ADMN 3321H Lecture Notes - Lecture 4: Underlying, Westjet, Financial Statement
30 Mar 2020
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Chapter 15 shareholder"s equity corporate form of organization accounting for issuance, reacquisition, and retirement of shares: accounting for direct costs on issuance accounting for stock splits and dividend distribution. Presentation of se components capital disclosure requirements calculate and interpret key ratios. Not meaningful if entity reports a loss. Return on common shareholders" equity = net income preferred dividends / average shareholders" equity. Analyze a hybrid/compound instrument does it represent debt, equity or both. Understand major differences aspe vs. ifrs. Value comes from underlying instrument, index or commodity. Create rights and obligations that transfer financial risks in underlying between parties. Main characteristic: value changes in response to underlying, require little or no initial investment, settled at future date. Financial risks types of financial risk: credit failure to pay liquidity, market (currency, interest rate, other price) changes in currency, other than canadian dollars interest rates up and down. Accounting for derivatives is it a derivative: difference between a purchase commitment and derivative.
