mdashBestimmung Ob ein in Verbindung mit einer Exit - oder Veräußerungsleistung angebotener einmaliger Kündigungsvorgang im Wesentlichen eine Verbesserung einer laufenden Leistungsvereinbarung ist (ersetzt) (Ausgabetag 3. September 2003) Volltext Status FSP FAS 150-1mdashIssuers Bilanzierung von freistehenden Finanzinstrumenten bestehend aus mehr als einem Options - oder Terminkontrakt Verpflichtungen nach FASB-Statement Nr. 150 (Ausgegeben am 16. Oktober 2003) Volltextstatus FSP FAS 150-2mdashKonto für Mandatorisch einlösbar Anteile, die eine Rückzahlung durch Zahlung eines Betrages verlangen, der vom Buchwert dieser Anteile nach FASB abweicht. Erläuterung Nr. 150 (ersetzt) (Ausgabetag 16. Oktober 2003) Volltext Status FSP FAS 150-3mdashEffective Date, Disclosures and Transition for Mandatorily Einzahlbare Finanzinstrumente bestimmter nicht öffentlicher Gesellschaften und bestimmte nachrangige Noncontrolling-Anteile gemäß FASB-Statement Nr. 150 (ersetzt) (Emissionsdatum 7. November 2003) Als Geänderter Volltext Status FSP FAS 150-4mdashIssuers Bilanzierung von Mitarbeiterbeteiligungsplänen nach FASB-Statement Nr (Ausgabetag 7. November 2003) Volltextstatus FSP FAS 150-5mdashIssuers Rechnungslegung gemäß § 150 für freistehende Optionsscheine und andere ähnliche Instrumente für rückzahlbare (ersetzte) Anteile (Ausgabetag 29. Juni 2005) Volltext Status FSP FAS 157-1mdashAnwendung des FASB-Statements Nr. 157 zu FASB-Statement Nr. 13 und anderer Rechnungslegungsvorausschätzungen Die Angabe von Fair Value-Messungen für Zwecke der Leasingklassifizierung oder - messung gemäß Statement 13 (ersetzt) (Emissionstag 14. Februar 2008) Volltextstatus FSP FAS 157-3mdashBestimmen des beizulegenden Zeitwerts eines finanziellen Vermögenswertes, wenn der Markt für diesen Vermögenswert nicht aktiv ist (Ausgegeben am 10. Oktober 2008) Volltextstatus FSP FAS 157-4mdashBestimmen des Fair Value Wenn Volumen und Level (Fassung vom 9. April 2009) Volltextstatus FSP FAS 158-1mdashKonformieren von Änderungen der Abbildungen in den FASB-Statements Nr. 87, Nr. 88 (Ausgabedatum 21. Februar 2007) Volltextstatus FSP FIN 45-1mdashBuchung für die Verletzung von Urheberrechtsverletzungen gemäß FASB-Interpretation Nr. 45 (ersetzt) (Fortsetzung) Ausgabedatum 11. Juni 2003) Volltext Status FSP FIN 45-2mdashWhether FASB Interpretation Nr. 45 bietet Unterstützung für die anschließende Bilanzierung einer Garantin Haftung zum Fair Value (ausgegeben am 10. Dezember 2003) Volltext Status FSP FIN 45- 3mdashApplication of FASB Interpretation No. 45 to Minimum Revenue Guarantees Granted to a Business or Its Owners (Superseded) (Issue Date November 10, 2005) Full Text Status FSP FIN 46(R)-1mdashReporting Variable Interests in Specified Assets of Variable Interest Entities as Separate Variable Interest Entities under Paragraph 13 of FASB Interpretation No. 46 (revised December 2003) (Superseded) (Superseded) (Issue Date February 12, 2004) Full Text Status FSP FIN 46(R)-2mdashCalculation of Expected Losses under FASB Interpretation No . 46 (revised December 2003) (Superseded) (Issue Date February 12, 2004) Full Text Status FSP FIN 46(R)-3mdashEvaluating Whether, as a Group, the Holders of the Equity Investment at Risk Lack the Direct or Indirect Ability to Make Decisions about an Entitys Activities through Voting Rights or Similar Rights under FASB Interpretation No. 46 (revised December 2003) (Superseded) (Issue Date February 12, 2004) Full Text Status FSP FIN 46(R)-4mdashTechnical Correction of FASB Interpretation No . 46 (revised December 2003) Relating to Its Effects on Question No. 12 of EITF Issue No. 96-21 (Superseded) (Issue Date April 30, 2004) Full Text Status FSP FIN 46(R)-5mdashImplicit Variable Interests under FASB Interpretation No. 46 (revised December 2003) (This FSP is applicable to both nonpublic and public reporting enterprises. This issue commonly arises in leasing arrangements among related parties, and in other types of arrangements involving related parties and previously unrelated parties.) (Superseded) (Issue Date March 3, 2005) Full Text Status FSP FIN 46(R)-6mdashDetermining the Variability to Be Considered in Applying FASB Interpretation No. 46(R) (Superseded) (Issue Date April 13, 2006) Full Text Status FSP FIN 46(R)-7mdashApplication of FASB Interpretation No. 46(R) to Investment Companies (Superseded) (Issue Date May 11, 2007) Full Text Status FSP FIN 48-1mdashDefinition of Settlement in FASB Interpretation No. 48 (Issue Date May 2, 2007) Full Text Status FSP FIN 48-2mdashEffective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises (Superseded) (Issue Date February 1, 2008) As Amended Full Text Status FSP FIN 48-3mdashEffective Date of FASB Interpretation No. 48 for Certain Nonpublic Enterprises (Superseded) (Issue Date December 30, 2008) Full Text Status FSP FTB 85-4-1mdashAccounting for Life Settlement Contracts by Third-Party Investors (Superseded) (Issue Date March 27, 2006) Full Text Status FSP EITF 85-24-1mdashApplication of EITF Issue No. 85-24 When Cash for the Right to Future Distribution Fees for Shares Previously Sold Is Received from Third Parties (Superseded) (Issue Date March 11, 2005) Full Text Status FSP EITF 99-20-1mdashAmendments to the Impairment Guidance of EITF Issue No. 99-20 (Superseded) (Issue Date January 12, 2009) Full Text Status FSP EITF 00-19-2mdashAccounting for Registration Payment Arrangements (Superseded) (Issue Date December 21, 2006) Full Text Status FSP EITF 03-6-1mdashDetermining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (Superseded) (Issue Date June 16, 2008) Full Text Status FSP AAG INV-1 and SOP 94-4-1mdashReporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (Superseded) (Issue Date December 29, 2005) Full Text Status FSP AUG AIR-1mdashAccounting for Planned Major Maintenance Activities (Superseded) (Issue Date September 8, 2006) Full Text Status FSP SOP 78-9-1mdashInteraction of AICPA Statement of Position 78-9 and EITF Issue No. 04-5 (Issue Date July 14, 2005) Full Text Status FSP SOP 90-7-1mdashAn Amendment of AICPA Statement of Position 90-7 (Superseded) (Issue Date April 24, 2008) Full Text Status FSP SOP 94-3-1 and AAG HCO-1mdashOmnibus Changes to Consolidation and Equity Method Guidance for Not-for-Profit Organizations (Superseded) (Issue Date May 19, 2008) Full Text Status FSP SOP 94-6-1mdashTerms of Loan Products That May Give Rise to a Concentration of Credit Risk (Superseded) (Issue Date December 19, 2005) Full Text Status FSP FAS 106-1mdashAccounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Superseded) (Issue Date January 12, 2004) (Superseded by FSP FAS 106-2, paragraph 2) Full Text Status FSP FIN 46-1mdashApplicability of FASB Interpretation No. 46 to Entities Subject to the AICPA Audit and Accounting Guide, Health Care Organizations (Superseded) (Issue Date July 24, 2003) (Updated as of December 24, 2003) Full Text Status FSP FIN 46-2mdashReporting Variable Interests in Specified Assets of Variable Interest Entities as Separate Variable Interest Entities under Paragraph 13 of FASB Interpretation No. 46 (Superseded) (Issue Date July 24, 2003) (Updated as of December 24, 2003) Full Text Status FSP FIN 46-3mdashApplication of Paragraph 5 of FASB Interpretation No. 46 When Variable Interests in Specified Assets of a Variable Interest Entity Are Not Considered Interests in the Entity under Paragraph 12 of Interpretation 46 (Superseded) (Issue Date July 24, 2003) (Updated as of December 24, 2003) Full Text Status FSP FIN 46-4mdashTransition Requirements for Initial Application of FASB Interpretation No. 46 (Superseded) (Issue Date July 24, 2003) (Updated as of December 24, 2003) Full Text Status FSP FIN 46-5mdashCalculation of Expected Losses under FASB Interpretation No. 46 (Superseded) (Issue Date July 24, 2003) (Updated as of December 24, 2003) Full Text Status FSP FIN 46-6mdashEffective Date of FASB Interpretation No. 46 (Superseded) (Issue Date October 9, 2003) (Updated December 24, 2003) Full Text Status FSP FIN 46-7mdashExclusion of Certain Decision Maker Fees from Paragraph 8(c) of FASB Interpretation No. 46 (Superseded) (Issue Date November 26, 2003) (Updated February 12, 2004) Full Text Status FSP FIN 46-8mdashEvaluating Whether as a Group the Holders of the Equity Investment at Risk Lack the Direct or Indirect Ability to Make Decisions about an Entitys Activities through Voting Rights or Similar Rights under FASB Interpretation No. 46 (Superseded) (Issue Date December 19, 2003) (Updated as of December 24, 2003) Full Text Status FSP EITF 00-19-1mdashApplication of EITF Issue No. 00-19 to Freestanding Financial Instruments Originally Issued as Employee Compensation (Superseded) (Issue Date May 31, 2005) (Superseded by FSP FAS 123(R)-1) Full Text Status FSP EITF 03-1-1mdashEffective Date of Paragraphs 10ndash20 of EITF Issue No. 03-1 (Superseded) (September 30, 2004) (Superseded by FSP FAS 115-1124-1, paragraph 5) Full Text Status Technical Bulletin 01-1 (Superseded) Effective Date for Certain Financial Institutions of Certain Provisions of Statement 140 Related to the Isolation of Transferred Financial Assets (Issue Date 701) As Amended As Issued Status Technical Bulletin 97-1 (Superseded) Accounting under Statement 123 for Certain Employee Stock Purchase Plans with a Look-Back Option (Issue Date 1297) As Amended As Issued Status Technical Bulletin 94-1 (Superseded) Application of Statement 115 to Debt Securities Restructured in a Troubled Debt Restructuring (Issue Date 494) As Amended As Issued Status Technical Bulletin 87-1 (Superseded) Accounting for a Change in Method of Accounting for Certain Postretirement Benefits (Issue Date 487) As Issued Status Technical Bulletin 86-1 (Superseded) Accounting for Certain Effects of the Tax Reform Act of 1986 (Issue Date 1086) As Issued Status Technical Bulletin 85-6 (Superseded) Accounting for a Purchase of Treasury Shares and Costs Incurred in Defending against a Takeover Attempt (Issue Date 1285) As Amended As Issued Status Technical Bulletin 85-1 (Superseded) Accounting for the Receipt of Federal Home Loan Mortgage Corporation Participating Preferred Stock (Issue Date 385) As Amended As Issued Status Technical Bulletin 84-3 (Superseded) Accounting for the Effects of the Tax Reform Act of 1984 on Deferred Income Taxes of Stock Life Insurance Enterprises (Issue Date 984) As Issued Status Technical Bulletin 84-2 (Superseded) Accounting for the Effects of the Tax Reform Act of 1984 on Deferred Income Taxes Relating to Domestic International Sales Corporations (Issue Date 984) As Issued Status Technical Bulletin 84-1 (Superseded) Accounting for Stock Issued to Acquire the Results of a Research and Development Arrangement (Issue Date 384) As Amended As Issued Status Technical Bulletin 83-1 (Superseded) Accounting for the Reduction in the Tax Basis of an Asset Caused by the Investment Tax Credit (Issue Date 783) As Issued Status Technical Bulletin 82-2 (Superseded) Accounting for the Conversion of Stock Options into Incentive Stock Options as a Result of the Economic Recovery Tax Act of 1981 (Issue Date 382) As Issued Status Technical Bulletin 81-2 (Superseded) Accounting for Unused Investment Tax Credits Acquired in a Business Combination Accounted for by the Purchase Method (Issue Date 281) As Issued Status Technical Bulletin 81-1 (Superseded) Disclosure of Interest Rate Futures Contracts and Forward and Standby Contracts (Issue Date 281) As Issued Status Technical Bulletin 79-19 (Superseded) Investors Accounting for Unrealized Losses on Marketable Securities Owned by an Equity Method Investee (Issue Date 1279) As Amended As Issued Status Technical Bulletin 79-18 (Superseded) Transition Requirement of Certain FASB Amendments and Interpretations of FASB Statement No. 13 (Issue Date 1279) As Amended As Issued Status Technical Bulletin 79-17 (Superseded) Reporting Cumulative Effect Adjustment from Retroactive Application of FASB Statement No. 13 (Issue Date 1279) As Amended As Issued Status Technical Bulletin 79-16 (Superseded) Effect of a Change in Income Tax Rate on the Accounting for Leveraged Leases (Issue Date 1279) As Issued Status Technical Bulletin 79-8 (Superseded) Applicability of FASB Statements 21 and 33 to Certain Brokers and Dealers in Securities (Issue Date 1279) As Issued Status Technical Bulletin 79-7 (Superseded) Recoveries of a Previous Writedown under a Troubled Debt Restructuring Involving a Modification of Terms (Issue Date 1279) As Issued Status Technical Bulletin 79-5 (Superseded) Meaning of the Term quotCustomerquot as It Applies to Health Care Facilities under FASB Statement No. 14 (Issue Date 1279) As Amended As Issued Status EITF 08-5 (Superseded) Issuers Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement Full Text EITF 08-8 (Superseded) Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That Is Based on the Stock of an Entitys Consolidated Subsidiary Full Text EITF 07-2 (Superseded) Accounting for Convertible Debt Instruments That Are Not Subject to the Guidance in Paragraph 12 of APB Opinion No. 14 Full Text EITF 07-3 (Superseded) Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in Future Research and Development Activities Full Text EITF 07-4 (Superseded) Application of the Two-Class Method under FASB Statement No. 128 to Master Limited Partnerships Full Text EITF 07-5 (Superseded) Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entitys Own Stock Full Text EITF 07-6 (Superseded) Accounting for the Sale of Real Estate Subject to the Requirements of FASB Statement No. 66 When the Agreement Includes a Buy-Sell Clause Full Text EITF 06-1 (Superseded) Accounting for Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service from the Service Provider Full Text EITF 06-2 (Superseded) Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No. 43 Full Text EITF 06-3 (Superseded) How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation) Full Text EITF 06-4 (Superseded) Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements Full Text EITF 06-5 (Superseded) Accounting for Purchases of Life InsurancemdashDetermining the Amount That Could Be Realized in Accordance with FASB Technical Bulletin No. 85-4 Full Text EITF 06-6 (Superseded) Debtors Accounting for a Modification or Exchange of Convertible Debt Instruments Full Text EITF 06-7 (Superseded) Issuers Accounting for a Previously Bifurcated Conversion Option in a Convertible Debt Instrument When the Conversion Option No Longer Meets the Bifurcation Criteria in FASB Statement No. 133 Full Text EITF 06-8 (Superseded) Applicability of the Assessment of a Buyers Continuing Investment under FASB Statement No. 66 for Sales of Condominiums Full Text EITF 06-9 (Superseded) Reporting a Change in (or the Elimination of) a Previously Existing Difference between the Fiscal Year-End of a Parent Company and That of a Consolidated Entity or between the Reporting Period of an Investor and That of an Equity Method Investee Full Text EITF 06-10 (Superseded) Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements Full Text EITF 06-11 (Superseded) Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards Full Text EITF 06-12 (Superseded) Accounting for Physical Commodity Inventories for Entities within the Scope of the AICPA Audit and Accounting Guide, Brokers and Dealers in Securities Full Text EITF 05-1 (Superseded) Accounting for the Conversion of an Instrument That Became Convertible upon the Issuers Exercise of a Call Option Full Text EITF 05-4 (Superseded) The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument Subject to Issue No. 00-19 Full Text EITF 05-5 (Superseded) Accounting for Early Retirement or Postemployment Programs with Specific Features (Such As Terms Specified in Altersteilzeit Early Retirement Arrangements) Full Text EITF 05-6 (Superseded) Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination Full Text EITF 05-7 (Superseded) Accounting for Modifications to Conversion Options Embedded in Debt Instruments and Related Issues Status: Superseded by Issue No. 06-6 EITF 05-8 (Superseded) Income Tax Consequences of Issuing Convertible Debt with a Beneficial Conversion Feature Full Text EITF 04-1 (Superseded) Accounting for Preexisting Relationships between the Parties to a Business Combination Full Text EITF 04-5 (Superseded) Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights Full Text EITF 04-6 (Superseded) Accounting for Stripping Costs Incurred during Production in the Mining Industry Full Text EITF 04-7 (Superseded) Determining Whether an Interest Is a Variable Interest in a Potential Variable Interest Entity Full Text EITF 04-8 (Superseded) The Effect of Contingently Convertible Instruments on Diluted Earnings per Share Full Text EITF 04-10 (Superseded) Determining Whether to Aggregate Operating Segments That Do Not Meet the Quantitative Thresholds Full Text EITF 04-11 (Superseded) Accounting in a Business Combination for Deferred Postcontract Customer Support Revenue of a Software Vendor Status: Deemed no longer technically helpful EITF 04-12 (Superseded) Determining Whether Equity-Based Compensation Awards Are Participating Securities Full Text EITF 03-1 (Superseded) The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments Status: Nullified by FSP FAS115-1FAS124-1 EITF 03-2 (Superseded) Accounting for the Transfer to the Japanese Government of the Substitutional Portion of Employee Pension Fund Liabilities Full Text EITF 03-3 (Superseded) Applicability of Topic No. D-79 to Claims-Made Insurance Policies Status: Codified in Issue No. 03-8 EITF 03-4 (Superseded) Determining the Classification and Benefit Attribution Method for a quotCash Balancequot Pension Plan Full Text EITF 03-5 (Superseded) Applicability of AICPA Statement of Position 97-2 to Non-Software Deliverables in an Arrangement Containing More-Than-Incidental Software Full Text EITF 03-7 (Superseded) Accounting for the Settlement of the Equity-Settled Portion of a Convertible Debt Instrument That Permits or Requires the Conversion Spread to Be Settled in Stock (Instrument C of Issue No. 90-19) Full Text EITF 03-8 (Superseded) Accounting for Claims-Made Insurance and Retroactive Insurance Contracts by the Insured Entity Full Text EITF 03-9 (Superseded) Determination of the Useful Life of Renewable Intangible Assets under FASB Statement No. 142 Full Text EITF 03-10 (Superseded) Application of Issue No. 02-16 by Resellers to Sales Incentives Offered to Consumers by Manufacturers Full Text EITF 03-11 (Superseded) Reporting Realized Gains and Losses on Derivative Instruments That Are Subject to FASB Statement No. 133 and Not quotHeld for Trading Purposesquot as Defined in Issue No 02-3 Full Text EITF 03-13 (Superseded) Applying the Conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether to Report Discontinued Operations Full Text EITF 03-14 (Superseded) Participants Accounting for Emissions Allowances under a quotCap and Tradequot Program Full Text EITF 03-15 (Superseded) Interpretation of Constraining Conditions of a Transferee in a Collateralized Bond Obligation Structure Not yet discussed EITF 03-17 (Superseded) Subsequent Accounting for Executory Contracts That Have Been Recognized on an Entitys Balance Sheet Full Text EITF 02-3 (Superseded) Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities Full Text EITF 02-4 (Superseded) Determining Whether a Debtors Modification or Exchange of Debt Instruments Is within the Scope of FASB Statement No. 15 Full Text EITF 02-6 (Superseded) Classification in the Statement of Cash Flows of Payments Made to Settle an Asset Retirement Obligation within the Scope of FASB Statement No. 143 Full Text EITF 02-7 (Superseded) Unit of Accounting for Testing Impairment of Indefinite-Lived Intangible Assets Full Text EITF 02-8 (Superseded) Accounting for Options Granted to Employees in Unrestricted, Publicly Traded Shares of an Unrelated Entity Full Text EITF 02-9 (Superseded) Accounting for Changes That Result in a Transferor Regaining Control of Financial Assets Sold Full Text EITF 02-10 (Superseded) Determining Whether a Debtor Is Legally Released as Primary Obligor When the Debtor Becomes Secondarily Liable under the Original Obligation Status: Deemed no longer technically helpful EITF 02-12 (Superseded) Permitted Activities of a Qualifying Special-Purpose Entity in Issuing Beneficial Interests under FASB Statement No. 140 Full Text EITF 02-13 (Superseded) Deferred Income Tax Considerations in Applying the Goodwill Impairment Test in FASB Statement No. 142 Full Text EITF 02-14 (Superseded) Whether an Investor Should Apply the Equity Method of Accounting to Investments Other Than Common Stock Full Text EITF 02-15 (Superseded) Determining Whether Certain Conversions of Convertible Debt to Equity Securities Are within the Scope of FASB Statement No. 84 Full Text EITF 02-16 (Superseded) Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor Full Text EITF 02-17 (Superseded) Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination Full Text EITF 02-18 (Superseded) Accounting for Subsequent Investments in an Investee after Suspension of Equity Method Loss Recognition Full Text EITF 01-1 (Superseded) Accounting for a Convertible Instrument Granted or Issued to a Nonemployee for Goods or Services or a Combination of Goods or Services and Cash Full Text EITF 01-5 (Superseded) Application of FASB Statement No. 52 to an Investment Being Evaluated for Impairment That Will Be Disposed Of Full Text EITF 01-9 (Superseded) Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products) Full Text EITF 01-11 (Superseded) Application of Issue No. 00-19 to a Contemporaneous Forward Purchase Contract and Written Put Option Status: Resolved by FAS 150 EITF 01-12 (Superseded) The Impact of the Requirements of FASB Statement No. 133 on Residual Value Guarantees in Connection with a Lease Full Text EITF 01-14 (Superseded) Income Statement Characterization of Reimbursements Received for quotOut-of-Pocketquot Expenses Incurred Full Text EITF 00-1 (Superseded) Investor Balance Sheet and Income Statement Display under the Equity Method for Investments in Certain Partnerships and Other Ventures Full Text EITF 00-3 (Superseded) Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to Use Software Stored on Another Entitys Hardware Full Text EITF 00-4 (Superseded) Majority Owners Accounting for a Transaction in the Shares of a Consolidated Subsidiary and a Derivative Indexed to the Minority Interest in That Subsidiary Full Text EITF 00-5 (Superseded) Determining Whether a Nonmonetary Transaction Is an Exchange of Similar Productive Assets Status: Codified in Issue No. 01-2 EITF 00-6 (Superseded) Accounting for Freestanding Derivative Financial Instruments Indexed to, and Potentially Settled in, the Stock of a Consolidated Subsidiary Full Text EITF 00-7 (Superseded) Application of Issue No. 96-13 to Equity Derivative Instruments That Contain Certain Provisions That Require Net Cash Settlement if Certain Events Outside the Control of the Issuer Occur Status: Codified in Issue No. 00-19 EITF 00-8 (Superseded) Accounting by a Grantee for an Equity Instrument to Be Received in Conjunction with Providing Goods or Services Full Text EITF 00-11 (Superseded) Lessors Evaluation of Whether Leases of Certain Integral Equipment Meet the Ownership Transfer Requirements of FASB Statement No. 13 Full Text EITF 00-12 (Superseded) Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee Full Text EITF 00-13 (Superseded) Determining Whether Equipment Is quotIntegral Equipmentquot Subject to FASB Statements No. 66 and No. 98 Full Text EITF 00-14 (Superseded) Accounting for Certain Sales Incentives Status: Codified in Issue No. 01-9 EITF 00-15 (Superseded) Classification in the Statement of Cash Flows of the Income Tax Benefit Received by a Company upon Exercise of a Nonqualified Employee Stock Option Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 00-16 (Superseded) Recognition and Measurement of Employer Payroll Taxes on Employee Stock-Based Compensation Full Text EITF 00-17 (Superseded) Measuring the Fair Value of Energy-Related Contracts in Applying Issue No. 98-10 Status: Superseded by Issue No. 02-3 EITF 00-18 (Superseded) Accounting Recognition for Certain Transactions involving Equity Instruments Granted to Other Than Employees Full Text EITF 00-19 (Superseded) Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock Full Text EITF 00-20 (Superseded) Accounting for Costs Incurred to Acquire or Originate Information for Database Content and Other Collections of Information Status: Deemed no longer technically helpful EITF 00-22 (Superseded) Accounting for quotPointsquot and Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free Products or Services to Be Delivered in the Future Full Text EITF 00-23 (Superseded) Issues Related to the Accounting for Stock Compensation under APB Opinion No. 25 and FASB Interpretation No. 44 Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) Full Text EITF 00-24 (Superseded) Revenue Recognition: Sales Arrangements That Include Specified-Price Trade-in Rights Full Text EITF 00-25 (Superseded) Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendors Products Status: Codified in Issue No. 01-9 EITF 99-3 (Superseded) Application of Issue No. 96-13 to Derivative Instruments with Multiple Settlement Alternatives Status: Codified in Issue No. 00-19 EITF 99-4 (Superseded) Accounting for Stock Received from the Demutualization of a Mutual Insurance Company Full Text EITF 99-6 (Superseded) Impact of Acceleration Provision in Grants Made between Initiation and Consummation of a Pooling-of-Interests Business Combinationquot Status: Nullified by FAS 141 EITF 99-8 (Superseded) Accounting for Transfers of Assets That Are Derivative Instruments but That Are Not Financial Assets Full Text EITF 99-11 (Superseded) Subsequent Events Caused by Year 2000 Status: Deemed no longer technically helpful EITF 99-12 (Superseded) Determination of the Measurement Date for the Market Price of Acquirer Securities Issued in a Purchase Business Combination Full Text EITF 99-13 (Superseded) Application of Issue No. 97-10 and FASB Interpretation No. 23 to Entities That Enter into Leases with Governmental Entities Full Text EITF 99-14 (Superseded) Recognition by a Purchaser of Losses on Firmly Committed Executory Contracts Full Text EITF 99-15 (Superseded) Accounting for Decreases in Deferred Tax Asset Valuation Allowances Established in a Purchase Business Combination As a Result of a Change in Tax Regulations Full Text EITF 99-16 (Superseded) Accounting for Transactions with Elements of Research and Development Arrangements Full Text EITF 99-18 (Superseded) Effect on Pooling-of-Interests Accounting of Contracts Indexed to a Companys Own Stock Status: Resolved by FAS 141 EITF 99-20 (Superseded) Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets Full Text EITF 98-2 (Superseded) Accounting by a Subsidiary or Joint Venture for an Investment in the Stock of Its Parent Company or Joint Venture Partner Full Text EITF 98-3 (Superseded) Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business Full Text EITF 98-5 (Superseded) Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios Full Text EITF 98-6 (Superseded) Investors Accounting for an Investment in a Limited Partnership When the Investor Is the Sole General Partner and the Limited Partners Have Certain Approval or Veto Rights Full Text EITF 98-7 (Superseded) Accounting for Exchanges of Similar Equity Method Investments Status: Codified in Issue No. 01-2 EITF 98-10 (Superseded) Accounting for Contracts Involved in Energy Trading and Risk Management Activities Status: Superseded by Issue No. 02-3 EITF 98-11 (Superseded) Accounting for Acquired Temporary Differences in Certain Purchase Transactions That Are Not Accounted for as Business Combinations Full Text EITF 98-12 (Superseded) Application of Issue No. 00-19 to Forward Equity Sales Transactions Status: Nullified by FAS 150 EITF 98-13 (Superseded) Accounting by an Equity Method Investor for Investee Losses When the Investor Has Loans to and Investments in Other Securities of the Investee Full Text EITF 97-1 (Superseded) Implementation Issues in Accounting for Lease Transactions, including Those involving Special-Purpose Entities Full Text EITF 97-2 (Superseded) Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Practice Management Entities and Certain Other Entities with Contractual Management Arrangements Full Text EITF 97-3 (Superseded) Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations after the Issuance of FASB Statement No. 125 Full Text EITF 97-4 (Superseded) Deregulation of the Pricing of Electricity---Issues Related to the Application of FASB Statements No. 71 and 101 Full Text EITF 97-5 (Superseded) Accounting for the Delayed Receipt of Option Shares upon Exercise under APB Opinion No. 25 Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 97-6 (Superseded) Application of Issue No. 96-20 to Qualifying Special-Purpose Entities Receiving Transferred Financial Assets Prior to the Effective Date of FASB Statement No. 125 Status: Nullified by FAS 140 EITF 97-7 (Superseded) Accounting for Hedges of the Foreign Currency Risk Inherent in an Available-for-Sale Marketable Equity Security Full Text EITF 97-8 (Superseded) Accounting for Contingent Consideration Issued in a Purchase Business Combination Full Text EITF 97-9 (Superseded) Effect on Pooling-of-Interests Accounting of Certain Contingently Exercisable Options or Other Equity Instruments Status: Nullified by FAS 141 EITF 97-11 (Superseded) Accounting for Internal Costs Relating to Real Estate Property Acquisitions Full Text EITF 97-12 (Superseded) Accounting for Increased Share Authorizations in an IRS Section 423 Employee Stock Purchase Plan under APB Opinion No. 25 Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 97-13 (Superseded) Accounting for Costs Incurred in Connection with a Consulting Contract or an Internal Project That Combines Business Process Reengineering and Information Technology Transformation Full Text EITF 97-14 (Superseded) Accounting for Deferred Compensation Arrangements Where Amounts Earned Are Held in a Rabbi Trust and Invested Full Text EITF 97-15 (Superseded) Accounting for Contingency Arrangements Based on Security Prices in a Purchase Business Combination Full Text EITF 96-1 (Superseded) Sale of Put Options on Issuers Stock That Require or Permit Cash Settlement Status: Codified in Issue No. 96-13 EITF 96-2 (Superseded) Impairment Recognition When a Nonmonetary Asset Is Exchanged or Is Distributed to Owners and Is Accounted for at the Assets Recorded Amount Status: Codified in Issue No. 01-2 EITF 96-3 (Superseded) Accounting for Equity Instruments That Are Issued for Consideration Other Than Employee Services under FASB Statement No.123 Status: Superseded by Issue No. 96-18 EITF 96-4 (Superseded) Accounting for Reorganizations Involving a Non-Pro Rata Split-off of Certain Nonmonetary Assets to Owners Status: Codified in Issue No. 01-2 EITF 96-5 (Superseded) Recognition of Liabilities for Contractual Termination Benefits or Changing Benefit Plan Assumptions in Anticipation of a Business Combination Full Text EITF 96-6 (Superseded) Accounting for the Film and Software Costs Associated with Developing Entertainment and Educational Software Products Full Text EITF 96-7 (Superseded) Accounting for Deferred Taxes on In-Process Research and Development Activities Acquired in a Purchase Business Combination Full Text EITF 96-8 (Superseded) Accounting for a Business Combination When the Issuing Company Has Targeted Stock Status: Nullified by FAS 141 EITF 96-9 (Superseded) Classification of Inventory Markdowns and Other Costs Associated with a Restructuring Full Text EITF 96-10 (Superseded) Impact of Certain Transactions on the Held-to-Maturity Classification under FASB Statement No. 115 Full Text EITF 96-11 (Superseded) Accounting for Forward Contracts and Purchased Options to Acquire Securities Covered by FASB Statement No. 115 Full Text EITF 96-12 (Superseded) Recognition of Interest Income and Balance Sheet Classification of Structured Notes Full Text EITF 96-13 (Superseded) Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock Status: Codified in Issue No. 00-19 EITF 96-14 (Superseded) Accounting for the Costs Associated with Modifying Computer Software for the Year 2000 Status: Deemed no longer technically helpful EITF 96-15 (Superseded) Accounting for the Effects of Changes in Foreign Currency Exchange Rates on Foreign-Currency-Denominated Available-for-Sale Debt Securities Full Text EITF 96-16 (Superseded) Investors Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights Full Text EITF 96-17 (Superseded) Revenue Recognition under Long-Term Power Sales Contracts That Contain both Fixed and Variable Pricing Terms Full Text EITF 96-18 (Superseded) Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services Full Text EITF 96-20 (Superseded) Impact of FASB Statement No. 125 on Consolidation of Special-Purpose Entities Status: Nullified by FAS 140 EITF 96-21 (Superseded) Implementation Issues in Accounting for Leasing Transactions involving Special-Purpose Entities Full Text EITF 96-22 (Superseded) Applicability of the Disclosures Required by FASB Statement No. 114 When a Loan Is Restructured in a Troubled Debt Restructuring into Two (or More) Loans Full Text EITF 96-23 (Superseded) The Effect of Financial Instruments Indexed to, and Settled in, a Companys Own Stock on Pooling-of-Interests Accounting for a Subsequent Business Combination Status: Resolved by FAS 141 EITF 95-2 (Superseded) Determination of What Constitutes a Firm Commitment for Foreign Currency Transactions Not Involving a Third Party Status: Nullified by FAS 133 EITF 95-3 (Superseded) Recognition of Liabilities in Connection with a Purchase Business Combination Full Text EITF 95-4 (Superseded) Revenue Recognition on Equipment Sold and Subsequently Repurchased Subject to an Operating Lease Full Text EITF 95-5 (Superseded) Determination of What Risks and Rewards, If Any, Can Be Retained and Whether Any Unresolved Contingencies May Exist in a Sale of Mortgage Loan Servicing Rights Full Text EITF 95-6 (Superseded) Accounting by a Real Estate Investment Trust for an Investment in a Service Corporation Full Text EITF 95-7 (Superseded) Implementation Issues Related to the Treatment of Minority Interests in Certain Real Estate Investment Trusts Full Text EITF 95-8 (Superseded) Accounting for Contingent Consideration Paid to the Shareholders of an Acquired Enterprise in a Purchase Business Combination Full Text EITF 95-9 (Superseded) Accounting for Tax Effects of Dividends in France in Accordance with FASB Statement No. 109 Full Text EITF 95-10 (Superseded) Accounting for Tax Credits Related to Dividend Payments in Accordance with FASB Statement No. 109 Full Text EITF 95-11 (Superseded) Accounting for Derivative Instruments Containing both a Written Option-Based Component and a Forward-Based Component Status: Resolved by FAS 133 EITF 95-12 (Superseded) Pooling of Interests with a Common Interest in a Joint Venture Status: Nullified by FAS 141 EITF 95-14 (Superseded) Recognition of Liabilities in Anticipation of a Business Combination Status: Nullified by FAS 146 EITF 95-15 (Superseded) Recognition of Gain or Loss When a Binding Contract Requires a Debt Extinguishment to Occur at a Future Date for a Specified Amount Status: Superseded by Issue No. 96-19 EITF 95-16 (Superseded) Accounting for Stock Compensation Arrangements with Employer Loan Features under APB Opinion No. 25 Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 95-17 (Superseded) Accounting for Modifications to an Operating Lease That Do Not Change the Lease Classification Full Text EITF 95-18 (Superseded) Accounting and Reporting for a Discontinued Business Segment When the Measurement Date Occurs after the Balance Sheet Date but before the Issuance of Financial Statements Status: Nullified by FAS 144 EITF 95-19 (Superseded) Determination of the Measurement Date for the Market Price of Securities Issued in a Purchase Business Combination Status: Codified in Issue No. 99-12 EITF 95-20 (Superseded) Measurement in the Consolidated Financial Statements of a Parent of the Tax Effects Related to the Operations of a Foreign Subsidiary That Receives Tax Credits Related to Dividend Payments Full Text EITF 95-21 (Superseded) Accounting for Assets to Be Disposed Of Acquired in a Purchase Business Combination Status: Resolved by FAS 144 EITF 95-22 (Superseded) Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements That Include both a Subjective Acceleration Clause and a Lock-Box Arrangement Full Text EITF 95-23 (Superseded) The Treatment of Certain Site RestorationEnvironmental Exit Costs When Testing a Long-Lived Asset for Impairment Full Text EITF 94-1 (Superseded) Accounting for Tax Benefits Resulting from Investments in Affordable Housing Projects Full Text EITF 94-3 (Superseded) Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring) Status: Nullified by FAS 146 EITF 94-4 (Superseded) Classification of an Investment in a Mortgage-Backed Interest-Only Certificate as Held-to-Maturity Status: Resolved by FAS 125 EITF 94-5 (Superseded) Determination of What Constitutes All Risks and Rewards and No Significant Unresolved Contingencies in a Sale of Mortgage Loan Servicing Rights under Issue No. 89-5 Status: Superseded by Issue No. 95-5 EITF 94-6 (Superseded) Accounting for the Buyout of Compensatory Stock Options Status: Nullified by FIN 44 EITF 94-7 (Superseded) Accounting for Financial Instruments Indexed to, and Potentially Settled in, a Companys Own Stock Status: Codified in Issue No. 96-13 EITF 94-8 (Superseded) Accounting for Conversion of a Loan into a Debt Security in a Debt Restructuring Full Text EITF 94-9 (Superseded) Determining a Normal Servicing Fee Rate for the Sale of an SBA Loan Status: Nullified by FAS 125 EITF 94-10 (Superseded) Accounting by a Company for the Income Tax Effects of Transactions among or with Its Shareholders under FASB Statement No.109 Full Text EITF 93-2 (Superseded) Effect of Acquisition of Employer Shares forby an Employee Benefit Trust on Accounting for Business Combinations Status: Resolved by FAS 141 EITF 93-5 (Superseded) Accounting for Environmental Liabilities Status: Incorporated in and effectively nullified by SOP 96-1 EITF 93-6 (Superseded) Accounting for Multiple-Year Retrospectively Rated Contracts by Ceding and Assuming Enterprises Full Text EITF 93-8 (Superseded) Accounting for the Sale and Leaseback of an Asset That Is Leased to Another Party Full Text EITF 93-9 (Superseded) Application of FASB Statement No. 109 in Foreign Financial Statements Restated for General Price-Level Changes Full Text EITF 93-12 (Superseded) Recognition and Measurement of the Tax Benefit of Excess Tax-Deductible Goodwill Resulting from a Retroactive Change in Tax Law Full Text EITF 93-13 (Superseded) Effect of a Retroactive Change in Enacted Tax Rates That Is Included in Income from Continuing Operations Full Text EITF 93-14 (Superseded) Accounting for Multiple-Year Retrospectively Rated Insurance Contracts by Insurance Enterprises and Other Enterprises Full Text EITF 93-16 (Superseded) Application of FASB Statement No. 109 to Basis Differences within Foreign Subsidiaries That Meet the Indefinite Reversal Criterion of APB Opinion No. 23 Full Text EITF 93-17 (Superseded) Recognition of Deferred Tax Assets for a Parent Companys Excess Tax Basis in the Stock of a Subsidiary That Is Accounted for as a Discontinued Operation Full Text EITF 93-18 (Superseded) Recognition of Impairment for an Investment in a Collateralized Mortgage Obligation Instrument or in a Mortgage-Backed Interest-Only Certificate Status: Superseded by Issue No. 99-20 EITF 92-1 (Superseded) Allocation of Residual Value or First-Loss Guarantee to Minimum Lease Payments in Leases Involving Land and Building(s) Full Text EITF 92-2 (Superseded) Measuring Loss Accruals by Transferors for Transfers of Receivables with Recourse Full Text EITF 92-3: Earnings-per-Share Treatment of Tax Benefits for Dividends on Unallocated Stock Held by an Employee Stock Ownership Plan (Consideration of the Implications of FASB Statement No. 109 on Issue 2 of EITF Issue No. 90-4) Full Text EITF 92-4 (Superseded) Accounting for a Change in Functional Currency When an Economy Ceases to Be Considered Highly Inflationary Full Text EITF 92-7 (Superseded) Accounting by Rate-Regulated Utilities for the Effects of Certain Alternative Revenue Programs Full Text EITF 92-8 (Superseded) Accounting for the Income Tax Effects under FASB Statement No. 109 of a Change in Functional Currency When an Economy Ceases to Be Considered Highly Inflationary Full Text EITF 92-9 (Superseded) Accounting for the Present Value of Future Profits Resulting from the Acquisition of a Life Insurance Company Full Text EITF 92-10 (Superseded) Loan Acquisitions involving Table Funding Arrangements Status: Nullified by FAS 125 EITF 92-13 (Superseded) Accounting for Estimated Payments in Connection with the Coal Industry Retiree Health Benefit Act of 1992 Full Text EITF 91-1 (Superseded) Hedging Intercompany Foreign Currency Risks Status: Nullified by FAS 133 EITF 91-2 (Superseded) Debtors Accounting for Forfeiture of Real Estate Subject to a Nonrecourse Mortgage Full Text EITF 91-3 (Superseded) Accounting for Income Tax Benefits from Bad Debts of a Savings and Loan Association Status: Resolved by FAS 109 EITF 91-4 (Superseded) Hedging Foreign Currency Risks with Complex Options and Similar Transactions Status: Resolved by FAS 133 EITF 91-7 (Superseded) Accounting for Pension Benefits Paid by Employers after Insurance Companies Fail to Provide Annuity Benefits Full Text EITF 91-8 (Superseded) Application of FASB Statement No. 96 to a State Tax Based on the Greater of a Franchise Tax or an Income Tax Full Text EITF 90-2 (Superseded) Exchange of Interest-Only and Principal-Only Securities for a Mortgage-Backed Security Status: Nullified by FAS 125 EITF 90-3 (Superseded) Accounting for Employers Obligations for Future Contributions to a Multiemployer Pension Plan Full Text EITF 90-4 (Superseded) Earnings-per-Share Treatment of Tax Benefits for Dividends on Stock Held by an Employee Stock Ownership Plan Full Text EITF 90-6 (Superseded) Accounting for Certain Events Not Addressed in Issue No. 87-11 Relating to an Acquired Operating Unit to Be Sold Status: Nullified by FAS 144 EITF 90-7 (Superseded) Accounting for a Reload Stock Option Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 90-9 (Superseded) Changes to Fixed Employee Stock Option Plans as a Result of Equity Restructuring Status: Nullified by FIN 44 EITF 90-10 (Superseded) Accounting for a Business Combination Involving a Majority-Owned Investee of a Venture Capital Company Status: Resolved by FAS 141 EITF 90-11 (Superseded) Accounting for Exit and Entrance Fees Incurred in a Conversion from the Savings Association Insurance Fund to the Bank Insurance Fund Status: Deemed no longer technically helpful EITF 90-12 (Superseded) Allocating Basis to Individual Assets and Liabilities for Transactions within the Scope of Issue No. 88-16 Full Text EITF 90-14 (Superseded) Unsecured Guarantee by Parent of Subsidiarys Lease Payments in a Sale-Leaseback Transaction Full Text EITF 90-15 (Superseded) Impact of Nonsubstantive Lessors, Residual Value Guarantees, and Other Provisions in Leasing Transactions Status: Nullified by FIN 46 and FIN 46(R) for entities within the scope of FIN 46 or FIN 46(R) Full Text EITF 90-16 (Superseded) Accounting for Discontinued Operations Subsequently Retained Status: Nullified by FAS 144 EITF 90-17 (Superseded) Hedging Foreign Currency Risks with Purchased Options Status: Affirmed by FAS 133 therefore, no longer necessary EITF 90-18 (Superseded) Effect of a quotRemoval of Accountsquot Provision on the Accounting for a Credit Card Securitization Full Text EITF 90-20 (Superseded) Impact of an Uncollateralized Irrevocable Letter of Credit on a Real Estate Sale-Leaseback Transaction Full Text EITF 90-21 (Superseded) Balance Sheet Treatment of a Sale of Mortgage Servicing Rights with a Subservicing Agreement Full Text EITF 89-1 (Superseded) Accounting by a Pension Plan for Bank Investment Contracts and Guaranteed Investment Contracts Status: Resolved by FAS 110 and SOP 94-4 EITF 89-3 (Superseded) Balance Sheet Presentation of Savings Accounts in Financial Statements of Credit Unions Full Text EITF 89-4 (Superseded) Accounting for a Purchased Investment in a Collateralized Mortgage Obligation Instrument or in a Mortgage-Backed Interest-Only Certificate Status: Superseded by Issue No. 99-20 EITF 89-5 (Superseded) Sale of Mortgage Loan Servicing Rights Status: Superseded by Issue No. 95-5 EITF 89-7 (Superseded) Exchange of Assets or Interest in a Subsidiary for a Noncontrolling Equity Interest in a New Entity Status: Codified in Issue No. 01-2 EITF 89-11 (Superseded) Sponsors Balance Sheet Classification of Capital Stock with a Put Option Held by an Employee Stock Ownership Plan Full Text EITF 89-12 (Superseded) Earnings-per-Share Issues Related to Convertible Preferred Stock Held by an Employee Stock Ownership Plan Full Text EITF 89-15 (Superseded) Accounting for a Modification of Debt Terms When the Debtor Is Experiencing Financial Difficulties Status: Superseded by Issue No. 02-4 EITF 89-17 (Superseded) Accounting for the Retail Sale of an Extended Warranty Contract in Connection with the Sale of a Product Status: Nullified by FTB 90-1 EITF 89-18 (Superseded) Divestitures of Certain Investment Securities to an Unregulated Commonly Controlled Entity under FIRREA Full Text EITF 89-19 (Superseded) Accounting for a Change in Goodwill Amortization for Business Combinations Initiated Prior to the Effective Date of FASB Statement No. 72 Full Text EITF 88-1 (Superseded) Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan Full Text EITF 88-3 (Superseded) Rental Concessions Provided by Landlord Status: Resolved by FTB 88-1 and Issues No. 88-10 and 94-3 EITF 88-6 (Superseded) Book Value Stock Plans in an Initial Public Offering Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 88-8 (Superseded) Mortgage Swaps Status: Partially nullified and partially resolved by FAS 133 EITF 88-9 (Superseded) Put Warrants Status: All consensuses nullified by FAS 128, FAS 133, and FAS 150 or superseded by Issue No. 96-13 EITF 88-10 (Superseded) Costs Associated with Lease Modification or Termination Status: Issue 1 resolved by FAS 146 and Issues 2 and 3 nullified by FAS 146 EITF 88-12 (Superseded) Transfer of Ownership Interest as Part of Down Payment under FASB Statement No. 66 Full Text EITF 88-14 (Superseded) Settlement of Fees with Extra Units to a General Partner in a Master Limited Partnership Full Text EITF 88-15 (Superseded) Classification of Subsidiarys Loan Payable in Consolidated Balance Sheet When Subsidiarys and Parents Fiscal Years Differ Full Text EITF 88-17 (Superseded) Accounting for Fees and Costs Associated with Loan Syndications and Loan Participations Status: Partially nullified by FAS 125 and superseded by Issue No. 97-3 EITF 88-20 (Superseded) Difference between Initial Investment and Principal Amount of Loans in a Purchased Credit Card Portfolio Full Text EITF 88-21 (Superseded) Accounting for the Sale of Property Subject to the Sellers Preexisting Lease Full Text EITF 88-26 (Superseded) Controlling Preferred Stock in a Pooling of Interests Status: Nullified by FAS 141 EITF 88-27 (Superseded) Effect of Unallocated Shares in an Employee Stock Ownership Plan on Accounting for Business Combinations Status: Nullified by FAS 141 EITF 87-1 (Superseded) Deferral Accounting for Cash Securities That Are Used to Hedge Rate or Price Risk Status: Resolved by FAS 133 EITF 87-2 (Superseded) Net Present Value Method of Valuing Speculative Foreign Exchange Contracts Status: Nullified by FAS 133 EITF 87-4 (Superseded) Restructuring of Operations: Implications of SEC Staff Accounting Bulletin No. 67 Full Text EITF 87-5 (Superseded) Troubled Debt Restructurings: Interrelationship between FASB Statement No. 15 and the AICPA Savings and Loan Guide Status: Nullified by FAS 114 EITF 87-6 (Superseded) Adjustments Relating to Stock Compensation Plans Status: Nullified by FIN 44 EITF 87-7 (Superseded) Sale of an Asset Subject to a Lease and Nonrecourse Financing: quotWrap Lease Transactionsquot Full Text EITF 87-9 (Superseded) Profit Recognition on Sales of Real Estate with Insured Mortgages or Surety Bonds Full Text EITF 87-11 (Superseded) Allocation of Purchase Price to Assets to Be Sold Status: Nullified by FAS 144 EITF 87-13 (Superseded) Amortization of Prior Service Cost for a Defined Benefit Plan When There Is a History of Plan Amendments Status: Resolved by QampA 87, Question 20 EITF 87-15 (Superseded) Effect of a Standstill Agreement on Pooling-of-Interests Accounting Status: Nullified by FAS 141 EITF 87-16 (Superseded) Whether the 90 Percent Test for a Pooling of Interests Is Applied Separately to Each Company or on a Combined Basis Status: Nullified by FAS 141 EITF 87-17 (Superseded) Spinoffs or Other Distributions of Loans Receivable to Shareholders Status: Codified in Issue No. 01-2 EITF 87-20 (Superseded) Offsetting Certificates of Deposit against High-Coupon Debt Status: Partially resolved by FAS 125 and superseded by Issue No. 96-19 EITF 87-23 (Superseded) Book Value Stock Purchase Plans Status: Issues 1 and 2 nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) and Issue 3 nullified by SOP 93-6 EITF 87-25 (Superseded) Sale of Convertible, Adjustable-Rate Mortgages with Contingent Repayment Agreement Status: Resolved by FAS 125 and FAS 140 EITF 87-26 (Superseded) Hedging of Foreign Currency Exposure with a Tandem Currency Status: Nullified by FAS 133 EITF 87-27 (Superseded) Poolings of Companies That Do Not Have a Controlling Class of Common Stock Status: Nullified by FAS 141 EITF 87-28 (Superseded) Provision for Deferred Taxes on Increases in Cash Surrender Value of Key-Person Life Insurance Status: Resolved by FAS 109 EITF 87-33 (Superseded) Stock Compensation Issues Related to Market Decline Status: Nullified by FIN 44 EITF 86-1 (Superseded) Recognizing Net Operating Loss Carryforwards Status: Nullified by FAS 109 EITF 86-2 (Superseded) Retroactive Wage Adjustments Affecting Medicare Payments Status: Deemed no longer technically helpful EITF 86-3 (Superseded) Retroactive Regulations regarding IRC Section 338 Purchase Price Allocations Status: Deemed no longer technically helpful EITF 86-4 (Superseded) Income Statement Treatment of Income Tax Benefit for Employee Stock Ownership Plan Dividends Status: Nullified by FAS 109 EITF 86-7 (Superseded) Recognition by Homebuilders of Profit from Sales of Land and Related Construction Contracts Full Text EITF 86-10 (Superseded) Pooling with 10 Percent Cash Payout Determined by Lottery Status: Nullified by FAS 141 EITF 86-11 (Superseded) Recognition of Possible 1986 Tax Law Changes Status: Resolved by FAS 109 EITF 86-12 (Superseded) Accounting by Insureds for Claims-Made Insurance Policies Status: Codified in Issue No. 03-8 EITF 86-16 (Superseded) Carryover of Predecessor Cost in Leveraged Buyout Transactions Status: Superseded by Issue No. 88-16 EITF 86-17 (Superseded) Deferred Profit on Sale-Leaseback Transaction with Lessee Guarantee of Residual Value Full Text EITF 86-18 (Superseded) Debtors Accounting for a Modification of Debt Terms Status: Superseded by Issue 96-19 and resolved by Interpretation 39 EITF 86-19 (Superseded) Change in Accounting for Other Postemployment Benefits Status: Resolved by FAS 106 EITF 86-20 (Superseded) Accounting for Other Postemployment Benefits of an Acquired Company Status: Nullified by FAS 106 EITF 86-21 (Superseded) Application of the AICPA Notice to Practitioners regarding Acquisition, Development, and Construction Arrangements to Acquisition of an Operating Property Full Text EITF 86-24 (Superseded) Third-Party Establishment of Collateralized Mortgage Obligations Status: Deemed no longer needed due to issuance of FAS 125 and FAS 140 EITF 86-26 (Superseded) Using Forward Commitments as a Surrogate for Deferred Rate Setting Status: Resolved by FAS 133 EITF 86-27 (Superseded) Measurement of Excess Contributions to a Defined Contribution Plan or Employee Stock Ownership Plan Full Text EITF 86-29 (Superseded) Nonmonetary Transactions: Magnitude of Boot and the Exceptions to the Use of Fair Value Status: Codified in Issue No. 01-2 EITF 86-31 (Superseded) Reporting the Tax Implications of a Pooling of a Bank and a Savings and Loan Association Status: Nullified by FAS 141 EITF 86-32 (Superseded) Early Extinguishment of a Subsidiarys Mandatorily Redeemable Preferred Stock Full Text EITF 86-34 (Superseded) Futures Contracts Used as Hedges of Anticipated Reverse Repurchase Transactions Status: Nullified by FAS 133 EITF 86-35 (Superseded) Debentures with Detachable Stock Purchase Warrants Status: Superseded by Issue No. 96-13 EITF 86-37 (Superseded) Recognition of Tax Benefit of Discounting Loss Reserves of Insurance Companies Status: Nullified by FAS 109 EITF 86-38 (Superseded) Implications of Mortgage Prepayments on Amortization of Servicing Rights Status: Section A nullified by FAS 122 and FAS 125 Section B nullified by FAS 125 Section C superseded by Issue No. 89-4 EITF 86-39 (Superseded) Gains from the Sale of Mortgage Loans with Servicing Rights Retained Status: Nullified by FAS 122 and FAS 125 EITF 86-41 (Superseded) Carryforward of the Corporate Alternative Minimum Tax Credit Status: Nullified by FAS 109 EITF 86-42 (Superseded) Effect of a Change in Tax Rates on Assets and Liabilities Recorded Net-of-Tax in a Purchase Business Combination Status: Nullified by FAS 109 EITF 86-45 (Superseded) Imputation of Dividends on Preferred Stock Redeemable at the Issuers Option with Initial Below-Market Dividend Rate Full Text EITF 86-46 (Superseded) Uniform Capitalization Rules for Inventory under the Tax Reform Act of 1986 Full Text EITF 85-3 (Superseded) Tax Benefits Relating to Asset Dispositions following an Acquisition of a Financial Institution Status: Nullified by FAS 109 EITF 85-4 (Superseded) Downstream Mergers and Other Stock Transactions between Companies under Common Control Status: Resolved by FTB 85-5 EITF 85-5 (Superseded) Restoration of Deferred Taxes Previously Eliminated by Net Operating Loss Recognition Status: Resolved by FAS 109 EITF 85-7 (Superseded) Federal Home Loan Mortgage Corporation Stock Status: Resolved by FTB 85-1 EITF 85-10 (Superseded) Employee Stock Ownership Plan Contribution Funded by a Pension Plan Termination Status: Nullified by FAS 88 EITF 85-11 (Superseded) Use of an Employee Stock Ownership Plan in a Leveraged Buyout Status: Deemed no longer technically helpful EITF 85-14 (Superseded) Securities That Can Be Acquired for Cash in a Pooling of Interests Status: Nullified by FAS 141 EITF 85-15 (Superseded) Recognizing Benefits of Purchased Net Operating Loss Carryforwards Status: Nullified by FAS 109 EITF 85-22 (Superseded) Retroactive Application of FASB Technical Bulletins Status: Deemed no longer technically helpful EITF 85-24 (Superseded) Distribution Fees by Distributors of Mutual Funds That Do Not Have a Front-End Sales Charge Full Text EITF 85-26 (Superseded) Measurement of Servicing Fee under FASB Statement No. 65 When a Loan Is Sold with Servicing Retained Status: Resolved by FTB 87-3 and FAS 125 EITF 85-28 (Superseded) Consolidation Issues Relating to Collateralized Mortgage Obligations Status: Resolved by FAS 94 EITF 85-30 (Superseded) Sale of Marketable Securities at a Gain with a Put Option Status: Resolved by FAS 125 EITF 85-33 (Superseded) Disallowance of Income Tax Deduction for Core Deposit Intangibles Status: Nullified by FAS 109 EITF 85-34 (Superseded) Bankers Acceptances and Risk Participations Status: Resolved by FAS 125 EITF 85-35 (Superseded) Transition and Implementation Issues for FASB Statement No. 86 Status: Deemed no longer technically helpful EITF 85-36 (Superseded) Discontinued Operations with Expected Gain and Interim Operating Losses Status: Nullified by FAS 144 EITF 85-37 (Superseded) Recognition of Note Received for Real Estate Syndication Activities Status: Resolved by SOP 92-1 EITF 85-38 (Superseded) Negative Amortizing Loans Status: Deemed no longer technically helpful EITF 85-39 (Superseded) Implications of SEC Staff Accounting Bulletin No. 59 on Noncurrent Marketable Equity Securities Full Text EITF 85-40 (Superseded) Comprehensive Review of Sales of Marketable Securities with Put Arrangements Full Text EITF 85-41 (Superseded) Accounting for Savings and Loan Associations under FSLIC Management Consignment Program Full Text EITF 85-42 (Superseded) Amortization of Goodwill Resulting from Recording Time Savings Deposits at Fair Values Full Text EITF 85-43 (Superseded) Sale of Subsidiary for Equity Interest in Buyer Status: Resolved by Issue No. 86-29 EITF 85-45 (Superseded) Business Combinations: Settlement of Stock Options and Awards Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF Abstract No. 84-1 (Superseded) 1984 Tax Reform Act: Deferred Income Taxes of Stock Life Insurance Companies Status: Resolved by FAS 109 EITF Abstract No. 84-2 (Superseded) Tax Reform Act of 1984: Deferred Income Taxes Relating to Domestic International Sales Corporations Status: Resolved by FAS 109 EITF 84-6 (Superseded) Termination of Defined Benefit Pension Plans Status: Nullified by FAS 88 EITF 84-7 (Superseded) Termination of Interest Rate Swaps Status: Partially nullified and partially resolved by FAS 133 EITF 84-8 (Superseded) Variable Stock Purchase Warrants Given by Suppliers to Customers Status: Resolved by FAS 123(R) EITF 84-11 (Superseded) Offsetting Installment Note Receivables and Bank Debt (quotNote Monetizationquot) Status: Resolved by FIN 39 EITF 84-12 (Superseded) Operating Leases with Scheduled Rent Increases Status: Nullified by FTB 85-3 EITF 84-13 (Superseded) Purchase of Stock Options and Stock Appreciation Rights in a Leveraged Buyout Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 84-16 (Superseded) Earnings-per-Share Cash-Yield Test for Zero Coupon Bonds Status: Resolved by FAS 85 EITF 84-17 (Superseded) Profit Recognition on Sales of Real Estate with Graduated Payment Mortgages or Insured Mortgages Full Text EITF 84-18 (Superseded) Stock Option Pyramiding Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 84-21 (Superseded) Sale of a Loan with a Partial Participation Retained Status: Resolved by FAS 125 EITF 84-22 (Superseded) Prior Years Earnings per Share following a Savings and Loan Association Conversion and Pooling Status: Resolved by FAS 141 EITF 84-25 (Superseded) Offsetting Nonrecourse Debt with Sales-Type or Direct Financing Lease Receivables Status: Resolved by FTB 86-2 EITF 84-29 (Superseded) Gain and Loss Recognition on Exchanges of Productive Assets and the Effect of Boot Status: Resolved by Issue No. 86-29 EITF 84-30 (Superseded) Sales of Loans to Special-Purpose Entities Status: Resolved by FIN 46 and FIN 46(R) for entities within the scope of FIN 46 or FIN 46(R) EITF 84-33 (Superseded) Acquisition of a Tax Loss Carryforward--Temporary Parent-Subsidiary Relationship Status: Resolved by FAS 144 EITF 84-34 (Superseded) Permanent Discount Restricted Stock Purchase Plans Status: Nullified by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) EITF 84-35 (Superseded) Business Combinations: Sale of Duplicate Facilities and Accrual of Liabilities Full Text EITF 84-38 (Superseded) Identical Common Shares for a Pooling of Interests Status: Nullified by FTB 85-5 EITF 84-39 (Superseded) Transfers of Monetary and Nonmonetary Assets among Individuals and Entities under Common Control Status: Deemed no longer technically helpful EITF 84-40 (Superseded) Long-Term Debt Repayable by a Capital Stock Transaction Status: Issue 1 nullified by FIN 46 and FIN 46(R) and Issue 2 resolved by FAS 150 EITF 84-41 (Superseded) Consolidation of Subsidiary after Instantaneous In-Substance Defeasance Status: Resolved by FAS 94 EITF 84-43 (Superseded) Income Tax Effects of Asset Revaluations in Certain Foreign Countries Status: Nullified by FAS 109 EITF 84-44 (Superseded) Partial Termination of a Defined Benefit Pension Plan Status: Resolved by FAS 88 EITF AbstractsmdashAppendix DmdashOther Technical Matters Topic D-4 (Superseded) Argentine Government Guarantee of U. S. Dollar-Denominated Loans to the Argentine Private Sector Full Text Topic D-6 (Superseded) Income Capital Certificates and Permanent Income Capital Certificates Status: Deemed no longer technically helpful Topic D-7 (Superseded) Adjustment of Deferred Taxes to Reflect Change in Income Tax Rate Status: Resolved by FAS 109 Topic D-12 (Superseded) Foreign Currency TranslationmdashSelection of Exchange Rate When Trading Is Temporarily Suspended Full Text Topic D-13 (Superseded) Transfers of Receivables in Which Risk of Foreign Currency Fluctuation Is Retained Status: Superseded by FAS 125 Topic D-14 (Superseded) Transactions involving Special-Purpose Entities Nullified by FIN 46 and Fin 46(R) for entities within the scope of FIN 46 or FIN 46(R) Full Text Topic D-15 (Superseded) Earnings-per-Share Presentation for Securities Not Specifically Covered by APB Opinion No. 15 Status: Rescinded by the SEC because of the issuance of FAS 128 Topic D-16 (Superseded) Hedging Foreign Currency Risks of Future Net Income, Revenues, or Costs Status: Nullified by FAS 133 Topic D-17 (Superseded) Continued Applicability of the FASB Special Report on Implementation of Statement 96 Status: Resolved by FAS 109 Topic D-18 (Superseded) Accounting for Compensation Expense If Stock Appreciation Rights Are Cancelled Superseded by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) Full Text Topic D-19 (Superseded) Impact on Pooling-of-Interests Accounting of Treasury Shares Acquired to Satisfy Conversions in a Leveraged Preferred Stock ESOP Nullified by FAS 141 Full Text Topic D-20 (Superseded) Disclosure of Components of Deferred Tax Expense Status: Deemed no longer technically helpful Topic D-21 (Superseded) Phase-in Plans When Two Plants Are Completed at Different Times but Share Common Facilities Full Text Topic D-22 (Superseded) Questions Related to the Implementation of FASB Statement No. 105 Status: Nullified by FAS 133 Topic D-25 (Superseded) Application of APB Opinion No. 10, Paragraph 7, to Market Values Recognized for Off-Balance-Sheet Financial Instruments Status: Resolved by FIN 39 Topic D-26 (Superseded) SEC Disclosure Requirements Prior to Adoption of Standard on Accounting for Postretirement Benefits Other Than Pensions Status: Deemed no longer technically helpful Topic D-27 (Superseded) Accounting for the Transfer of Excess Pension Assets to a Retiree Health Care Benefits Account Full Text Topic D-28 (Superseded) SEC Disclosure Requirements Prior to Adoption of Standard on Accounting for Income Taxes Status: Deemed no longer technically helpful Topic D-29 (Superseded) Implementation of FASB Statement No. 107 Status: Deemed no longer technically helpful Topic D-32 (Superseded) Intraperiod Tax Allocation of the Tax Effect of Pretax Income from Continuing Operations Full Text Topic D-33 (Superseded) Timing of Recognition of Tax Benefits for Pre-reorganization Temporary Differences and Carryforwards Full Text Topic D-35 (Superseded) FASB Staff Views on Issue No. 93-6, quotAccounting for Multiple-Year Retrospectively Rated Contracts by Ceding and Assuming Enterprisesquot Full Text Topic D-36 (Superseded) Selection of Discount Rates Used for Measuring Defined Benefit Pension Obligations and Obligations of Postretirement Benefit Plans Other Than Pensions Full Text Topic D-37 (Superseded) Classification of In-Substance Foreclosed Assets Status: Nullified by FAS 114 Topic D-38 (Superseded) Reclassification of Securities in Anticipation of Adoption of FASB Statement No. 115 Status: Deemed no longer technically helpful Topic D-40 (Superseded) Planned Sale of Securities following a Business Combination Expected to Be Accounted for as a Pooling of Interests Superseded by FAS 141 Full Text Topic D-41 (Superseded) Adjustments in Assets and Liabilities for Holding Gains and Losses as Related to the Implementation of FASB Statement No. 115 Full Text Topic D-42 (Superseded) The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock Full Text Topic D-43 (Superseded) Assurance That a Right of Setoff Is Enforceable in a Bankruptcy under FASB Interpretation No. 39 Full Text Topic D-44 (Superseded) Recognition of Other-Than-Temporary Impairment upon the Planned Sale of a Security Whose Cost Exceeds Fair Value Status: Superseded by FSP FAS 115-1124-1 Topic D-45 (Superseded) Implementation of FASB Statement No. 121 for Assets to Be Disposed Of Status: Superseded by FAS 144 Topic D-47 (Superseded) Accounting for the Refund of Bank Insurance Fund and Savings Association Insurance Fund Premiums Full Text Topic D-48 (Superseded) The Applicability of FASB Statement No. 65 to Mortgage-Backed Securities That Are Held-to-Maturity Status: Superseded by FAS 125 Topic D-49 (Superseded) Classifying Net Appreciation on Investments of a Donor-Restricted Endowment Fund Full Text Topic D-50 (Superseded) Classification of Gains and Losses from the Termination of an Interest Rate Swap Designated to Commercial Paper Full Text Topic D-51 (Superseded) The Applicability of FASB Statement No. 115 to Desecuritizations of Financial Assets Full Text Topic D-52 (Superseded) Impact of FASB Statement No. 125 on EITF Issues Status: No longer necessary because the impact of FAS 125 and FAS 140 has been incorporated into relevant STATUS sections Topic D-53 (Superseded) Computation of Earnings per Share for a Period That Includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock Full Text Topic D-54 (Superseded) Accounting by the Purchaser for a Sellerrsquos Guarantee of the Adequacy of Liabilities for Losses and Loss Adjustment Expenses of an Insurance Enterprise Acquired in a Purchase Business Combination Full Text Topic D-56 (Superseded) Accounting for a Change in Functional Currency and Deferred Taxes When an Economy Becomes Highly Inflationary Full Text Topic D-58 (Superseded) Effect on Pooling-of-Interests Accounting of Certain Contingently Exercisable Options to Buy Equity Securities Status: Superseded by Issue No. 97-9 Topic D-59 (Superseded) Payment of a Termination Fee in Connection with a Subsequent Business Combination That Is Accounted for Using the Pooling-of-Interests Method Nullified by FAS 141 Full Text Topic D-60 (Superseded) Accounting for the Issuance of Convertible Preferred Stock and Debt Securities with a Nondetachable Conversion Feature Superseded by Issue No. 98-5 for instruments issued after May 20, 1999 Full Text Topic D-63 (Superseded) Call Options ldquoEmbeddedrdquo in Beneficial Interests Issued by a Qualifying Special-Purpose Entity Status: Nullified by FAS 140 Topic D-64 (Superseded) Accounting for Derivatives Used to Hedge Interest Rate Risk Status: Nullified by FAS 133 Topic D-65 (Superseded) Maintaining Collateral in Repurchase Agreements and Similar Transactions under FASB Statement No. 125 Full Text Topic D-66 (Superseded) Effect of a Special-Purpose Entitys Powers to Sell, Exchange, Repledge, or Distribute Transferred Financial Assets under FASB Statement No. 125 Full Text Topic D-67 (Superseded) Isolation of Assets Transferred by Financial Institutions under FASB Statement No. 125 Full Text Topic D-68 (Superseded) Accounting by an Equity Method Investor for Investee Losses When the Investor Has Loans to and Investments in Other Securities of an Investee Full Text Topic D-69 (Superseded) Gain Recognition on Transfers of Financial Assets under FASB Statement No. 140 Full Text Topic D-71 (Superseded) Accounting Issues Relating to the Introduction of the European Economic and Monetary Union (EMU) Full Text Topic D-72 (Superseded) Effect of Contracts That May Be Settled in Stock or Cash on the Computation of Diluted Earnings per Share Full Text Topic D-73 (Superseded) Reclassification and Subsequent Sales of Securities in Connection with the Adoption of FASB Statement No. 133 Status: Resolved by FAS 133 Topic D-75 (Superseded) When to Recognize Gains and Losses on Assets Transferred to a Qualifying Special-Purpose Entity Status: Superseded by FAS 140 Topic D-76 (Superseded) Accounting by Advisors for Offering Costs Paid on Behalf of Funds, When the Advisor Does Not Receive both 12b-1 Fees and Contingent Deferred Sales Charges Full Text Topic D-77 (Superseded) Accounting for Legal Costs Expected to Be Incurred in Connection with a Loss Contingency Full Text Topic D-79 (Superseded) Accounting for Retroactive Insurance Contracts Purchased by Entities Other Than Insurance Enterprises Status: Codified in Issue No. 03-8 Topic D-81 (Superseded) Accounting for the Acquisition of Consolidated Businesses Status: Rescinded by the SEC Topic D-82 (Superseded) Effect of Preferred Stock Dividends Payable in Common Shares on Computation of Income Available to Common Stockholders Full Text Topic D-84 (Superseded) Accounting for Subsequent Investments in an Investee After Suspension of Equity Method Loss Recognition When an Investor Increases Its Ownership Interest from Significant Influence to Control through a Market Purchase of Voting Securities Full Text Topic D-85 (Superseded) Application of Certain Transition Provisions in SEC Staff Accounting Bulletin No. 101 Full Text Topic D-87 (Superseded) Determination of the Measurement Date for Consideration Given by the Acquirer in a Business Combination When That Consideration Is Securities Other Than Those Issued by the Acquirer Full Text Topic D-90 (Superseded) Grantor Balance Sheet Presentation of Unvested, Forfeitable Equity Instruments Granted to a Nonemployee Full Text Topic D-91 (Superseded) Application of APB Opinion No. 25 and FASB Interpretation No. 44 to an Indirect Repricing of a Stock Option Superseded by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) Full Text Topic D-92 (Superseded) The Effect of FASB Statement No. 135 on the Measurement and Recognition of Net Periodic Benefit Cost under FASB Statements No. 87 and No. 106 Status: Nullified by FAS 145 Topic D-93 (Superseded) Accounting for the Rescission of the Exercise of Employee Stock Options Superseded by FAS 123(R) except for entities within the scope of paragraph 83 of FAS 123(R) Full Text Topic D-94 (Superseded) Questions and Answers Related to the Implementation of FASB Statement No. 140 Status: Superseded by FTB 01-1 Topic D-95 (Superseded) Effect of Participating Convertible Securities on the Computation of Basic Earnings per Share Status: Superseded by Issue No. 03-6 Topic D-99 (Superseded) Questions and Answers Related to Servicing Activities in a Qualifying Special-Purpose Entity under FASB Statement No. 140 Status: No longer necessary because Topic D-99 has been incorporated into FASB Staff Implementation Guides, Questions 22A, 24A, 25AndashB, and 28AndashD in QampA 140 Topic D-100 (Superseded) Clarification of Paragraph 61(b) of FASB Statement No. 141 and Paragraph 49(b) of FASB Statement No. 142 Full Text Topic D-101 (Superseded) Clarification of Reporting Unit Guidance in Paragraph 30 of FASB Statement No. 142 Full Text Topic D-102 (Superseded) Documentation of the Method Used to Measure Hedge Ineffectiveness under FASB Statement No. 133 Full Text Topic D-103 (Superseded) Income Statement Characterization of Reimbursements Received for ldquoOut-of-Pocketrdquo Expenses Incurred Status: Renumbered as Issue No. 01-14 Topic D-104 (Superseded) Clarification of Transition Guidance in Paragraph 51 of FASB Statement No. 144 Full Text Topic D-105 (Superseded) Accounting in Consolidation for Energy Trading Contracts between Affiliated Entities When the Activities of One but Not Both Affiliates Are within the Scope of Issue No. 98-10 Status: Superseded by Issue No. 02-3 Topic D-106 (Superseded) Clarification of QampA No. 37 of FASB Special Report, A Guide to Implementation of Statement 87 on Employersrsquo Accounting for Pensions Status: Superseded by FAS 158 Topic D-109 (Superseded) Determining the Nature of a Host Contract Related to a Hybrid Financial Instrument Issued in the Form of a Share under FASB Statement No. 133 Full TextIf you found this article to be of value, at least 8220like8221 it or the website. Financial management is based on building on a business8217s strengths while striving to overcome its weaknesses. Financial analysis helps answer questions such as: Is the business improving from year to year Have we borrowed too much Are we making a decent return for our shareholders There are a huge number of ratios that can be calculated from a set of financial statements, but fortunately there are only a few that are really meaningful. Ratios are based on the principle that patterns and trends emerge in business, which can be measured, interpreted, and used as guides for action. One should also be aware that in order to compare the ratios of different companies with other companies, with their own history and with the industry averages, the ratios should be calculated in the same manner. It is therefore important to ascertain how the ratios have been calculated. It is not so much the detailed manner that is important in the calculation of ratios than it is the trend of a specific ratio. The return on investment ratio One ratio ranks far above all others in significance. This is the return on investment (ROI) ratio, which measures the return earned by the shareholders of a business on the money they invest. This investment which is sometimes referred to as TOTAL SHAREHOLDERS FUNDS consists of share capital and retained earnings. This ratio measures the all-important business factor, earning power. Analysts may use various other acronyms when referring to this measure: Return on capital(ROC) Return on net assets (RONA) Return on shareholders funds(ROSF) Ratio analysis requires comparison against trends. Standards of comparison are: Comparisons of historic performance against current performance. Comparison against budgets or forecasts. Comparison with other firms. Comparison with industry or national averages. We do not have many published benchmarks for industry ratios in South Africa. A good source is the Bureau for Financial Analysis attached to the University of Pretoria Business School. THE DIFFERENT KINDS OF RATIOS Ratios are classified under five headings: Profitability ratios, which measure the returns generated on sales and investment Liquidity ratios, which judge whether a business is likely to run out of cash in the short term Activity ratios, which measure how well the business is using its assets Leverage ratios, which measure the extent to which a business is using borrowed money Growth ratios, which measure the business8217s rate of growth and assess the potential for future growth GENERAL PRINCIPLES APPLICABLE TO THE USE OF RATIOS Before calculating any ratio, consider what you would expect from the company being analysed, e. g. a company selling perishable commodities should have a rapid stock turnover. Then match expectations to actual performance. This may identify a company which is performing better than it was, but worse than it should be. Look for a trend. A comparison of two years is inconclusive at least 3 years should be analysed. Bear in mind the purpose for which the analysis is being done. Directors, bankers, creditors, and shareholders have different perspectives and use different ratios. Ratio analysis is a theoretical exercise, often done without complete knowledge of trading conditions, company policy, etc. As such, there are dangers to ratio analysis if it is done mechanically . Some of these are: Ratios can only isolate a problem they cannot identify the cause. Analysis is an historical exercise. It is meaningless unless it can give pointers to future performance. Accounting policies can have a material influence on financial statements. When in doubt, ask for expert advice. However, you must first understand your own company8217s accounting policies. Changes in accounting policies could materially affect comparisons from year to year. Financial statements often show historical values for fixed assets such as property. Take the possibility of re-valuation of assets into consideration. There should be different expectations for ratios such as return on assets for companies, which have re-valued property opposed to those companies which have not valued property. The financial year-end may coincide with a period of low activity. This may not be a true reflection of a companys business. This section discusses the different measures of corporate profitability and financial performance. These ratios, much like the operational performance ratios, give users a good understanding of how well the company utilized its resources in generating profit and shareholder value. The long-term profitability of a company is vital for both the survivability of the company as well as the benefit received by shareholders. It is these ratios that can give insight into the all important 8220profit. Bear in mind though, that profit does not equal cash, given your understanding of the cash flow statement. In this section, we will look at four important profit margins, which display the amount of profit a company generates on its sales at the different stages of an income statement. The last three ratios covered in this section 8211 Return on Assets, Return on Equity, and Return on Capital Employed 8211 explain how effective a company is at generating income from its resources. Profitability ratios tell us how well a firm is being managed. The ultimate measure of a business8217s success is the rate at which it makes profits from its activities. Profitability is measured in three ways: Relative to investment (i. e. for every Rand of shareholders8217 money invested in the business, how much profit did we make) Relative to assets (i. e. for every Rand of assets of the business, how much profit did we make) Relative to sales (i. e. for every Rand of sales, how much profit did we make) In the income statement, there are four levels of profit or profit margins 8211 gross profit, operating profit, pre-tax profit and net profit. The term 8220margin8221 can apply to the absolute number for a given profit level andor the number as a percentage of net salesrevenues. Profit margin analysis uses the percentage calculation to provide a comprehensive measure of a company8217s profitability on a historical basis (3-5 years) and in comparison to peer companies and industry benchmarks. Basically, it is the amount of profit (at the gross, operating, pre-tax or net income level) generated by the company as a percent of the sales generated. The objective of margin analysis is to detect consistency or positivenegative trends in a company8217s earnings. Positive profit margin analysis translates into positive investment quality. To a large degree, it is the quality, and growth, of a company8217s earnings that drive its share price. In order to calculate the ratios, we will be using the financial statements of Pick n Pay for the year ending 28 February 2007. Gross Profit Margin Gross Profit Net Sales (Revenue) Operating Profit Margin Operating Profit (EBIT) Net Sales (Revenue)Pre-tax Profit Margin Profit Before Tax Net Sales (Revenue) Net Profit Margin Profit After tax Net Sales (Revenue) Gross Profit Margin 6 893.9 39 337.1 17.53 Operating Profit Margin 1 328.8 39 337.1 3.38 Pre-tax Profit Margin 1 205.3 39 337.1 3.06 Net Profit Margin 675.6 39 337.1 1.72 All the Rand amounts in these ratios are found in the income statement of 2007 of Pick n Pay. As of February 28, 2007, with amounts expressed in millions, Pick n Pay had net sales, or revenue, of R39 337.1, which is the denominator in all of the profit margin ratios. The numerators for Pick n Pays ratios are captioned as 8220gross profit8221, 8220operating profit8221, 8220profit before tax, and profit for the year, respectively. By simply dividing, the equations give us the percentage profit margins indicated. It is important to remember that these ratios by themselves mean very little. You need to calculate the ratios for previous years as well and compare them, as well as against the budget figures set for the company, the industry averages, and the ratios for the competitors. First, a few remarks about the mechanics of these ratios are in order. When it comes to finding the relevant numbers for margin analysis, readers are reminded that the terms: 8220income, 8220profits8221 and 8220earnings8221 are used interchangeably in financial reporting. Also, the account captions for the various profit levels can vary, but generally are self-evident no matter what terminology is used. Second, income statements in the multi-step format clearly identify the four profit levels. However, with the single-step format the investor must calculate the gross profit and operating profit margin numbers. To obtain the gross profit amount, simply subtract the cost of sales from net salesrevenues. The operating profit amount is obtained by subtracting the sum of the company8217s operating expenses from the gross profit amount. Generally, operating expenses would include such account captions as selling, marketing and administrative, research and development, depreciation and amortization, rental properties, etc. Third, investors need to understand that the absolute numbers in the income statement don8217t tell us very much, which is why we must look to margin analysis to discern a company8217s true profitability. These ratios help us to keep score, as measured over time, of management8217s ability to manage costs and expenses and generate profits. The success, or lack thereof, of this important management function is what determines a company8217s profitability. A large growth in sales will do little for a company8217s earnings if costs and expenses grow disproportionately. Lastly, the profit margin percentage for all the levels of income can easily be translated into a handy metric used frequently by analysts and often mentioned in investment literature. The ratio8217s percentage represents the number of cents there are in each Rand of sales. For example, using Pick n Pays numbers, in every sales Rand for the company in 2007, there8217s roughly 17.5 cents, 3.38 cents, 3.06 cents, and 1.72 cents of gross, operating, pre-tax, and net income, respectively. Let8217s look at each of the profit margin ratios individually: Gross Profit Margin 8211 A company8217s cost of sales, or cost of goods sold, represents the expense related to labour, raw materials and manufacturing overhead involved in its production process. This expense is deducted from the company8217s net salesrevenue, which results in a company8217s first level of profit, or gross profit. The gross profit margin is used to analyze how efficiently a company is using its raw materials, labour and manufacturing-related fixed assets to generate profits. A higher margin percentage is a favourable profit indicator. Gross profit is the reverse of the mark-up, which is the percentage added to cost to obtain the selling price. Industry characteristics of raw material costs, particularly as these relate to the stability or lack thereof, have a major effect on a company8217s gross margin. Generally, management cannot exercise complete control over such costs. Companies without a production process (e. g. retailers and service businesses) don8217t have a cost of sales exactly. In these instances, the expense is recorded as a 8220cost of merchandise8221 and a 8220cost of services,8221 respectively. A company plans for its gross profit, by taking its cost of sales and adding to that, its margin. Therefore, should it sell its goods at the determined price, it should deliver the gross profit margin as calculated. Should this margin differ from the planned margin, various factors need to be investigated. Reasons for these changes can include: Theft of stock or cash sales. Changes in sales mix. Increases in discounts given to customers. Stock write-offs. Failure to pass on cost increases to customers. Errors in stock count or stock valuation. A gross profit percentage, which is consistent from year to year, may not in itself be acceptable. Detailed analysis of gross profit by product line or by customer may indicate a dangerous bias toward unprofitable lines or exposure to a particular customer. Irrespective of which of these factors played a role, the variance needs to be investigated, as it frequently reflects upon inventory that is stolen by customers and staff. This happened to Shoprite a few years ago when about R100 million of inventory were stolen by management in collusion with suppliers. Operating Profit Margin 8211 By subtracting selling, general and administrative (SGampA), or operating, expenses from a company8217s gross profit number, we get operating income. Management has much more control over operating expenses than its cost of sales outlays. Therefore investors need to scrutinize the operating profit margin carefully. Positive and negative trends in this ratio are, for the most part, directly attributable to management decisions. A company8217s operating income figure is often the preferred metric (deemed to be more reliable) of investment analysts, versus its net income figure, for making inter-company comparisons and financial projections. Pre-tax Profit Margin 8211 Many investment analysts prefer to use a pre-tax income number for reasons similar to those mentioned for operating income. A company has access to a variety of tax-management techniques, which allow it to manipulate the timing and magnitude of its taxable income. Net Profit Margin 8211 The so-called bottom line is the most often mentioned when discussing a company8217s profitability. While undeniably an important number, investors can easily see from a complete profit margin analysis that there are several income and expense operating elements in an income statement that determine a net profit margin. It behoves investors to take a comprehensive look at a company8217s profit margins on a systematic basis. Profit management is about: A good system which captures. classifies and records transaction data Measurement and analysis of profitability by product line, customer and geographic area Regular and timely management reporting Iron fisted management review and control How to Manage With Your Management Accounts Top executives use the review process to spark off discussions on a broad range of related topics. Some learning points picked up from watching leading players in action: Structure your management reports to show responsibility accounting Spend your time on the big numbers first Understand the key ratios, measures and benchmarks for this industry Distinguish clearly between the hard and the soft numbers Know where the fat is hidden Quantify the link between capacity utilisation and profitability Understand your breakeven economics Distinguish clearly between expenses of today, yesterday, and of tomorrow Understand your capital vs revenue policy Look at the bases of stock and asset valuation (why do we do it this way) Distinguish between real profits and inflation (stock) profits Show graphs instead of figures The start point for analysing trading profitability is called common sizing. In order to understand a company8217s business model and determine trends, we restate the income statement figures relative to sales being 100, both horizontally and vertically. For Pick n Pay, such a common sized statement could look as follows (only selected figures in practice this should be done for all the lines in the income statement): From this common sized balance sheet it is clear that Pick n Pay has been using creditors (accounts payable) as a major strategy in its capital structure. What do the profitability ratios of Pick n Pay look like for the previous two years, and how do they compare against the same ratios of ShopriteCheckers and those of the industry This ratio indicates how profitable a company is relative to its total assets. The return on assets (ROA) ratio illustrates how well management is employing the company8217s total assets to make a profit. The higher the return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by comparing operating profit (EBIT) to average total assets, and is expressed as a percentage. Return on Assets EBIT Average Total Assets (I prefer personally to use just that use figure and not the average of the last 2 years 8211 it is just easier to calculate) As of 28 February 2007, with amounts expressed in millions, Pick n Pay had an EBIT of R1254.6 (income statement), and average total assets of R7279.95 (balance sheet). By dividing, the equation gives us an ROA of 17.23 for FY 2007. Some investment analysts use the net income figure instead of the operating income figure when calculating the ROA ratio. The need for investment in current and non-current assets varies greatly among companies. Capital-intensive businesses (with a large investment in fixed assets) are going to be more asset heavy than technology or service businesses. In the case of capital-intensive businesses, which have to carry a relatively large asset base, will calculate their ROA based on a large number in the denominator of this ratio. Conversely, non-capital-intensive businesses (with a small investment in fixed assets) will be generally favoured with a relatively high ROA because of a low denominator number. It is precisely because businesses require different-sized asset bases that investors need to think about how they use the ROA ratio. For the most part, the ROA measurement should be used historically for the company being analyzed. If peer company comparisons are made, it is imperative that the companies being reviewed are similar in product line and business type. Simply being categorized in the same industry will not automatically make a company comparable. As a rule of thumb, investment professionals like to see a company8217s ROA come in at no less than 5. Of course, there are exceptions to this rule. An important one would apply to banks, which strive to record an ROA of 3 or above. How does the 2007 ROA figure of Pick n Pay compare with that of the 2 years prior to 2007, as well as with the figure for Shoprite and the industry average This ratio indicates how profitable a company is by comparing its net income to its average shareholders8217 equity. The return on equity ratio (ROE) measures how much the shareholders earned for their investment in the company. The higher the ratio percentage, the more efficient management is in utilizing its equity base and the better the return is to investors. Return on Equity Profit after tax Average Shareholders8217 Equity Return on Equity 675.6 ((854.91015.4)2) 72.25 As of 28 February 2007, with amounts expressed in millions, Pick n Pay had net income of R675.6 (income statement), and average shareholders8217 equity of R935.2 (balance sheet). By dividing, the equation gives us an ROE of 72.25 for FY 2007. Pick n Pay used headline earnings to calculate this figure and arrived at a ROE of 88.1. If the company has issued preferred stock, investors wishing to see the return on just common equity may modify the formula by subtracting the preferred dividends, which are not paid to common shareholders, from net income and reducing shareholders8217 equity by the outstanding amount of preferred equity. Widely used by investors, the ROE ratio is an important measure of a company8217s earnings performance. The ROE tells common shareholders how effectively their money is being employed. Peer company, industry and overall market comparisons are appropriate however, it should be recognized that there are variations in ROEs among some types of businesses. In general, financial analysts consider return on equity ratios in the 15-20 range as representing attractive levels of investment quality. Pick n Pay and other food retail companies need to be seen in context. While highly regarded as a profitability indicator, the ROE metric does have a recognized weakness. Investors need to be aware that a disproportionate amount of debt in a company8217s capital structure would translate into a smaller equity base. Thus, a small amount of net income (the numerator) could still produce a high ROE off a modest equity base (the denominator). In the case of food retail companies such as Pick n Pay and Shoprite, there is a big difference between the ROA and the ROE. This is exactly what is referred to in the previous example. Normally this would indicate a very high level of debt in the capital structure of the company. In the food retail companies, however, it normally reflects upon the use of creditors as an important, and free, source of funding for the assets. The lesson here for investors is that they cannot look at a company8217s return on equity in isolation. A high, or low, ROE needs to be interpreted in the context of a company8217s debt-equity relationship. The answer to this analytical dilemma can be found by using the return on capital employed (ROCE) ratio. The Return on Capital Employed The return on capital employed (ROCE) ratio, expressed as a percentage, complements the return on equity (ROE) ratio by adding a company8217s debt liabilities, or funded debt, to equity to reflect a company8217s total 8220capital employed8221. This measure narrows the focus to gain a better understanding of a company8217s ability to generate returns from its available capital base. By comparing net income to the sum of a company8217s debt and equity capital, investors can get a clear picture of how the use of leverage impacts a company8217s profitability. Financial analysts consider the ROCE measurement to be a more comprehensive profitability indicator because it gauges management8217s ability to generate earnings from a company8217s total pool of capital. ROCE Net Income Capital Employed Capital Employed Average Debt Liabilities Average Shareholders8217 Equity As of 28 February 2007, with amounts expressed in millions, Pick n Pay had net income of R675.6 (income statement). The company8217s average short-term and long-term borrowings were R822.25 and the average shareholders8217 equity was R935.15 (all the necessary figures are in the 2007 balance sheet), the sum of which, R1757.4 is the capital employed. By dividing, the equation gives us an ROCE of 38.4 for FY 2007. Often, financial analysts will use operating income (EBIT) as the numerator. There are various takes on what should constitute the debt element in the ROCE equation, which can be quite confusing. Our suggestion is to stick with debt liabilities that represent interest-bearing, documented credit obligations (short-term borrowings, current portion of long-term debt, and long-term debt) as the debt capital in the formula. The return on capital employed is an important measure of a company8217s profitability. Many investment analysts think that factoring debt into a company8217s total capital provides a more comprehensive evaluation of how well management is using the debt and equity it has at its disposal. Investors would be well served by focusing on ROCE as a key, if not the key, factor to gauge a company8217s profitability. An ROCE ratio, as a very general rule of thumb, should be at or above a company8217s average borrowing rate. Unfortunately, there are a number of similar ratios to ROCE, as defined herein, that are similar in nature but calculated differently, resulting in dissimilar results. First, the acronym ROCE is sometimes used to identify return on common equity, which can be confusing because that relationship is best known as the return on equity or ROE. Second, the concept behind the terms return on invested capital (ROIC) and return on investment (ROI) portends to represent 8220invested capital8221 as the source for supporting a company8217s assets. However, there is no consistency to what components are included in the formula for invested capital, and it is a measurement that is not commonly used in investment research reporting. You can improve a companys profitability in two ways, i. e. by selling more and spending the same or selling the same whilst spending less. According to Norton and Kaplan, this translates into improving a companys financial performance by revenue growth andor productivity. In order to generate profitable revenue growth, companies can: Deepen their relationships with their existing customers, enabling increased - and cross sales. Offer new products. Sell to customers in othernew segments. Productivity improvements can be achieved through: Reducing costs by lowering direct and indirect expenses. More efficient use of financial and physical assets in order to reduce fixed and working capital needs. Your business must be able to meet its short-term debts when they fall due. Many profitable businesses have failed because they grant too much credit to customers and then cannot pay salaries and suppliers without going over their overdraft limits. Bankers are paid to ensure that their clients can repay their loans, and so can be expected to be conservative in their lending. Two financial ratios, the Current Ratio and the Acid Test ratio (also referred to as the quick ratio) . were developed by bankers in America early in the last century, as criteria for lending money. The benchmarks were: a Current ratio of 2:1 and an Acid Test ratio of 1:1, but the acceptable ratio will vary depending on the type of industry in which your company operates, and the banker8217s judgement of the realisability of your stocks and debtors. Current Ratio: Current Assets Current Liabilities Acid Test Ratio: (Current Assets Stock) Current Liabilities In a liquidity crisis, the banks normally first issue a warning to reduce the overdraft to acceptable levels. To do this, a emergency reduction in stock and debtors is often required. At 2: 1, the current ratio represents a 50 (1:2) discount on the face value of stock and debtors under duress. Bankers would thus judge a 3:1 current ratio to be safer than a 2:1 ratio, all things being equal. However, we need to see this ratio in the context of the industry in which the company finds itself. The logic of the current ratio is based on security, and is in direct conflict with normal business practice, where we want to operate with a minimum level of stocks and debtors. Guard against accepting the current ratio as being the ultimate test for liquidity. When one identifies the component elements of the current ratio, it is obvious that it can be increased by increasing debtors andor stock, both which could be bad for cash flow. One therefore needs to look at the current ratio in context. In practice, the current ratio reflects your business model and terms of trade. The current ratio is a popular financial ratio used to test a company8217s liquidity (also referred to as its current or working capital position) by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company8217s short-term assets (cash, cash equivalents, marketable securities, receivables and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). In theory, the higher the current ratio, the better. The data for the calculation of both the current ratio and the acid test ratio is derived from the balance sheet, and more specifically the current assets and the current liabilities. Current Ratio Current Assets Current Liabilities Current Ratio R4020.2 R5882.5 0.68 As of 28 February 2007, with amounts expressed in millions, Pick n Pays current assets amounted to R4 020.2 (balance sheet), which is the numerator while current liabilities amounted to R5882.5 (balance sheet), which is the denominator. By dividing, the equation gives us a current ratio of 0.68. The current ratio is used extensively in financial reporting. However, while easy to understand, it can be misleading in both a positive and negative sense 8211 i. e. a high current ratio is not necessarily good, and a low current ratio is not necessarily bad (see chart below). Here8217s why: Contrary to popular perception, the current ratio, as an indicator of liquidity, is flawed because it8217s conceptually based on the liquidation of all of a company8217s current assets to meet all of its current liabilities. In reality, this is not likely to occur. Investors have to look at a company as a going concern. It is the time it takes to convert a company8217s working capital assets into cash to pay its current obligations that is the key to its liquidity. In a word, the current ratio can be misleading. A simplistic, but accurate, comparison of two companies8217 current position will illustrate the weakness of relying on the current ratio or a working capital number (current assets minus current liabilities) as a sole indicator of liquidity: Company ABC looks like an easy winner in a liquidity contest. It has an ample margin of current assets over current liabilities, a seemingly good current ratio, and working capital of R300. Company XYZ has no current assetliability margin of safety, a weak current ratio, and no working capital. However, to prove the point, what if: (1) both companies8217 current liabilities have an average payment period of 30 days (2) Company ABC needs six months (180 days) to collect its account receivables, and its inventory turns over just once a year (365 days) and (3) Company XYZ is paid cash by its customers, and its inventory turns over 24 times a year (every 15 days). In this contrived example, Company ABC is very illiquid and would not be able to operate under the conditions described. Its bills are coming due faster than its generation of cash. You can8217t pay accounts with working capital you pay accounts with cash Company8217s XYZ8217s seemingly tight current position is, in effect, much more liquid because of its quicker cash conversion. Company XYZ is a proxy for the food retail companies such as Pick n Pay and ShopriteCheckers. When looking at the current ratio, it is important that a company8217s current assets can cover its current liabilities however, investors should be aware that this is not the whole story on company liquidity. Try to understand the types of current assets the company has and how quickly these can be converted into cash to meet current liabilities. This important perspective can be seen through the cash conversion cycle (See the section on Activity Ratios). By digging deeper into the current assets, you will gain a greater understanding of a company8217s true liquidity. Lets get back to the current ratio of Pick n Pay for 2007. The norm has been stated as 2. The idea is that it leaves the company with the same amount than the current liabilities once it has paid off its current liabilities, to be used as working capital. Food retail companies are unique. They do not have debtors as they work on a cash basis. They also sell off their stock quite fast. They then take up to 60 days on average to pay their creditors. This means they have no working capital requirement. Indeed, we will later see they use creditors to finance a substantial portion of their assets. It also means that they get away with a current ratio of less than 1, and are still in a great liquidity position, contrary to popular belief. What does the current ratio for the previous two years look like for Pick n Pay and how does this compare with the industry average and with the ratio for ShopriteCheckers What components in the current assets and current liabilities changed to bring about the change in the current ratio, and what does this mean for the company in general The Acid Test Ratio The quick ratio 8211 aka the quick assets ratio or the acid-test ratio 8211 is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are more difficult to turn into cash. Therefore, a higher ratio means a more liquid current position. Acid Test Ratio (Current Assets 8211 Stock) Current Liabilities As of 28 February 2007, with amounts expressed in millions, Pick n Pays8217 quick assets amounted to R1652.8 (balance sheet) while current liabilities amounted to R5882.5 (balance sheet). By dividing, the equation gives us a quick ratio of 0.28. Some presentations of the quick ratio calculate quick assets (the formula8217s numerator) by simply subtracting the inventory figure from the total current assets figure. The assumption is that by excluding relatively less-liquid (harder to turn into cash) inventory, the remaining current assets are all of the more-liquid variety. Generally, this is close to the truth, but not always. XYZ Holdings is a good example of what can happen if you take the aforementioned 8220inventory shortcut8221 to calculating the quick ratio: Standard Approach: R233.2 plus R524.2 R756 R606.9 1.3 Shortcut Approach: R1,575.6 minus R583.7 R991.9 R606.9 1.6 Restricted cash, prepaid expenses and deferred income taxes do not pass the test of truly liquid assets. Thus, using the shortcut approach artificially overstates XYZ Holdings8217 more liquid assets and inflates its quick ratio. As previously mentioned, the quick ratio is a more conservative measure of liquidity than the current ratio as it removes inventory from the current assets used in the ratio8217s formula. By excluding inventory, the quick ratio focuses on the more-liquid assets of a company. The basics and use of this ratio are similar to the current ratio in that it gives users an idea of the ability of a company to meet its short-term liabilities with its short-term assets. Another beneficial use is to compare the quick ratio with the current ratio. If the current ratio is significantly higher, it is a clear indication that the company8217s current assets are dependent on inventory. In the case of Pick n Pay, the current ratio was 0.68, with the quick ratio 0.28. This is an indication that inventory is a major component of current assets. While considered more stringent than the current ratio, the quick ratio, because of its accounts receivable component, suffers from the same deficiencies as the current ratio 8211 albeit somewhat less. To understand these 8220deficiencies8221, readers should refer to the commentary section of the Current Ratio. In brief, both the quick and the current ratios assume a liquidation of accounts receivable and inventory as the basis for measuring liquidity. While theoretically feasible, as a going concern a company must focus on the time it takes to convert its working capital assets to cash 8211 that is the true measure of liquidity. Thus, if accounts receivable (debtors), as a component of the quick ratio, have, let8217s say, a conversion time of several months rather than several days, the 8220quickness8221 attribute of this ratio is questionable. Investors need to be aware that the conventional wisdom regarding both the current and quick ratios as indicators of a company8217s liquidity can be misleading. The cash ratio is an indicator of a company8217s liquidity that further refines both the current ratio and the quick ratio by measuring the amount of cash, cash equivalents, or invested funds there are in current assets to cover current liabilities. Cash Ratio (Cash Cash equivalents Invested Funds) Current Liabilities Cash Ratio 709.1 5882.5 0.121 As of December 31, 2008, with amounts expressed in millions, Pick n Pays cash assets amounted to R709.1 (balance sheet) while current liabilities amounted to R5882.5 (balance sheet). By dividing, the equation gives us a cash ratio of 0.121. The cash ratio is the most stringent and conservative of the three short-term liquidity ratios (current, quick and cash). It only looks at the most liquid short-term assets of the company, which are those that can be most easily used to pay off current obligations. It also ignores inventory and receivables, as there are no assurances that these two accounts can be converted to cash in a timely matter to meet current liabilities. Very few companies will have enough cash and cash equivalents to fully cover current liabilities, which is not necessarily a bad thing, so do not focus on this ratio being above 1:1. The cash ratio is seldom used in financial reporting or by analysts in the fundamental analysis of a company. It is not realistic for a company to purposefully maintain high levels of cash assets to cover current liabilities. The reason being that it8217s often seen as poor asset utilization for a company to hold large amounts of cash on its balance sheet, as this money could be returned to shareholders or used elsewhere to generate higher returns. While providing an interesting liquidity perspective, the usefulness of this ratio is limited. Methods of Improving Cash Flow Tighter credit terms (Less time for your debtors to pay your invoice) Reduce stock levels Delay payment to suppliers Forecast cash flows Invoice promptly Improve supplier contract terms Expense controls Regular deposits The ratios which measure how well a firm uses its assets, all involve comparison between the level of sales and the investment in various asset accounts, particularly current assets. Every business should try to minimise the value of assets it uses to generate income i. e. generate more turnover, using less assets. By doing so it will: reduce borrowings reduce interest charges increase return on capital It would have been great to do everything without the need for any investment in any asset. However, the real world does not work that way, and companies therefore need to ensure that they optimise the productivity of their assets. The overall measure of asset efficiency is the ratio of Sales to Total Assets. This figure shows the amount of sales the company can generate for every R1 in total assets. By analysing the trend of this ratio, one can determine whether the assets the company is acquiring are productive assets or not, or whether it is taking some time for the assets to kick in. Formula . Turnover Total Assets Components . 39 337.1 7 793.0 5.05 Variation: Some analysts use Fixed Assets in the denominator rather than total assets. Commentary . This figure indicates that for every R1 in total assets, Pick n Pay has generated turnover to the value of R5.05. This is an indication that Pick n Pay is not a capital intensive company, as the mining groups and groups that include hotel chains, are much more capital intensive and require much more assets to generate similar levels of turnover. It is therefore important to understand the industry the company is competing in before any judgement is made on the basis of this ratio. This ratio would show that new assets acquired either are kicking in, or are late at kicking in, or will never kick in and should not have been acquired in the first place. Debtors Period (see cash conversion cycle) The tool for measuring debtor efficiency is the DEBTORS AGE ANALYSIS. Factors that may alert an experienced credit controller to potential default include: Amounts in excess of allowed terms i. e. over 30 days Amounts in excess of credit limit Payments in round amounts Excessive queries and delays Rapidly growing purchases Swings (high-lows) in purchase patterns Customer operates in a risky industry Many people are most comfortable expressing their outstanding debtors in terms of a TIME-RELATED benchmark e. g. a 45-day book. The ratio can be calculated in various ways. These ratios should be considered relative to the firm8217s standard credit terms Creditors Period (see cash conversion cycle) This period refers to the number of days you take to pay your creditors. It is good cash management to extend this period as long as possible. However, it is not always easy to do this, as your suppliers might be very large and influential. They could therefore dictate credit terms and you would have no other option but to comply. Companies such as Pick n Pay would have some suppliers that they would need to pay soon, whilst there would be others that they would take quite a while to pay. It is never a good thing to pay an invoice on receipt, but rather to wait and pay on the date specified. Stock management ratios (see cash conversion cycle) There are significant costs associated with holding excess stock. Warehousing 8211 rent. systems. staff. equipment Interest 8211 on money tied up in stocks Insurance Obsolescence. wastage. shrinkage (theft of stock by employees and customers) These costs are normally not easy to identify as they are either included under general headings (like salaries) or not specifically highlighted (physical stock counts, thereby automatically excluding shrinkage). Many private companies are handicapped when evaluating stock efficiency due to lack of timely, regular and accurate information. Factors which adversely affect stock turn are: Bad buying (buying stock that customers don8217t want 8211 poor merchandising) Poor storekeeping Accumulation of slow moving product lines Poor co-ordination between sales and production Slow delivery e. g. imports Depressed trading conditions Raw materials, work in progress and finished goods can be analysed separately. This is relevant to manufacturing companies. Significant advances have been made in stock reduction through applied logistics and related approaches such as Just-in-time and World Class Manufacturing. Just-in-time amp Elimination of waste Just In Time can be summed up as an all-out attack on waste. Seven major categories of waste are recognised: Processing operations which add no value to a product Inventory in excess of immediate needs Over-production to keep people or machines busy Transportation beyond minimum requirements Unnecessary motions by people or equipment Waiting and delays Defective materials at all stages of production The law of large numbers: From a financial viewpoint, stock management should concentrate on your high value items. The working capital cycle This is the ratio analysts use to review the overall effectiveness of your working capital management. It combines the 3 major elements, namely stock, debtors and creditors, which were described above. Reducing the working capital cycle is one of the most effective ways of raising money for your business. Reduction in stocks and debtors can have dramatic and unexpected beneficial results, impacting profits, overdrafts and return on investment. Other ways in which a business can raise money are: Making profits Issuing shares Borrowing money Selling assets Calling in loans previously granted THE CASH CONVERSION CYCLE This liquidity metric expresses the length of time (in days) that a company uses to sell inventory (inventory period or stock period), collect receivables (debtors period or accounts receivable period), and pay its accounts payable (creditors period). The cash conversion cycle (CCC) measures the number of days a company8217s cash is tied up in the production and sales process of its operations and the benefit it gets from payment terms from its creditors. The shorter this cycle, the more liquid the company8217s working capital position is. The CCC is also known as the 8220cash8221 cycle. Debtor8217s Period Stock Period 8211 Creditor8217s Period. The Debtor8217s Period Stock Period is an indication of the duration of your operating period. Dividing the cost of sales (income statement) by 365 to get a cost of sales per day figure Calculating the average inventory figure by adding the year8217s beginning (previous yearend amount) and ending inventory figure (both are in the balance sheet) and dividing by 2 to obtain an average amount of inventory for any given year and Dividing the average inventory figure by the cost of sales per day figure. For Pick n Pays FY 2007 (in R millions), its DIO would be computed with these figures: (1) cost of sales per day 32443.2 365 88.885 The negative number indicates that Pick n Pay has no need for any additional external sources of working capital as it funds its operating cycle with creditors. This also indicates that it can basically grow at any rate it wants to without any fear of running into working capital problems. This is typical of the food retail industry. How would this compare with the situation in the retail clothing industry where Edcon is a major player Often the components of the cash conversion cycle 8211 DIO, DSO and DPO 8211 are expressed in terms of turnover as a times (x) factor. For example, in the case of Pick n Pay, its days inventory outstanding of 25 days would be expressed as turning over 14.6x annually (365 days 25 days 14.6 times). However, actually counting days is more literal and easier to understand when considering how fast assets turn into cash. An often-overlooked metric, the cash conversion cycle is vital for two reasons. First, it8217s an indicator of the company8217s efficiency in managing its important working capital assets Second, it provides a clear view of a company8217s ability to pay off its current liabilities. It does this by looking at how quickly the company turns its inventory into sales, and its sales into cash, which is then used to pay its suppliers for goods and services. Again, while the quick and current ratios are more often mentioned in financial reporting, investors would be well advised to measure true liquidity by paying attention to a company8217s cash conversion cycle. The longer the duration of inventory on hand and of the collection of receivables, coupled with a shorter duration for payments to a company8217s suppliers, means that cash is being tied up in inventory and receivables and used more quickly in paying off trade payables. If this circumstance becomes a trend, it will reduce, or squeeze, a company8217s cash availabilities. Conversely, a positive trend in the cash conversion cycle will add to a company8217s liquidity. By tracking the individual components of the CCC (as well as the CCC as a whole), an investor is able to discern positive and negative trends in a company8217s all-important working capital assets and liabilities. For example, an increasing trend in DIO could mean decreasing demand for a company8217s products. Decreasing DSO could indicate an increasingly competitive product, which allows a company to tighten its buyers8217 payment terms. As a whole, a shorter CCC means greater liquidity, which translates into less of a need to borrow, more opportunity to realize price discounts with cash purchases for raw materials, and an increased capacity to fund the expansion of the business into new product lines and markets. Conversely, a longer CCC increases a company8217s cash needs and negates all the positive liquidity qualities just mentioned. Current Ratio versus the CCC The obvious limitations of the current ratio as an indicator of true liquidity clearly establish a strong case for greater recognition, and use, of the cash conversion cycle in any analysis of a company8217s working capital position. Nevertheless, corporate financial reporting, investment literature and investment research services seem to be stuck on using the current ratio as an indicator of liquidity. The current ratio seems to occupy a similar position with the investment community regarding financial ratios that measure liquidity. However, it will probably work better for investors to pay more attention to the cash-cycle concept as a more accurate and meaningful measurement of a company8217s liquidity. Before discussing the various financial debt ratios, we need to clear up the terminology used with 8220debt8221 as this concept relates to financial statement presentations. There are two types of liabilities 8211 operational and debt. The former includes balance sheet accounts, such as accounts payable, accrued expenses, taxes payable, pension obligations, etc. The latter includes notes payable and other short-term borrowings, the current portion of long-term borrowings, and long-term borrowings. Often, in investment literature, 8220debt8221 is used synonymously with total liabilities. In other instances, it only refers to a company8217s indebtedness. The debt ratios that are explained herein are those that are most commonly used. However, what companies, financial analysts and investment research services use as components to calculate these ratios is far from standardized. In the definition paragraph for each ratio, no matter how the ratio is titled, we will clearly indicate what type of debt is being used in our measurements. Getting the Terms Straight In general, debt analysis can be broken down into three categories, or interpretations: liberal, moderate and conservative. Since this language will be used in the commentary paragraphs, it8217s worthwhile explaining how these interpretations of debt apply. Liberal 8211 This approach tends to minimize the amount of debt. It includes only long-term debt as it is recorded in the balance sheet under non-current liabilities. Moderate 8211 This approach includes current borrowings (notes payable) and the current portion of long-term debt, which appear in the balance sheet8217s current liabilities and, of course, the long-term debt recorded in non-current liabilities previously mentioned. In addition, redeemable preferred stock, because of its debt-like quality, is considered to be debt. Lastly, as general rule, two-thirds (roughly one-third goes to interest expense) of the outstanding balance of operating leases, which do not appear in the balance sheet, are considered debt principal. The relevant figure will be found in the notes to financial statements and identified as 8220future minimum lease payments required under operating leases that have initial or remaining non-cancel-able lease terms in excess of one year.8221 Conservative 8211 This approach includes all the items used in the moderate interpretation of debt, as well as such non-current operational liabilities such as deferred taxes, pension liabilities and other post-retirement employee benefits. Leverage measures the funds supplied by shareholders relative to the funds supplied by lenders. If owners supply only a small portion of total funds, the risks of the business are borne mainly by outsiders. By borrowing from outsiders, the owners can maintain control with a relatively limited investment. Also, if a business earns more on borrowed money than it has to pay out in interest, the return to the owners is magnified. This effect, which is known as GEARING, is shown in the following example. Company has R100 to invest and it uses this asset to generate a profit of R30. It therefore has a return on investment of 30. Company B only has R10. It borrows R90 at 15 interest. It also generates a profit of R30, of which it has to use R13.50 to pay the interest. Given that it only used R10 of its own money, the return is 165 (16.5010 100). Which company is better Although profits are lower for Company B (it has to pay interest on the loan), the return on shareholders8217 investment is nearly 5 times greater due to the gearing This happened because the company was able to borrow at 15 to earn a return of 33 on the funds borrowed. Can you show this calculation There is a risk attached to excessive gearing, however. Assume in the following year the profit before interest dropped to nil. The balance sheet at the end of that year will show a considerable shortfall as the company would still need to pay the interest in spite of having made no profit Firms with low outside borrowings have less risk of loss in bad economic times, but have lower expected returns in good times. Conversely, firms with high outside borrowings run the risk of large losses but have a chance of making much higher profits. Decisions about gearing must always balance higher returns against increased risk. In deciding the extent to which a company should borrow, assessment of BUSINESS RISK is most important. Debt is always cheaper than shareholders money. Shareholders require an after tax return at least equal to what they can get on an equally risky investment 8211 currently around 20 after tax. The after tax cost of debt is currently around 10-11. However, the more risky you are (i. e. the more likely your profits are to fluctuate from year to year), the greater the risk to the lender that you will be unable to meet your obligations in bad times. The penalty for this is insolvency. In deciding whether and how much to lend you, bankers will consider: Consistency of profits past and future. Economic environment anticipated and its effect on your business. Market environment. Customer loyalty. Impact of technological change. Existing fixed financial commitments 8211 HP8217s, loans, fixed charges. Growth prospects. The Total Debt Ratio The debt ratio compares a company8217s total debt to its total assets, which is used to gain a general idea as to the amount of leverage being used by a company. A low percentage means that the company is less dependent on leverage, i. e. money borrowed from andor owed to others. The lower the percentage, the less leverage a company is using and the stronger its equity position. In general, the higher the ratio, the more risk that company is considered to have taken on. Total Debt Ratio (Total Assets 8211 Equity) Total Assets Total Debt Ratio (7793-1015.4) 7793 87 As of 28 February 2007, with amounts expressed in millions, Pick n Pay had total liabilities of R6777.6 (balance sheet) and total assets of R7793 (balance sheet). By dividing, the equation provides the company with a seemingly high percentage of leverage as measured by the debt ratio. Again, this figure should be seen in context, as the food retail industry is unique in this regard. Do you agree and can you explain why I am saying this The easy-to-calculate debt ratio is helpful to investors looking for a quick take on a company8217s leverage. The debt ratio gives users a quick measure of the amount of debt that the company has on its balance sheets compared to its assets. The more debt compared to assets a company has, which is signaled by a high debt ratio, the more leveraged it is and the riskier it is considered to be. Generally, large, well-established companies can push the liability component of their balance sheet structure to higher percentages without getting into trouble. However, one thing to note with this ratio: it isn8217t a pure measure of a company8217s debt (or indebtedness), as it also includes operational liabilities, such as accounts payable and taxes payable. Companies use these operational liabilities as going concerns to fund the day-to-day operations of the business and they are not really 8220debt8221 in the leverage sense of this ratio. Basically, even if you took the same company and had one version with zero financial debt and another version with substantial financial debt, these operational liabilities would still be there, which in some sense can muddle this ratio. It is therefore that one also finds an interest-bearing debt ratio. What would this ratio look like for Pick n Pay Interest-bearing debt ratio: Interest-bearing debt Total assets In this instance I elected to leave out the operating lease liability from the definition of debt. The interest-bearing debt ratio of 3 compared to the total debt ratio of 87, tells us that the real debt position of Pick n Pay is negligible. Again the reason for this must be looked for in the large portion of creditors that food retail companies have that they use to fund their assets. Even if we were more conservative and included the operating lease liability as a debt, the ratio would only increase to 10.5, which is very far removed from the 87 total debt ratio. The use of leverage, as displayed by the debt ratio, can be a double-edged sword for companies. If the company manages to generate returns above their cost of capital, investors will benefit. However, with the added risk of the debt on its books, a company can be easily hurt by this leverage if it is unable to generate returns above the cost of capital. Basically, any gains or losses are magnified by the use of leverage in the company8217s capital structure. The debtequity ratio This ratio is the traditional gearing ratio and measures the relative contributions of lenders and owners to the firm8217s total financing. Acceptable ratios for bankers are currently between 1:1 (for strong companies) and 1:5:1 for the rest. Again this will be determined in the final instance by the industry within which the company operates. The debt-equity ratio is really a measure of security 8211 a 1:1 ratio represents a 50 discount on asset value on liquidation. The debt-equity ratio is another leverage ratio that compares a company8217s total liabilities to its total shareholders8217 equity. This is a measurement of how much suppliers, lenders, creditors, and obligors have committed to the company versus what the shareholders have committed. To a large degree, the debt-equity ratio provides another vantage point on a company8217s leverage position, in this case, comparing total liabilities to shareholders8217 equity, as opposed to total assets in the debt ratio. Similar to the debt ratio, a lower percentage means that a company is using less leverage and has a stronger equity position. This reduces the risk, but does deny the company the opportunity to capitalise on the leverage effect of debt. Debt-Equity Ratio (Total Assets 8211 Equity) Equity Debt Equity Ratio 6777.6 1015.4 6.68 As of 28 February 2007, with amounts expressed in millions, Pick n Pay had total liabilities of R6777.6 (balance sheet) and total shareholders8217 equity of R1015.4 (balance sheet). By dividing, the equation provides the company with a relatively low measure of leverage as measured by the debt-equity ratio. A conservative variation of this ratio, which is seldom seen, involves reducing a company8217s equity position by its intangible assets to arrive at a tangible equity, or tangible net worth, figure. Companies with a large amount of purchased goodwill from heavy acquisition activity can end up with a negative equity position. What does goodwill refer to It basically refers to the premium above the intrinsic value of the assets purchased. You buy a company for R100 million. The assets are worth R60 million. Goodwill is R40 million. The debt-equity ratio appears frequently in investment literature. However, like the debt ratio, this ratio is not a pure measurement of a company8217s debt because it includes operational liabilities in total liabilities. Nevertheless, this easy-to-calculate ratio provides a general indication of a company8217s equity-liability relationship and is helpful to investors looking for a quick take on a company8217s leverage. Generally, large, well-established companies can push the liability component of their balance sheet structure to higher percentages without getting into trouble. The debt-equity ratio percentage provides a much more dramatic perspective on a company8217s leverage position than the debt ratio percentage. What do the debt-equity ratios for Pick n Pay look like for the previous 2 years, and how do they compare with those of Shoprite and the industry The Interest Cover Ratio In recent years another ratio has developed to measure a company8217s borrowing ratios, based on profit rather than balance sheet structure. It is called the Interest Cover ratio and is calculated as follows: Interest cover ratio Profit before interest and tax paid Interest paid An interest cover of 6 times for example, means that profits would have to decline 6 times before the business would be unable to pay its interest out of profits. A healthy interest cover is 5 or 6 times. The lower the ratio, the greater the cause for concern. The reason why EBIT is used, is that the interest burden is tax deductible. Component: 1328.8 49.3 26.9 This figure is a clear indication that Pick n Pay is a very healthy company and that it has very little interest-bearing debt. This ratio therefore provides a better scenario of the leverage position of Pick n Pay than the Total Debt Ratio or the DebtEquity Ratio. Also remember that EBIT is a profit measure and not a cash measure. The true ability of the company to pay its interest burden can be significantly different from that indicated by the Interest Cover. See the page on Cash Flow. Should a company have a poor leverage scenario, it can take the following steps to rectify a weak cash flow to total debt ratio: Avoid expansion (which normally increases gearing). Increase margins even at lower volumes. Concentrate on profitable lines. Trim overheads. Raise additional capital. Businesses heading for failure will exhibit many of the following symptoms: Autocratic chief executive Chief executive is also chairman Unbalanced skill and knowledge on the board Passive or weak board Weak finance director Lack of professional managers unprofessional management practices 2. Poor systems and lack of control Management accounts presented too late for action Bad cash flow forecasting Weak budgeting and cost control No costing systems 8211 don8217t know product and customer profitability Poor corporate governance 3. Poor response to change. particularly not understanding changes in customer wants 4. Expanding faster than cash availability (over trading) 5. Borrowing too much money (loans, bank overdraft and creditors) 6. Big project not working out Deteriorating ratios and or window dressing the accounts Resignations. rumours. poor morale Decline in product quality THE DUPONT ANALYSIS The DuPont Analysis is a wonderful synthesis of the different ratios to end up with the Return on Equity (ROE). When one is confronted with the ROE on its own, it can de a bit daunting to identify what issues need to be addressed in order to manage the ROE upwards. The DuPont Analysis provides a more comprehensive view of the component parts of the ratio. THE DU PONT ANALYSIS Based on this Figure, it is clear that ROE is driven by the following factors: Operating profitability of the company Driven by sales volume and price Cost of Sales and purchasing price Operating Expenses they need to be optimised The asset productivity of the company, as indicated by the Asset Turnover Assets need to be sweated This includes formulating optimal policies regarding debtors, stock, and creditors Fixed asset investments also need to be optimised The gearing of the company The capital structure of the company must be optimised The interest rate regime needs to be monitored continuously The ability to utilise non-interest bearing debt, as indicated by the financial cost ratio The ability to manage the companys tax base to minimise its taxable income. A more elabourate view of the Du Pont model can be seen as below. This figure reflects upon the calculation of Return on Assets. In order to move from RoA to RoE, we need to provide for the introduction of the gearing of the company, i. e. the use of debt in the capital structure. We use the ratio of Equity Multiplier. We calculate this by taking Total Assets (or Equity plus Liabilities), and divide it by Equity. The Du Pont analysis would do it the following way: Creditors Overdraft Short-term Debt Taxes Payable Total Current Liabilities Total Current Liabilities Long-Term Liabilities Total Liabilities Total Liabilities Owners Capital (Equity) Total Equity amp Total Liabilities (Total Equity amp Total Liabilities) Total Equity Gearing (or Equity Multiplier) When we now the Return on Assets and multiply it with the Gearing Ratio, we arrive at Return on Equity. How has Pick n Pay been managing the component parts of the ROE for the last 3 years and how does it compare with the industry averages and the ratios for Shoprite The PriceEarnings Ratio The price to earnings ratio (or PE ratio) relates market price to earnings per share. Formula: Market Price of the share Anticipated headline earnings per share Earnings per share: Net Income Number of shares outstanding In general, a high PE suggests that investors are expecting higher earnings growth in the future compared to companies with a lower PE. However, the PE ratio does not tell us the whole story by itself. It8217s usually more useful to compare the PE ratios of one company to other companies in the same industry, to the market in general or against the company8217s own historical PE. It would not be useful for investors using the PE ratio as a basis for their investment to compare the PE of a technology company (high PE) to a utility company (low PE) as each industry has much different growth prospects. The PE is sometimes referred to as the 8220multiple8221, because it shows how much investors are willing to pay per rand of earnings. If a company were currently trading at a multiple (PE) of 15, the interpretation is that an investor is willing to pay R15 for R1 of current earnings. It also may be seen that if the earnings remain at R1, it will take 15 years for the investor to get his money back. This view obviously ignores the fact that one could sell the share and retrieve ones investment, and that the share price could increase due to expectations of an improved performance. It is important that investors note an important problem that arises with the PE measure, and to avoid basing a decision on this measure alone. The denominator (earnings) is based on an accounting measure of earnings that is susceptible to forms of manipulation, making the quality of the PE only as good as the quality of the underlying earnings number. The higher the PE ratio, the more expensive the share is considered to be. However, a share with a PE of 15 might be viewed as a better buy than a share with a PE of 8. Under what circumstances would this be Also bear in mind that we frequently use a historical PE ratio, by using the existing price and the current EPS. It also makes sense to calculate the forward PE. This is somewhat more technical and will not be dealt with here. The following extract comes from the Moneyweb website (moneyweb. co. za): People often find PE ratios a little confusing, for good reason. The PE of a company is its price to earnings ratio. It is calculated by dividing the current share price of the stock with the headline earnings per share of that same share. The PE not only measures the company8217s past performance but its future performance too the expected future growth of the firm is reflected in the current share price. Unfortunately the PE ratio can mean many different things, and it is therefore very important to look at more than just this particular ratio when making your decision. The PE ratio, like all other ratios, is most useful when compared to: The stock8217s own historical PE Industry PE The PE of the particular sector the stock is in The overall market PE If we look at short-term insurer Santam (JSE: SNT) it currently has a PE of 6.63 this means that investors are willing to pay R6.63 for every R1 that the company generates in earnings. Santam is in the Financials 8211 Insurance sector along with Mutual and Federal (JSE: MAF). Mutual and Federal8217s PE is currently 6.7. Therefore investors are willing to pay R6.70 for every R1 that the company generates. The PE8217s of both companies are similar however Mutual and Federal8217s share price is around R25 and Santam8217s share price is around R102. The PE of the financial sector overall is 10.64. This is higher than both Santam8217s and MampF8217s PE ratios. The weighted average PE of the All Share Index is 14.51. This seems to suggest that both of these insurance stocks are cheap. Instead of waiting 10 or 14 years to recoup your investment, you would wait just under 7. However, before you rush off and buy Mutual and Federal or Santam shares there are two things you must consider: The companies growth rates The industry the companies are in. Both company8217s growth rates can only be found once their financials are released, and the insurance industry is very cyclical, heavily dependent on the performance of financial assets like equities, as well as on consumer and business-to-business spending. Thus, one should also look at the general economy when analysing PE ratios. Currently interest rates are increasing in South Africa and expected to rise again over the next few months. Furthermore, the world economy is suffering thanks to the credit crunch and this directly affects the South African economy, possibly causing share prices to drop. This drop in share prices obviously affects PE, and expectations for the industry. PE ratios are helpful, but only when used in context the PE ratio of a stock should not be the only tool used. Interpreting the PE of a company is dependent on the sector the company is in, the risks associated with the sector and the company, and even the country in which the share is listed (for example, US stocks generally have slightly higher PEs than emerging market stocks). All of this must thus form part of your analysis of a company. The Market-to-Book Ratio This ratio is used by the analysts to determine whether the share is undervalued (therefore its price is expected to rise in the future) or overvalued (it is a popular growth share ). Also called price to book ratio, it is applied to firms that have lots of fixed assets . A ratio used to compare a stock8217s market value to its book value. It is calculated by dividing the current closing price of the stock by the latest book value per share. It is also known as the 8220price-equity ratio8221. PB Ratio Market capitalisation (Assets intangible assets liabilities) As a quick reference, analysts also use shareholders equity on the balance sheet as the denominator. A lower PB ratio could mean that the share is undervalued. However, it could also mean that something is fundamentally wrong with the company. Why As with most ratios, be aware that this varies by industry. This ratio also gives some idea of whether you8217re paying too much for what would be left if the company went bankrupt immediately. Calculate the PB ratio for Pick n Pay for the last 3 years, and compare it to both the industry and Shoprite. What are your deductions PE ratios only show the profit made by the business. To compare its cash generating ability we use dividend yield . the other important tool when measuring a share8217s relative rating. In their classical form, dividend yield reflects the actual cash generated for a shareholder on the stock they have selected. This makes the share directly comparable with alternatives such as bank deposits, Government bonds, even property. In its most basic form, calculating the dividend yield of a share is arrived at by expressing the annual cash paid to shareholders as a percentage of the current share price. So a company which declared a dividend of 5c a share in the past year would have a dividend yield of 5 when its shares trade at 100c each. As with PE ratios, dividend yields change as the share price moves. Dividend yields are always historic, that is based on what was actually distributed in the past 12 months. Although the past is a good guide (companies hate reducing their annual dividends) the coming year8217s payout depends on how well the company performs and how much of the profit is distributed. The proportion of profits paid out is called 8220dividend cover8221, itself linked to the strategy of the business. Rapidly growing enterprises or those with conservative boards tend to pay out proportionately less of their profits, so have high dividend cover. An advantage in this instance is that though the payment might be relatively small, it8217s more likely to be maintained into the future than a company which pays out most of its annual profits. Why would this be the case What has been the dividend yield for Pick n Pay over the last 3 years, and how do they compare with that of the industry and Shoprite The Earnings Yield is calculated by dividing the earnings per share for the most recent 12-month period by the current market price per share. The earnings yield (which is the inverse of the PE ratio) shows the percentage of each rand invested in the share that was earned by the company. The earnings yield is used by many investment managers to determine optimal asset allocations. Money managers often compare the earnings yield of a broad market index (such as the All Share Index on the JSE) to prevailing interest rates, such as the current R153 yield. If the earnings yield is less than the rate of the R153 yield, shares as a whole may be considered overvalued. If the earnings yield is higher, shares may be considered undervalued relative to bonds. Classical theory suggests that investors in equities should demand an extra risk premium of several percentage points above prevailing risk-free rates (such as T-bills) in their earnings yield to compensate them for the higher risk of owning shares over bonds and other asset classes. The growth of a business is a very important element thereof. The larger an organization, the more viable it can be. However, there are limits as to the rate at which an organization can grow. One of the important issues entails the financing of this growth. Bye now, you have already seen the impact of working capital requirements on the cash flow of the business. In this section, we will take the principle a bit further. When we forecast the financing needs of the business, we need to take the projected income statement and balance sheets into consideration. According to John Stretch, the sequence of activities is as follows: Income Statement: Estimate Sales Growth: Forecast variable expenses as a of sales. Keep fixed expenses roughly fixed. Assume interest expenses to be fixed. Carry retained earnings through to the Balance Sheet. Forecast current assets as same of Sales. Keep fixed assets roughly fixed. Balance the balance sheet with the debt figure Re-iterate the interest figure to ensure it is reasonable. Many businesses have experienced the financing problems which can accompany growth at its worst referred to as overtrading. Overtrading occurs when the profits earned by the business are not sufficient to produce the working capital necessary to generate growth. Consider the following: In 2009, Streetwalk amp Seemores balance sheet looked more or less as follows: Streetwalk amp SeemoreBalance Sheet as at 31 Dec 2009 All figures in R000s As long as stock, debtors, and creditors grow in direct proportion to sales, the shortfall will compound itself annually, and gearing will worsen annually. Businesses susceptible to overtrading are those that operate on low profit margins and have fairly high net working capital requirements relative to sales. A simple formula enables you to estimate the rate at which your business can grow through internally generated profits: C the critical growth rate expressed as a increase in Sales A the net profit after tax to sales W the net balance sheet items that vary directly with sales expressed as a of sales. This is normally (Stock Debtors Creditors x 100) Sales. The rate at which your business can grow from internally generated funds, is therefore driven by 2 factors: Net profit to Sales Net Working capital to Sales A business with low profit margins and high stock and debtors automatically has a low critical growth rate. The following example shows the relative sensitivity of the critical growth rate: Through an awareness of these relationships in their own organizations, managers can plan and control real growth. It is easy to state growth strategy in real terms, such as a increase in sales or market share, without considering the financial implications. Equally, the importance of iron-fisted working capital and margin management for a companys future growth rate is clearly illustrated in the above example. Inflation is part of financial growth. Inflation growth has exactly the same effect on a companys financial resources as real growth. Accordingly, a companys growth rate is directly influenced by the rate of inflation. From a finance view, a high growth rate has 2 important consequences: Financial resources may be inadequate to fund this growth Gearing may be weakened. The extent to which further outside borrowing may be needed as a result of a high sales growth (including the proportion due to inflation and exchange rates) is given by a second formula: F (W x I) (A x S) F Additional funding required W The net balance sheet items that vary directly with sales, expressed as a of sales (as per the previous formula) A the net profit after sales to sales (as per the previous formula) I Increase in Sales (in Rands) over the last year S Total sales forecast for this year Applying the formula to Case 1 above, and assuming a forecast in sales of 15 over last year, the extra finance you will have to raise will be R70 000, calculated as follows: (0.4 x 750 000) (0.04 x 5 750 000) 300 000 230 000 So the business requires an extra R70 000 to finance sales growth of R750 000. This level of growth means an increase in stock, debtors less creditors of R300 000, and the profit for the year is R230 000. The balance will have to be raised externally. Deciding how fast to grow is, like most business decisions, an assessment of risk and return. Many businesses do not give enough attention to the risk element of this equation, because the underestimate the financial implications of growth in a world of changing inflation and exchange rates. The formulas given here are rough cut calculations, assuming linear relationships between sales, profits, and working capital. Your own circumstances may be different, and could require more detailed financial projections where the underlying relationships are considered item by item. (The source of information on Growth is the unpublished notes of John Stretch, 2009. John Stretch is a consultant in strategy and finance, and I consider him to be a guru in his field.) THE FINANCIAL DRIVERS OF VALUE In the field of finance, there are a number of financial factors that drive value. They are referred to as the financial drivers of value. We would like to do the following: Growth Duration . This element requires management to accept projects that would bring about a long period of high growth. The reality is that if management does nothing at all in terms of growth, the companys growth rate would at best mirror the growth rate of the economy at large. This would mean that there would be opportunities that are not being tapped into. The value of the company would therefore be less than the potential. Companies such as this are then prime targets for takeovers, in which case management would be the first to lose their jobs. The longer the period of abnormal growth the management could unlock, the better off the company would be. Sales Growth . A high sales growth rate, all else being equal, will unlock value for the shareholders and other stakeholders such as employees and the government. Sales is a factor of volume and price. These again are typically driven by: The market segments the company has chosen to serve. The nature of the customers will determine what you can charge. The nature of the industry. What products are being sold The competitive situation in the industry. How many competitors are there How strong is the competition How elastic are the prices and demand curves in the industry The strategic posture the company has selected in the industry. Have you elected to be a low cost provider or a differentiator Profit Growth . Profit is a factor of price and costsexpenses. How high can you raise your prices without losing customers How can you optimise your costs and expenses Can you pass on price increases from your suppliers to your customers, or do you need to absorb them yourself Cash Tax . Large companies pay a considerable amount of tax. A lot of them would ideally not want to pay tax at all. Das geht leider nicht. However, companies do appoint experts to manage their tax base to the benefit of the company. Banks also try and benefit from the tax base of their clients. Working Capital Investment . Ideally speaking we would want to require no working capital at all. Food retail companies such as Pick n Pay, Shoprite, Carrefour, Tescos, and Wal-Mart, however, have a great benefit in that their working capital requirement is negative. As a matter of fact, Pick n Pay finances about 70 to 75 of their total assets with their creditors. The advantage of this is that this form of financing is free, and they therefore need very little equity, which is the most expensive form of financing. Not all industries are so lucky however, and management needs to optimise their working capital policies. Fixed Asset Investment . The same situation as for working capital is true for fixed assets. You would love to do everything without needing any investment in fixed assets. However, companies such as mines require a substantial investment in fixed assets in the form of ore reserves, plants, equipment, etc. The same is true for hotel companies. The ideal is to optimise your asset use sweat your assets. Capital Structure . This you will remember refers to the combination of debt and equity you use to finance your investments in assets. There is an optimal combination that will result in the lowest possible weighted average cost of capital. Remember that debt brings along some powerful advantages in the form of leverage, where Return on Assets is levered upward by the good use of debt, to a higher Return on Equity (see the Pick n Pay example). These 7 financial drivers of value need to be driven to the respective levels within the company. NON-FINANCIAL DRIVERS OF VALUE At a non-financial level, the following typical shared value-drivers are typical: Vision: for growth 8211 ambitious, well defined and communicated Strategy: clear and focused 8211 to protect, stretch and leverage the core Culture: promotes customer service - open, empowered, communicative, competitive Leadership: structured to promote high growth 8211 multinational, cross-functional teams and a broad range of experience Structures and organisational processes e. g. IT pay linked to growth Resources: invest in competencies, in good and bad times Customer interaction 8211 constantly seek new ways to interactdirectly Relationship networks: with many external parties Customer satisfaction is extremely important. In order to get optimal profits and returns, the organization needs customers that are loyal, committed, and satisfied. Organizations frequently state that they are customer centric, but then do not really understand who the customer is and what they value and do not value. This is why the first element of importance in the building of your business model should be the customer segments you serve. Understanding the suppliers of your company is equally important. Understanding what your suppliers are doing and how they can create value is important in order to optimise the industry value chain and the supply chain. A lot of value can be unlocked by dealing with this issue in a judicious manner. We also need to understand that shareholders are another important stakeholder. They would want stable company performance with sustainable profits and high returns, again on a sustainable basis. Another grouping of people that are very important in the total value-creation process is the employees. Without their commitment and dedication, nothing will happen to create sustainable value. The factors that need to managed to create value for them, are issues such as market-related remuneration packages, development opportunities, and a highly energised leadership. We also need to bear in mind that the organization functions within a society. Society at large also needs to receive value from the activities of the organization. RETURN ON STRATEGIC EFFECTIVENESS (ROSE) An instrument that brings together the picture of both financial and non-financial drivers of value, is the Return on Strategic Effectiveness (ROSE). The elements of ROSE are as follows: This block is related to a companys capital structure and its use of funds from investors and vendors. Resources related to a companys financial capital include the companys: Borrowing capacity Ability to raise capital Retention of prior earnings Sustainable growth rate This building block is related to the companys employees, the assets that walk out the door each night or at the end of each shift. These measures focus on the employees capabilities to perform their responsibilities and to work together as a coordinated team. Resources related to a companys human capital include the employees: Education amp training Knowledge Commitment Leadership ability Trust Integrity Experience This is related to all the tangible resources owned or leased by the company. These measures are focused on the companys utilization and management of the tangible assets. Resources related to the companys physical capital include the companys: Productive capacity Capital expenditures Maintenance quality Flexibility and mixed use of fixed assets Technological commitment Location, location, location (access to suppliers, customers, and human capital) This is related to companys group attributes, such as its culture, creativity, public image, and organisational structure. Resources related to the companys organisational capital include its: Employee loyalty Employee teamwork Reputation Product innovation Speed and quality of decision making This is related to the effectiveness of the companys identifiable operating systems. Resources related to the companys system capital include the companys: Computer systems and information systems Customer relationship management systems Communication systems Shop floor systems Inventory control systems Sales amp marketing systems Accounting systems Project management systems This is related to the companys relationship to its customers and the acceptance of its products by its customers and potential customers. Resources related to the companys customer capital include: Customer services Customer loyalty Market penetration Information access It is important to align the different building blocks of the ROSE in order to ensure that sustainable value is created. Equally important is the need to measure what the different Key Performance Areas and Indicators are turning up. I trust that this page has provided you with some food for thought on how to analyse the financial performance of a company.
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