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- 2011-7-11
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FRA and Equity Adjustments List
I thought it would be a good idea to compile all of the FRA adjustments that are required for analytical purposes. Any that would be used for FRA and Equity (FCFF/E, RI, Multiples, etc).
I've started a quick list below if you could add to it we can put together a nice list.
1. LIFO to FIFO - adjust inventory by the LIFO reserve, cash for the taxes due on the reserve, and shareholders' equity for the reserve less the taxes.
In the income statement reduce COGS by the CHANGE in the reserve and increase taxes for the CHANGE in reserve multiplied by the tax rate.
2. Treat capitalized construction interest as interest expense. Remove capitalized interest (net of any depreciation expense to date) from fixed assets. Add back any depreciation expense on the interest to EBIT. Add the capitalized interest to interest expense (this will decrease interest coverage). Add back capitalized interest to CFI and subtract from CFO.
3. Capitalize operating leases. Add PV of remaining lease payments to assets AND liabilities. Add back lease payment to EBIT and replace with depreciation expense and interest expense. Add back lease payment to CFO and treat interest expense as an operating activity and the principal payment as a financing activity.
4. Treat a receivable sale with recourse as a loan. Add back receivables sold to accounts receivable on the balance sheet and increase liabilities.
Remove the cash collection from the receivable sale from CFO and treat as CFF.
5. Replace IFRS pension asset or liability with the funded status.
6. Replace reported pension expense with economic pension expense. Treat service cost as an operating expense, interest cost as interest expense, and actual return as non-operating income.
7. Reclassify "after-tax" difference in economic pension expense and pension contributions from CFO to CFF. |
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发表于 2011-7-11 19:48
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