收藏家 J‘s Collection

忙的好久没写新文。今天是CFA L1放榜的日子，忽然发现邮箱里发来了原来读者的评论，说通过了。

那我也来公布一下成绩，感谢这么多读者，也希望我做的笔记能对你们的考试有所帮助。

July 2008

XXXXXXX
XXX XXX

Level 1: Pass

The table below illustrates your subject matter strengths and weaknesses.   The three columns on the right are marked with asterisks to indicate your performance on each question or topic area.

Multiple Choice

疲惫不堪，不过总算结束了，应该是比较完美的。

昨天跑到一个月前预订的7天酒店住，设施倒是很舒适，该有的都有，就是墙太薄了，隔壁走路关门说话都听得到，吵死了没睡好。送的一包安睡奶也没起作用，真正睡着的估计也就5小时不到。早上6点半本来约好叫醒服务的，也没叫，自己手机闹钟起来的。吃完面包咖啡退房7点，写了个评价给7天“隔音太差，晚上很吵”，估计不大会有效果。

7点退完房走到路上叫了个出租，刚接班的大妈搞不清楚状况，开了别的方向。。。我说，你怎么越开越远了，她说是，好几个路口忘记转了，说不打表了，原来你去那多少钱就多少钱吧。还好时间还很充分。不过看得出来她不是想绕远，是确实没搞清楚方向。

7点半到了SHG楼下，无数人坐在路边看笔记，还有大妈大叔陪考的，汗一个，多大的人了，最小也大三大四了吧，还要陪考，又不是高考罗。路上还有道明，金程等发图卡笔的，很不错，原来买的2B铅笔都没用上。 8点多进场了，发现人比想象的还要多，看起来80%是大学生，就业压力真的很大啊。990刀对于他们来说，一年学费加几个月生活费了，父母的血汗钱啊。不过当作投资，还是很值得的，但必须要坚持下来。

考场里面广播不停的播，一会指挥考生，一会指挥监考，反反复复，烦也烦死了。

早上题较简单，提前一小时做完，做完后马上举手示意，跑到厕所休息了一下。回来慢慢检查。概念题较多，计算较简单。估计除了会计别的应该都可以上80%。检查途中竟然还改了n道题….做的太快是不好。

总算到了收卷，广播又一阵指挥，还不能走until dismissed…军事化管理啊。一块一块的广播说可以走，大家才走。下楼的地方还是人挤人。好不容易走到楼下看见一长队，判断是买盒饭的地方了。跟大家一起排队。排到前面剩10个人左右的时候，说没饭了，要等。。。我shit，饿晕了都。又说再楼下也有饭吃。蹬蹬跑下去也是一长条队，我算了吧。。。包里还有个面包早上剩下的。这时候联系到了Ben哈哈，他们正在古北家乐福的麦当劳，于是托他们带了个巨无霸。

又等了20分钟，巨无霸来了，边吃边聊早上考试。都说还可以。吃完匆匆进行下半场。

没想到啊没想到，下午跟上午比起来，简直是地狱。计算倒不是很复杂，但是步骤比较多，概念题也是很多没见过的。不确定的题比上午简直是几何级数的增长。加上体力不支，肚子又被巨无霸撑到，很是不爽。不过最后还是提前了半小时做完。浑浑噩噩的检查了一阵，又修改了几题，总算到点了。下午估计两个大头会计和资产评估60%其他还是有把握70%的。通过估计没什么问题吧。

零零散散的学，估计也超过官方建议的300小时了。今天考完了就到这吧。

最后一周了，感觉有点疲惫，希望快点参加考试，尽快结束。

Practice Exam 2的3套mock，只做了一套半就做不下去了。题目又长又臭，真是体力和脑力还有注意力的强烈考验。做试题笔记的时候，回头翻了翻课本，发现平时用来翻翻看还是个不错的选择，有很多科普性的金融知识。 考试这点内容，只算个overview吧。

考完了一级还会考二级吗？这是个问题。人在每个阶段前方的路都不一样，哪怕只相隔半年。机会有时候就突如其来，敢不敢去抓，能不能抓住也全看自己的取舍。也说不清楚是放弃原来的梦想，还是确实有客观条件限制。

半年+990USD，给自己一个finance background，值！也算是30岁以前的一份积累。

在热心考友Elaine的帮助下，总算找齐了3套Sample和2套Mock，其中一套sample是cfai网站免费的，就是之前说的只有51%的那套…汗

不过今天做了第二套sample就好多了，ethic 77%，weighted average达到75%了。需要做的笔记是少了，不过60题的笔记竟然还是做了有1页半的A4，无尽的points…怎么就cover不完了捏。

剩15天要干掉的资料有practice exam 2的3套共720题，mock exam用于最后一周全天mock 240题。还有之前做的无数张A4纸正反面的笔记。艰巨啊…

考前一天定了高架附近的7天酒店嘿嘿不用起早奔波坐一个多小时车，打个车15分钟就到了（希望别堵） ，8点就到考场也不是这么容易的事。从现在开始要调整作息了。

Wish 所有考友 all the best了！

看完notes和一大堆资料以后，开始做题，practice exam 1的第一套，第二套。发现连ethic都没办法达到要求（70%），后面的算算也不够pass的。

去打印ticket看到CFAI网站里面有一套免费的60题sample，做过以后打击也不小，51%，failed.于是把做过的题一个一个重新做笔记，（比较乱，就不发到blog了。） 写掉了3根笔(不是新笔啦。。。)和n张A4纸之后，做掉了PE1的第三套AM，总算有了点感觉。ethic好不容易到了70%，weighted average也超过了65%。

还剩20天了，还有practice exam 2的三套，和看看有没有可能弄到的paid mock exam 的2套，继续做无数的笔记，用掉无数根笔，把weighted average 提高到传说中的80%，相信真考也就没有问题了。

另外PE的2本计算偏复杂，ethic偏长，据说都不是cfai最近考试的风格，但不妨碍用来找回失落的知识点。

上午/下午 各三小时
各120题，平均1分30秒/题

权重
1 ethics      36题                15%
2-3 数量分析 29题                      12%
4-6 经济学    24题                      10%
7-11公司财务和报表分析 67题   28%
12 投资管理   12题                      5%
13-18 资产估价  72题          30%

考场准备资料
身份证，护照，计算器，ticket, 铅笔和笔刀，手表

Revenue Recognistion
Earning process is complete
realization of payment is assured

5种方法：
1.sales basis: 最常用
2.percentage of completion: accounts for profits in stages
3.Completed contract: recognition of profit delayed until contract completion
4.Installment sales: accounts for earnings in stages in proportion to cash collections
5.cost recovery: profits are not recognized until all costs are recovered

Impact on balance sheet

impact on Cash
2种方法，ending cash balance是一样的， using the net of cash received and cost incurred

accounts receivable
2种方法ending AR balance 是一样的，用net of cash receivable and amount billed

Construction in progress(CIP)
ending CIP = cost incurred + pro-rata profit
POC下，profit recognized throughout the project life
CC下，no profit recognized until contract completion
CIP POC> CIP CC

Advance Billings
2种方法，Gross AB一样，

Netting AB and CIP
2种方法，balances是net的， cumulative construction in progress – cumulative advance billings 显示在FS里
如果value是正，记做CIP（asset side），如果负，记着AB（liability side）

Retained Earnings=(total costs to date / total estimated costs) × gross profit
represents the cumulative share of total gross profit to date

Appropriate method: 根据status of completion of the earnings process, assurance of payment, reliable estimate of total cost

Unsual or infrequent items
above the line pre-tax as part of continuing operations
例如：gains/losses on disposal of a business segment, gains/losses on sale of investments, environmental costs , restructuring/impairment, integration expenses associated with acquisitions

below the line
Net income from continuing operations
+-income from discontinued operations
+-extraordinary items, expropriations, debt retirement, uninsured losses
+-cumulative effect of accounting changes
= net income,    reported net of taxes

Discounted operations, below the line, net of taxes
management adopts a formal plan to dispose of a business segment
business segment must be separable from the company’ s operations

Change in accounting principle
a change from one GAAP principle to another
disclosures, nature and justification, effect on income, pro forma effects for prior statements, footnotes.

role of nonrecurring item in estimating earnings power
classification of good/bad news
income smoothing
big bath techniques
accounting changes, suspicious->no cash implication

Financial reporting 的目标
1.equity investors: 寻找长期投资目标，盈利能力，增长机会和付息能力
2.short term creditors:研究liquidity of business
3.long term creditors:长期目标和盈利能力

FR的用户，investors-debt and equity, govenment-taxes and regulators, others-public,special interest group,workforce etc

Accrual Accounting principles
1.Going concern
2.Recognition
3.Prudence
4.Histonic cost
5.Matching

Accounting characteristics
1.Comparability and consistency
2.Materiality
3.Conservatism
4.Full disclosure
5.cost/benifit

Accrual Accounting
1.revenues are recorded when earned regardless of cash collection
2.expenses are recorded when incurred regardless of cash payment
3.Matching principle, report expenses in the income statement in the same period as revenues that were earned as a result of those expenses

Accounting information的质量
understandability
usefullness, relevance -disicion making, reliability – credible/verifiable

Statement of financial accounting concepts 2 (SFAC)
Relevance , 影响决策的信息
Timeliness, 信息瞬间失去意义，最好可以forecasting
Reliability,verifiable and representational faithfulness
Consistency, same accounting principle consistency applied over time
Comparability, 不同公司间对比。
Materiality, 重要的数据

Contents of stockholders report
1.Management discussion and analysis(MD&A)
2.Balance sheet
3.Income statement
4.statement of stockholders’ equity
5.statement of cash flows
6.statement of comprehensive income
7.auditor’s report
8.explanatory notes
9.supplementary information

Contents of MD&A
1.results of operations + discussion of trends
2.Capital resources and liquidity + trends in cash flows
3.Gerenral business overview based on known trends
4.effects of known trends, events and uncertainties
5.discountinued operations, extraordinary items, ununsual items
6.disclosures in interim financial statements
7.segmental cash flow requirements and contributions

Balance sheet

Current asset= Cash + account receivable + inventory + trading securities + prepaid expences
within one year

Long-term asset=available-for-sale securities +ｈeld-to-maturitysecurities+investments in companies+Gross PP&E+ less accumulated depreciation+ intangible assets

Current liabilities=account payable + tax payable + dividends payable+current portion long-term debt

Long-term liabilities = bond payable + mortgage payable+ deferred taxes

Equity=preferred stock + common stock + additional paid-in-capital + contributed capital+retained earnings

Income statement
Net sales – cost of good sold = gross profit
gross profit – SG&A expense – depreciation = EBIT
EBIT – interest expense = EBT
EBT – taxes = Net income

Stock holders equity
Beginning stockholders’ equity +-net income + sales of common stock + additional paid in capital – preferred stock dividends – common stock dividends= ending retained earnings

Preferred stock: disclosure – dividends(fixed, floating, participating) call provisions, conversion privileges; if redeemable by holders,reclassify after liabilities

Common stock: each class reported separately, recorded at par value, treasury stock contra for repurchases

Additional paid in capital:普通股溢价发行，超过部分记做additional paid in capital

Other items: minimum liability adjustment (pensions), forex gains and losses under the all-current method, market valuation adjustment(available-for-sale securies), unearned shares issued to employee stock ownership plans(ESOPs)

Statement of Cash Flows
+-cash from operations
+-cash from investing
+-cash from financing
= ΔCash
+beginning cash balance
=ending cash

Statement of comprehensive income
Net income
cumulative translation adjustment
minimum pension liability
unrealized gains/losses on available-for-sale securities
deferred gain and losses on cash flow hedges

Footnotes
提供信息关于accounting methods/assumptions/ estimates, Audited, 提供其他信息关于depreciation method, inventory valuation methods, leasing arrangements, deferred tax details, 未列于FS但相关或者重要数据。

Proxy statements
在company meeting前，发给所有股东，解释需要股东投票的proposal， 包括management remuneration, stock options, special deals and related party transactions, 也detail any change of auditor

Common-sized statement
1.normalize balance sheet and income statement to facilitate comparison of different-sized firms
2.Common-sized balance sheets express all balance sheet accounts as a percentage of total asssets
3.Common-sized income statement express all income statement items as a percentage of sales

Auditor report， independent review of the company’s financial statements, true and fair
unqualified opinion VS qualified opinion, uncertainties
Contents: responsibility of management to prepare statements, independence of auditors, properly prepared in accordance with relevant GAAP, free from material misstatement, accounting priciples and estimates chosen are reasonable

Income statement format
Revenues from the sales of goods and services
+other income and revenues
-operating expenses
-financing costs
+-unusual or infrequent items
=pretax earning from continuing operations

-income tax expense
=net income from continuing operations

+- income from discontinued operations
+-extraordinary items
+-cumulative effect of accounting changes
=Net incom

Financing liabilities的种类
1.Discount Bonds/Zero coupon bonds, issuer的好处lower coupons paid,CFO overstated;  分析师处理：reduce CFO by amortization amount
2.Convertible Debt, issuer的好处，比vanilla bond利息花费低，CFO高,一样的B/S Liability; 分析师处理：股价>转换价，是Equity,反之是Debt
3.Bonds with warrants, issuer的好处，比可转债利息花费低，CFO高,B/S更低(balance sheet liability);分析师处理：bond value是debt, warrant 是equity
4.Exchangeable Debt, issuer的好处，低利息花费，不需要卖investment来产生现金流，delay tax, control timing of gain; 分析师处理：跟可转债一样
5.Commodity bonds, issuer到好处，把fixed的利息支出变为variable, reduce interest coverage variability; 分析师处理：可能比可转债risk要小
6.Perpetual debt ，好处，低利率时锁定长期利率，处理：作为equity
7.Preferred stock, 好处，debt/equity hybrid security,处理，redeemable preferred shares是debt, dividends是利息，variable-rate shares是short-term liabilities

Debt/Capital = LTD/ (LTD + EQUITY)

利率变化的影响
Book value of debt 反映market rate at date of issurance 分析师用Prevailing market rate重估价值 分析leverage ratios和公司的economic value时，考虑revised value

SFAS107要求公司披露外债的fair value

Covenants: 保护bond holder, trigger repayment on violation (technical default) , 在footnotes里披露。种类：
1. restrictions on dividends and share repurchases
2. restrictions on M&A and sale leaseback and disposal of certain assets
3. restrictions on the issuance of new debt
4. repayment patterns

典型的Ratio Based Covenants
Current ratio, working capital, interest coverage, debt/equity

Lease and Off-Balance-Sheet Debt
Operating lease,Off-Balance-Sheet 好处
1.avoid balance sheet recognition
2.lower assets and debt, 使之lower leverage and higher turnover and ROA
3.Covenants(leverage restriction)
4.Management compensation linked to invested capital
5.Lease term < asset’s life, lessor 更容易在end of lease时卖掉资产

Capital lease, balance sheet impace; 好处
1.lessee 得到折旧和利息支出减少的税收好处
2.更高的CFO

术语：lease parties: lessor 借出方 own the asset; lessee 借入方，rent the asset
种类：
1. title transferred to lessee at end of lease
2. bargain purchase option
3. lease period >= 75% of asset’s feconomic useful life
4. lease payment 的PV  >= 90% of asset FMV(fair market value)

Discount rate is lower: 1. lessee incremental borrowing rate; 2. implict lease rate

To Lessee
1. Financial Statement
Capital lease : Assets higher, Liabilities Higher, Net incomes(early years) Lower, CFO higher, CFF lower, Total CF same
Operating lease: 反之，Total CF same

2. Ratios
Capital lease: Asset turnover lower, ROA lower, ROE lower, debt/equity higher,
Operating lease: 反之

Sales-Type and Direct Financing Leases

lessor方来看，是seller/dealer of the leased equipment, structured as capital lease, manufacturing and financing profit
PV – cost of asset = profit

Direct financing leases
financing profit olny – interest revenue, 类似operating lease, no gross profit at inception
PV of MLP = cost of asset  – rate implicit in the lease

Accounting at sale
1.record sales as PV of lease paymemts
2.COGs = cost of asset – PV of salvage
3.Profit – no net CF impact , CFO increased and CFI decreased by same amount
4.Asset, net investment in the lease = PV of lease payment + salvage

Periodic transactions
1.interest income = befinning net investment × discount rate
2.impact income statement / CFO
3.Ending net investment = beginning balance – principal repayment
4.Reduction in inventory = CFI
5.Ending balance = salvage; if sold , = CFI

其他off balance sheet activities
1.understate debt balance
2.understate receivable对分析师来说，restate debt 和 receivable balance 在算ratio之前做。
3.take-or-pay and troughputs
agree to purchase a minimum input quantity over a period of time
nature and minimum payments disclosed in footnotes
对分析师来说，add PV of asset and debt to balance sheet
4.Sales of receivables
collateralized borrowing
对分析师来说，increase AR and current liabilities; classify sale as CFF rather than CFO
5.Finance subsidiaries
not consolidated if < 50% owned
对分析师来说，add proportionate share to assets and liabilities
6.Joint ventures and investment in affiliates
对分析师来说，add any guaranteed debt to parent balance sheet
if no guarantees, add proportionate share of debt to parent balance sheet

Effect on ratios
1.take-or-pay and throughput
lowers leverage ratios(debt ratio and debt equity ratio)
2.sale of receivable
understates receivable
understates short-term borrowings
lowers leverage ratios

Taxable income on the tax return- pretax income on the income statement
Taxes payable on the tax returen-tax expense on the income statement,   balance sheet liability
income taxes paid: actual cash flow including payments/ refunds
tax loss carry forward: past losses used to reduce taxable income in future years

Pretax income (EBT)
Income expense: incluedes tax payable and deferred income tax expense
Deferred income tax expense: difference between taxes payable and income tax expense
Income tax expense = income tax payable + Δdeferred tax asset/liability
Deferred tax asset: income tax expense < taxes payable, expected future cash flow
Deferred tax liability: tax payable < income tax expense
Valuation allowance: reserve against deferred fax assets

Timing difference: straight line depreciation VS accelerated depreciation
Temporary difference: expected to reverse and impact taxable income in the future
Permanent diffference: not expected to reverse(不导致deferred tax)

Deferred Tax Liabilities
Tax expense on financial statements > taxes payable on the tax return
Difference is temporary
Expected to reverse and result in future cash outflows

Deferred tax asset
Tax expense on financial statements < taxes payable on the tax return
Difference is temporary
Often caused by warranty expense and tax loss carry forwards
Expected to reverse and result in future cash inflows.

Valuation Allowance
Only applies to deferred tax assets
It is a contra-account against deferred tax assets
If deferred tax assets will not be realized, then the deferred tax assets must be reduced, there by reducing income from continuing operations.

Liability Method (SFAS 109)
The amount of provision for deferred tax should be changed 假如将来税率变化， 如果asset/liability not adjusted, it will not reverse to zero.

根据将来的时间点Revalue all deferred tax assets(DTA) and deferred tax liabilities(DTL)
税率增加，减少income 和 equity ,反之。

DTL是Liability还是Equity
High likelihood of reversal = liability, Low=equity, uncertain = ignore deferred tax
DTL valuation: 为会计目的， value at undiscounted value; 为分析目的，用present value; 差价是equity

Temporary difference : expected to reverse
Permanent difference:  not expected to reverse, NO DTL or DTA

Temporary Timing Differences
Current liabilities, using installment sales metod for taxes and the sales method for pretax income.
Long-term liabilities, using the declining balance depreciation for the tax return and SL depreciation for the financial statements
Stockholder’s equity, unrealized gains or losses from carrying marketable securities at market value are deferred tax adjustments to stockholder’s equity.

Permanent Timing Differences
Taxable 和pretax incomes的差距，不会reverse
Permanent Revenue Differences, 免税利息收入，关键雇员的人身保险，Vertain dividends
Permanet Expense Differences, 免税利息收入，关键雇员人身保险，Tax credits
Statutory tax rate 不等于effective tax rate

Indefinite reversals
Treatment varies

Effective Tax Rate 有效税率
Statutory Tax Rate = 税法下的企业所得税
Reported Effective Tax Rate = Tax expense / Pre-tax income
Effective Tax Rate 1 = Tax payable / Pre-tax income
Effective Tax Rate 2 = Income tax paid / Pre-tax income

SFAS 109 Disclosure
Deferred tax liabilities, assets, valuation allowance (and change in allowance)
Unrecognized deferred tax liabilities due to undistributed earnings of JVs and subsidiaries
Current year effect of each type of temporary timing difference
Components of the income tax expense
Recociliation of income tax expense to the statutory tax rate
Tax loss carry forwards and tax credits

Warning signals
一些公司有很大的税前收入，可能采用激进的会计方法，会有低品质的收入。
资产消费的减少，预示temporary differences 的reverse，导致高tax payable。
重组费不影响税的cash flow，但会显著影响未来
因为tax law的影响，temporary differences 会reverse

Analyzing Disclosure
MACRS depreciation schedule for tax returns and straight-line depreciation for financial statements 导致Long term deferred tax liability，分析师要考虑公司的增长率和资产花费的水平来判断difference是否会reverse。
Impairments导致deferred tax asset，因为write-down of asset 立即实现。直到asset被卖，才会有tax。
美国要求用financial statement和tax用LIFO，所以no temporary differences。全球范围不一定。
重组导致deferred tax asset, costs实现，但paid才会计税；cash outflows会几年内实现
Post – employment benefits 和 deferred compensation 知道paid才计税，导致current deferred tax asset 或liability
deferred tax adjustment 改变stockholder’s equity 反映gains or losses in 市场价卖掉的可售证券。