R&D Expenses Toyota

R&D Expenses Honda

Video Tutorial - Hedge Funds, Venture Capital, and Private Equity

Categories of Financial Assets Under IFRS & US GAAP

Characteristics: 
• Investments in financial assets are considered Passive investments.
• Investor usually has < 20% ownership interest.
• Investor cannot exert significant influence or control over the operations of the investee.
Accounting Treatment: 
IFRS and U.S. GAAP have similar accounting treatment for investments in financial assets.
• Investments in financial assets are initially recognized at fair value.
• Dividends and interest income from investments in financial assets are reported in the Income Statement.
• Treatment of Subsequent changes in fair value and transaction costs depend on the classification of the financial asset investment.
Classification Under US GAAP

Classification Under IFRS

Aegis wins $3bn General Motors global media contract

GM has changed its business model and transformed into a 'successor'. The magnitude of their efforts could be seen through this Financial Times Article.

Read the Article: http://www.ft.com/cms/s/0/44f86cc8-46be-11e1-bc5f-00144feabdc0.html#axzz1kUdGMRXj

Credit Rating Summary - General Motors

Corporate Investments (Basic) Categories

Investments in marketable debt and equity securities can be categorized as follows:
1) Investments in financial assets in which the investor has no significant influence or control over the operations of the investee (less than 20% ownership interest).
2) Investments in associates in which the investor can exert significant influence but not control over the investee (between 20% - 50% ownership interest).
3) Business combinations, i.e. investments in subsidiaries, in which the investor has both over the investee. Greater than 50% ownership interest).


NOTE: Ownership percentage is only a guideline. The category of investment is rather based on the investor’s ability to influence or control the investee.


It is possible that investor has significant influence over the investee with < 20% ownership interest. Or the investor has 20-50% ownership but does not have any influence on the investee.


Preferred Accounting Methods: 
• When a company owns a non-influential and noncontrolling interest in another company the investment must be carried at Cost.
• When a company owns an influential but noncontrolling interest in another company, commonly 20-50%, it must account for it under the Equity Method.
• When a company's interest in another exceeds 50% it is considered to have controlling interest and must consolidate the financial statements using the Acquisition Method.

Congratulations Level I Candidates

It was 39% when I had appeared and the joy of realizing ‘being in 39%’ was more as compared to passing the exam! This time it is 38%. I can understand how you would be feeling. Your efforts have made you step one level ahead and now you have the opportunity to learn ample knowledge and develop significant skills while preparing for Level II. 

Those who were not able to pull it off should not loose heart and come up with a new spirit. The question to address is not the level of efforts they had put in but their productivity. If you can’t accept this failure then you don’t reserve the right to appear in the CFA exam ever. This is an excellent opportunity for you to learn from your experience, identify the  loopholes, address them and come up with a new spirit.

Okay 38% this is your day, live to your max but do not forget, Level II is way more in depth as compared to Level I. Does that mean it is difficult? Certainly it is! Is it impossible to do? If it is, then alteast worth trying… Is it enjoyable? Well if you find it enjoyable then your chances to pass may rise…

Video Tutorial - Hedge Fund Structure & Fees

Mercedes, BMW target wealthy individuals with lease model - Livemint Article

The previous posts were extracts from income statements of Daimler Group and BMW Group. Below is the link to the article published in Livemint highlighting how both giants target wealthy individuals. For both groups such lease are sales type where they not only enjoy profit over cars but also interest income on lease.

Read the article: http://www.livemint.com/2012/01/15213116/Mercedes-BMW-target-wealthy-i.html?atype=tp