hi good evening everybody uh this is I am from ipfc Academy uh today's class is the first class for part one so before we start the class A few points to be noted number one please ensure that you have your mic muted and your camera Switched Off because the video will have distraction for other people uh number two if you have any questions while sir is teaching you can put it on the chat box which will be easier for sir to see and then maybe later when the time comes he will definitely uh get the questions answered and uh lastly uh just wanted to introduce you to Mr sargundi I mean Mr salgunty has been associated with ipfc now for around seven to eight months he has been training our CPA U.S patches for quite some time now uh he will be going ahead welcome sir to the same U.S batch hi everyone we will now be teaching the CMA us part one with us he himself is a CMA us certified plus he is an acma India thus he has done his CPA Australia so and he has a varied work experience with a lot of teaching experience uh in the background okay so uh the best thing is that you know his way of teaching at least I like it very personally I have been seeing a lot of his videos so that has been a very uh productive and I learned a lot of new topics from his videos so thank you sir thank you uh over to you sir to yourself shortly and then maybe start the class thank you thank you all right hi everyone how are you all good yeah welcome to the first class of part one part one CMA with ipfc yeah my name is uh bartender you can call me balasor okay thank you anirban for introduction nice introduction and we will make it more interesting for this batch and I'm sure we will have a added value for this students in terms of you know that they will be successful and they have taken all of you have taken a very very important step in your career of attaining certain professional courses and that too CMA us I being myself double qualified in the management accounting end public accounting and just be brief about me we will get to know each other okay so hold my 23 24 years experience once abroad in international locations I lived and worked working with the U.S corporations and European multinationals now so you can say hold my corporate life was abroad five years ago I came back to India and settled in Bangalore so I have my own management consultancy firm I advise some startups and during that process I got into this teaching for the last five years it is very very self-satisfies for me and because I believe sharing the knowledge sharing the experience making the topics interesting and I want to see and I have seen for the last four or five years in my Corporate Training Academy training there are many Bright Smiles when they call me after the results it was so it was so hard please please mute it Go picker don't unmute it yeah please yeah so it was so satisficing for me as a career and I allow this after working for almost uh more than 23 24 years in corporate and this is another side of the you know the way I feel it is very very good and satisficing than whatever we did it that was one stage and this is another career for me and I yeah we will make a great team and um I will assure you that I am going to hand hold you to that level of exam preparation that you will be hitting that exam like anything and getting cleared and I would like to say one thing that you have taken one major step and be with me learn the concepts do uh you know enjoyable learning you should not take it very very uh you know difficult sense and all the professional exams including this of course they are rigorous they are not like academic exam but what I would like to say to you is that you should enjoy the learning when you make enjoyable the concepts will become so near to you and dear to you and thereby when you start learning that Concepts and applying to the questions exam will be very Cakewalk yeah are you all ready are you already yes yes we will go we'll start yes yeah you have taken a very good step and will continue the journey come on come on come on yes yes you're already yeah let's start let's start before we seriously start yes one thing what is required is learning is one beautiful way it comes with some do's and don'ts and this is what I believe it will add value to all of your studies for example what I am going to do in the next 10 20 minutes is giving you entire overview of what is that we are having in part one CMA please don't switch on the videos yeah yeah because it will distract others whoever is switched on video and please you know unmute that so let's let me take you to that what is that in part one if I give you one book you don't think you will start directly reading from first page isn't it ah you will just flip through the book flip through the book and that is very very interesting we want to flip through this section this part what are the sections inside what are the pages inside and then only it will be interesting for all of you same thing you do it when I when I give you new book you don't start reading from the first page first word for sentence correct all of you right this is a natural habit right Mamta Manta John correct correct yeah so same thing you should do always always you should have a plan what is that insight what is that syllabus calls for so when you make that Journey right what is that bird's eye view then it's very easy for you to start and get going so in my classes at ipfc We Believe that you need to take lot of notes and also we will share with you at the end of the class class notes it will come to your group by email okay so that you can store it in one particular folder all of you open one particular folder and start saving all those things class notes whatever I do here will take screenshots and we'll send it to you and also at the same time I want all of you to take enough notes enough notes everything I cannot write everything uh you know it's not possible whatever I am telling you I cannot write it so when you are listening just be an obedient student remember your college days University days yeah just take enough notes are you all ready for that yes uh take enough notes yeah and you can stop me at any time you can send your questions in the chat box and I will tell you come on unmute it unmute it and talk to me at that time we will clarify your doubts okay so what is the CMA part one CMA part one it is financial plan financial reporting mainly financial reporting it consists of planning it consists of controls it consists of Technology technology these are the main things in that graph I'm not sure who is that video just a second yogita Desai can you please switch off your video yogita please yeah thank you yeah yeah you can talk to me at any time no problem okay so what is that first as you all know each part in CMA they come with a section six modules within it they are called six Master areas so section the a to f each part is having six modules when you qualify as CMA you will be known as having mastered 12 skill areas 12 skill areas in part one a to F in part two a two year so that is the program of CMA and you might have all the orientation you know what is the syllabus but here my intention is to give you that your plan of sessions you can expect from me and plan accordingly so when we are talking about section A which we are going to start after this overview section A comes with what we known as external Financial reporting popularly I use lot of acronyms is known as efr efr okay now what is in that side I will talk to you after five minutes 6 should be and section in my way of training okay we will take after section A I am going to take Section f okay this is what we believe it will add value to your studies immediately after a uh we are going to start F which is technology technology and Analytics Analytics in that order I am writing then we will going to start B which is planning planning budgeting and forecasting forecast then surprisingly for you I'll be taking d section d section D is a cost to management past management then we are going to touch C because this is the way you will learn beautifully these parts section c is nothing but B minus d that is you will be doing variance analysis etcetera that is Performance Management Performance Management yeah and then last we will take it up e which is internal controls internal controls so in part one CFA you will be an expert of six area skill areas that is why the title is financed voting plan in control and Technology etc etc I'll be very brief and this is my order of training and you can plan accordingly each of the sessions yeah what is going to come yeah is that but tonight when we are going to start section A we will not talk about other sections now because it will be too much at one time we will limit our discussions and we will start our journey in section A external financial reporting now before I start one thing one more thing you should all know U.S exams um right now you are enrolled for CMA U.S exams like CMA CPA CFA CIA there's so many they are all based on one unique idea what is that unique idea is that they are all tested on mild White inch deep concept mild wide inch deep concept Asia I'll talk about that later on okay Asia we'll give you don't worry on that we will cover enough okay my wide inch deep concept when I say mild bite inch deep that means I repeatedly I'm telling you these are the U.S exams Style qualified here also what is that we do we go very deep very deep in each subject each topic we go very very deep dive in the NCAA Indian CMA Indian CS ukca UK all these things this part of the world yeah the concept is we are going very deep and then get 50 and Aggregate and passing in four parts Etc that is one thing now when you understand this yeah the other thing is what is that we are not going to do Deep dive it is only inch deep Knee Deep but we are covering my weight yeah are you well understanding yeah visualizing yes yes that means in all my sessions and your preparation also should be like that and I am warning you statutory warning don't resist too much into any topic one topic and spend a lot of time there not required stick to what is my study plan at ipfc and we add value to that on this concept all our trainings are based on this concept you will be tested on globally relevant syllabus globally relevant to topics not going deep in any topic that is how all these U.S exams style this is very very important in the first class for you to plan your studies now let's get back into action section A external financial reporting now when you the English is a very very simple language and accounting is uh not a rocket science what is these words means to you anyone please unmute and talk to me don't be shy whatever in your mind when you see external financial reporting I want participation my classes are not possible yeah go ahead anyone go ahead it is about reporting the financials of a company or an organization in the form of the company's standard reports like profit and loss uh balance sheet these are all Financial reports of a company okay okay Financial reports you said but what is the significance of the word external thank you thank you for your participation yes it is for the external users of the company external users or financial statements of a company other than the management um the government agencies the banks the lenders and the creditors is it Asia speaking yes sir ah very good Asia very good everyone you can use Emoji scraps very good explanation as you are very welcome it is for external problems correct yeah please please don't unmute Asia very nicely explained this is for external users everyone very big clap very big clap so external uses she explained who are those who are those yeah so this is meant for them now but you are studying CME you were studying CMB what is CMA what is the acronym for CMA don't get me wrong what is our name you are studying CMA Certified Management account management accounted so what is the significance of management accountant internal person right yeah are you all understanding what is your role internal person right yes yes yes huh getting it you are you are a person who will add value to the company for internal Edition making with the Business Leaders but now what is this external financial reporting how ah now you will be wearing a cap of external accountant so sometimes you have to wear the cap if you are a CMA ah if you're a finance manager you should know what are the financial reports and you should understand how they are prepared so in this part you will be becoming mini CPA got it got it what is CPA what is CPA certified optional account public accountants yeah external they are audit and tax experts they are financial reporting experts in this section you will be meaning CPA you know that yeah nice nice bhavani nice yeah you will be studying what they study in detail but limited mild wide inch deep why this is required for CMA yeah you have you are in charge of the department finance manager accounting department reports to you so you should know how they have prepared this debit and credit ah so you will be becoming mini debit and credit accountant um and then all other sections if you see that is a real management accounting that is a real internal decision making so in this what I am a wants from you is that you know how those financial reports are presented and what is the accounting framework no problem why is no problem I will cover all those things boys talk to me boys boy stuck to me yes sir with the code no problem absolutely no problem and what is required for you as a non-commerce background I'm going to cover that clear not here you will not be becoming full debit and credit accountant maybe some knowledge is required only some knowledge is required the bridge knowledge I'm going to cover in my sessions don't worry okay yeah because this program can be done by any discipline don't worry non-commerce background Commerce background don't worry okay so external financial reporting so what is that you will be doing you will be learning here there are two parts within that we are dissecting it you should know how the financial statements what are the financial statements how they are presented in US because there are two accounting Frameworks in the world one followed by U.S and he was studying U.S exam that is called generally accepted accounting principles Gap Right Now take notes take notes so we are going to study financial statements presentation aspects that's what we are going to start now presentation aspects as per us Gap for those who are from non-commer's background Gap means generally accepted accounting principle which I am going to type here now you can also watch what I'm writing okay this is the accounting framework in us and internationally we have one what is that anyone internationally we have something why go ahead IFRS uh what is IFRS stands for genome and financial reporting system International financial reporting systems very good very good very good ah please type it help me very good you should all participate it okay good that is what we are going to feel the other major section you will be little bit expert expert in understanding major items in financial statements what is that how they are presented how they are valued so the next thing is recognition measurement measurements valuation and disclosure of major I write lot of acronyms but when I say please listen to me major financial statements items items here here for some of the items you will be learning ah some minor differences in gap and IFRS how America treats one particular items in balance sheet for example and how International uh you know IFR is treated that knowledge is also required but not going very very deep not going very very deep next the last section will be some entertaining Theory which is called integrated reporting integrated reporting we will come to that we will come to that okay okay clear clear clear clear taking notes shall I delete shall I delete this please yeah I thank you okay now now you know what is the journey waits for you yeah we will start we will start so now when I say financial statements presentation aspects now again don't worry you have studied here don't worry my job is to make you expert in terminology of us now when we say financial statements anyone what are those financial statements include what are the what are the items included there what are the statements included there sorry voice uh piano the balance sheet trial balance and yeah okay fine uh anyone Mamta you want to speak Manta pnl balance sheet cash flow and statement of comprehensive a very good very good very good okay some of you told three some of you told four some of you told including General lecture etc etc but let's make it very clear there are six there are six okay ah one two three four five six this is we are talking about terminology you are all very well profit and loss account balance sheet ah yeah there is no disrespect but in America the terminologies are the modern terminologies even in India we use that if you carefully see so for profit and loss account it is already becoming traditional name so in America it is called statement of income popularly acronym is s-o-i-r I bar s income statement that is profit and loss next one statement of only one person Mamta told me no statement of other comprehensive income comprehensive this is popularly known as soci next statement of financial position Soph is a modern name for balance sheet is getting clear it's getting clear now yes next statement of changes to equity equity s-o-c-e [Music] statement of cash flows cash flows socf then notes and disclosures notes and disclosures are these are the six meaning six statements within that Finance statements when you see financial statements as a set whenever we talk about financial statements these are the six items many of you told me ah but here and there and somebody told me a general ledger trial balance no general ledger trial balance those are the bookkeeping yeah and trial balance is needed to prepare all these things that does it make sense now yes madhu Malini yes are you all getting it yes take notes take notes um ah and always before I start any problems Etc my way of is first you should understand the flow the theory Theory application of theory is what you make is a professional ah not jumping into problems and doing here and there you have to go methodically maybe you will hear a lot from me tonight but yeah we will start problems maybe at the you know end of the session or in the next session don't worry on that we will as I Promise You The Continuous synchronized learning doing Theory application of theory and attacking problems with the exam techniques all those things will be done okay next now if we carefully see from gender Ledger trial balance is done from trial balance there are three up to here one two three uh you can say that they are primary Financial States especially statement of income income statement profit and loss upon whatever you call it and then balance sheet comprehensive income I will explain later on especially income statement balance sheet these are the primary financial statements which are prepared based on the trial balance when you see changes of equity cash flows item number four and five they are not prepared directly from trial balance they need the inputs from income statement and balance sheet hope all of you are taking notes yeah yogita yes yes many of you might be working many of you might be working if I give you trial balance you will not start a statement of changes to equity isn't it correct ah those trial balance is used for profit and loss account and balance sheet once those primary things are ready then the other things will fall and this one also you should know now we are going to attack one by one as part of your syllabus and what is required what is required from the U.S Gap perspective from the U.S accounting framework generally accepted accounting principles we need to understand how each of these financial statements are presented or presented there is an order there is a terminology which differs from internationally and this is U.S exam you should know the terminology and respect that okay so now let's take for example some basic things in that income statement okay now before we start anything going deep into each one mile wide inch deep not too much sleep so what is that I just said and you all agree that there is accounting framework Gap at IFRS and India Indian Accounting Standards we are transitioning to IFRS some stage is finished whether it is Indian Accounting Standards whether it is IFRS whether it is Gap they are all based on one mother concept there is one basis of accounting for accountants maybe you have studied in 11th grade that concept that basis that is the overall tree for any framework for accountants bookkeeping Financial accountants there is one mother concept all these things are based on cruels accruals is the basis somebody who is from non-commer's background please pay attention and everyone accrual's basis is the basis of accounting is the is the top that is the root of the accounting tree that is a root all other Frameworks whatever we talked about that is based on a cruel basis so now what is that accruals what is that accruals anyone anyone General meaning of accruals boy don't be don't be shy don't be shy for for materials or services the point at which we either we get the benefit of the uh from the service service provider say we are a customer so the point is suppose for a material in a company we the goods receipt note that is when we receive the good we capture it as accrual foreign [Music] yes yes thank you thank you okay we explained the nice process of one of the item which is estimated as accruals but the general word approvals anyone before I say yogita go ahead is it a provisions superb who is that who is that provisions Anand very good claps claps on and very good so it is having some Provisions it is having some estimates judgments judgments of the managers ah so opposite of accrual basis is what accruals it consists of lot of estimations lot of estimations provisions judgment while preparing financial statements so whether it is Gap whether it is IFRS entire Frameworks are based on this root of the tree a cruel's basis so if that is a case it includes lot of cluttering then there is another one opposite of that what is that somebody wrote cash cash is very good in cash this is what we do we record transactions uh when there is actual receipt actual payment correct correct Cash basis is based on transactions recorded on actual receipts and payments correct correct all your understanding yes yes and you have to learn all these Concepts keeping in view that you are working for a nice Corporation U.S Global corporations not for small small companies these syllabus is made the CMA syllabus you are going to be professional and all you should have thinking from the larger perspective then only will understand these things now what is the cash basis who can use that cash basis is also there I use that you I use that for my consultancy and training business yeah small small companies small entrepreneurs small business sole proprietorships right in Indian textbooks is 11th and 12th grade yes sole proprietorships yes bhavani correct come on come on come on and those are all on cash basis they require debit and credit on cash basis whereas Global corporations and all other than that they're all Anand poets you know who do not have the conversion process in the account they mainly use the cash basis accounting yes Cash basis that's it that's it yeah very good very good now this is the one this is the mother principle which is adapted there in all the financial statements now what is that you understood all the financial statements what you are going to learn is based on accrual cruel Cincy clear clear all of you are getting clear we are not going to understand from sole proprietorship partnership small medium no no no this is the global exam okay next next what is that we are going to hit now income statement not going very deep now when you see income statement of profit and loss account just to visualize it just visualize it visualize what are the major items you see there what are the major items you see profit and glasses oh my God very good yeah RCA superb okay ah now I'll put in simple way simple way um income statement it includes all those things we will go through a nice skeleton format which I'm going to write it now so before that we'll put it in a nice fashion nice fashion one startup for the equation all the major heads now can I put like this revenues less gains minus expenses minus loss is equal to income or loss in bracket how how does it look now yeah nice no nice no right correct clear clear clear yeah these are the major things yes yes yes I inside of it we will go later on clear clear this is called income statement equation how is it how is it gopika gopika clearly all of you income statement equation under that again we have to go under that we have to go again so now now now now we have to little bit dissect so what is that what is that word why we are putting like that what is the significance of that when I say revenues and expenses there is one meaning and then gains and losses I am putting one more parenthesis so now what is that you are going to get revenue and expenses gains and losses any idea any idea so revenues and expenses are matched are matched matched for daily or recurring items correct correct are you all getting in the word recurring your all accountants correct correct your study most of you study Commerce is accounting yes what is recurring occurring daily daily daily correct correct correct yes yes ah now when we talk about gains and losses of course there should be some different meaning so what is that gains and losses they are one-off events non-recurring nature non-recurring they are not happening day to day day to day these are the words you should remember recurring non-reccurring now another way to look into that another way to look into that revenues and expenses are from from main operations main operations for which the business is set up it is ongoing transactions for the central to the operations hmm yeah main operations when we say gains and losses technically and these are called poor ancillary activities ancillary and scenery means not to mean it is happening one or two times in the year in the year what are those examples of non-recurring forget about recurring is easy non-recurring what is the examples what are the examples of gain non recurring stainless property yes sale of used property correct next gain on sale of gain in foreign currency exchange gain in foreign currency if it is not Central to the operations examples can be gain or losses on sale of old fixed asset you don't sell the fixed addresses for a day today right you need fixed assets to run the operations at one time when the deposition is over when the usefulness is over you are going to sell it off either you are going to make gain or loss that will be adjusted in that so are you all checking notes and they were taking notes get used to me okay okay okay okay clear clear clear now I am going to write now us format U.S format of how they are going to present income statement and then we are going to take some questions okay before that before that when we say income statement what is the header proper header income statement after that what here ABC Inc ABC Company Inc is incorporated that is in America ABC Inc income statement what is the title what is the title it carries there is a continuation profited loss account title title there is one sentence goes on the statement of income ABC Inc for the period or the period um for the period ending correct ending of period means it can be anything question yeah period can be quarter month year yes for the period ending if we think year ending in America they write like this 12 31 your questions will be like this based on this date 12 31 2021. I in India we write 31st 12 20 21 right yes gopika correct bhavani yeah correct correct yes first is weight then month then year uh in America first they write month then date then why why Always you should get used to all these things in the exam yeah 31st to December 12 31 they say 12 31 yeah this is American Style now you see that for the period ending so when I say 12 31 this company might have started on January 1 most of the American companies follow January 1 to December 31 calendar year as their business here however however it depends a gap gives freedom Gap gives freedom to the listed companies if you see apple apple Microsoft Etc they don't follow January 1 to December they follow 12 months but maybe from August September to August July to June it's possible yeah most of the financial statements if you see it you will see um that behavior it's okay all Gap wants is to produce 12 months they can Define what is the 12 months this is also an important thing you should not now skeleton I'm writing skeleton and all these financial statements you should understand and most of the syllabus you should understand from manufacturing companies perspective not a Trading Company clear clear clear ah now let's go and write this is a preparation please be attentive and write with me practice that so now sales I am putting dollars XXX minus cost of goods sold I am putting asterisk here I'll come to that equation later on learning equations skeleton equations is very very important then this is called gross profit minus minus in America again terminology should be very careful it is called operating expenses operating expenses now otherwise known as non-manufacturing expenses now I'm writing to Star here that includes that includes two star that header includes General and admin I am writing acronym please write full General and admin are you all writing are you all writing huh an end Chait jafruddin Muhammad G and a tell me yes no s no don't put me in blind yes General and admin selling and distribution selling and distribution clear clear then R and D research and development suruchi satiraj shadab getting it so General and admin selling and distribution search and development are the other sub heads in operating expenditure which is otherwise known as plain language plain language non-manufacturing so that means cost of goods sold is manufacturing of course so once we do that what we will get is the operating income operating income popularly written as o i and you please continue down due to lack of space I am writing on the right side okay you guys continue down are you all with me in your notes you continue down okay so after operating income plus or minus other gains this is what we talked about non-recurring other gains or losses you continue continue I'm going to erase this other gains and losses hmm once you do that it can be gain or loss that's why I'm writing plus or minus at that point it becomes ebit somebody writes help me become assistant professor what is it yeah earning before interest and tax earnings before interested tax bill can you please type that in the chat box for others UK ebit ebit earnings before interesting acts no that will become our next minus interest expenses now you call it as e b t earnings before taxes minus tax it will become what is that anyone High net income net income in usual cases net income who said net income Asia Asia you said right yes so in usual cases it becomes net profit or net income but we are understanding we are understanding this American terminology there is some events the way Gap retains this okay not e80 or net income is same but it is after all so now right now for most of the global corporations American corporations listed companies are generally they don't call it as eat or net income right now what they call it as income from continuing operations continuing operations okay lie down write down write up are you there with me income from continuing operations um actually it should be net income but right now we are not calling it as net income we are calling it as income from continuing operations because oh because for these companies most of them you see in the annual report these companies they call income from continuing operations because they have a discontinued operations they have a discontinued operations so continue down continue down continue down oh I don't have space okay ah after what write like this plus or minus plus or minus below below that continue plus or minus discontinued operations net of tags net of tags after that it will become net income or loss at income or loss so you wrote one page list yes right now I'm writing side by side you might have continued one page right now yes yes yes RC I'll talk to you ebitda is a non-gap measure okay and we are not going to show you pittada in public financial statements that is used for internally calculated separately clear Asia we are not going to show on the main part of the income statement that is illegal as per Gap ebitda is for internal decision making so now what is the example of discontinued operation I am going to talk about it with the with the example I am going to solve it okay okay okay you wrote down now you wrote down now all of you yeah there is a particular emphasis on that discontinued operations that I will deal with it that I will deal with it just to give me some time so now let's go now by the way whatever we wrote now you see so many prophets are there here gross profit is there operating income is there if it is there inhibit is there income from continuing operations is that net income is there that is why this is known as multi-step multi-step income statement clear clear clear taking notes it's called whatever I have written here it's called multi-step income statement the feature of multi-step is that showing of gross profit is compulsory whenever you see financial statements of American companies if you see the word gross profit that means that company has presented in multi-step format so that means there is another single step shall I delete this shall I delete this yes should I delete can I move on and then we will take up questions and we'll take up questions now so ah now that means there is a single step income statement these are all two ways of Gap presentation in single step income statement all you are going to do is you show all revenues on one side all revenues on one side that means sales gains other income on one side minus all expenses on one side that is cost of goods sold General and admin r d etc etc and then you arrive at uh income from continuing operations or whatever it is what is the exam purpose what you should understand is that single income statement does not show does not show gross profit the gross profit is shown in the multi-step difference between single step and multi-step presentation as per Gap is showing of gross profit okay now after this let's go let's go and then we will concentrate with the problem the discontinued operations okay now just hold on are you all seeing the screen we'll take up questions now yes sorry we'll see but that's the gear in multiple step income statement what's the question one minute in multiple step income statement all of the following are included in the operating section except dividend Revenue is one of Revenue it is not recurring maybe you can argue it is for investment companies yeah those who are doing investment companies that is a main operations but generally what I said all these syllables you should understand from manufacturing companies perspective so in multiple steps yeah and the operating section the main section you don't include okay next we will talk about cost of goods sold all of the following are defined as elements of income statement except ion Equity very good gains and we'll come to that numbers later on now please pay attention I want someone to read it nicely Asia go ahead read with the a b c d like that go ahead in recording in recording transactions which is one of the following best describes the relation between expenses and losses a losses are material items whereas expenses are immaterial items losses are extraordinary changes to income whereas expenses are ordinary changes to income expenses can always be prevented whereas losses can never be prevented losses or expenses that may or may not arise in the course of ordinary activities hmm best describes the expenses can always be prevented whereas losses cannot can never be prevented yeah there are expenses or may not arise yes sir that's the game yes D losses are expenses that may or may not arise in the ordinary course clear that's what we defined right ordinary main operations correct correct correct yeah yes yes yes sorry over p okay you tell me losses are extraordinary changes to income no need for no need for losses to be extraordinary correct okay but uh no no no no B the word extraordinary is misleading right it can be ordinary also correct okay yes loss and sale of fixed asset it need not be extraordinary okay extraordinary maybe fire or something ah that is fire natural disastrous now war is going on yeah so there are two that is occurrences either it is ordinary or extraordinary yes losses can be ordinary as well but the main thing is the course of ordinary may or may not arise in the course of ordinary activities [Music] yes you're right got the clarification ah you see that the word and all of you pay attention even in your real exams they highlight that best raghuveer best describes the relation clear and while you were there while you were there the financial statement that provides a summary of the firm's operations for a period of time summary of operations for a period of time income statement of course we'll do with the numbers later on which one of the following would be shown on a multiple step income statement but not on a single step income statement close cross profit of which that is the main difference main item suruchi Simi are you all getting it um okay now that opens up somebody asked me what is that discontinued operations Etc now some questions and one more thing in the CMA exam from this area I'm talking for the last one hour no questions will be asked on the preparation of income statement preparation of balance sheet is it are you taking notes exam strategy you should have don't don't start preparing multi-step income statement Etc Clear care clear that is not tested yogita mendra are you all okay with me ah take notes no need to start preparation of uh income statement and balance sheets no those questions will not be asked that is very Elementary so now within that in that multi-step I wrote I wrote income from continuing operations and then I say it plus or minus discontinued operations net of tags net of tags that can be plus that can be minus and this is what we have to discuss from the exam perspective this is very very important then we are going to show it as net income or loss or loss now let's pay attention to that and we are going to do solve couple of problems for major American companies and I forgot one more thing all of you take a note now you please download download any us company us company annual report 2021 I have written in the chat box that is one you should keep it ready in my and you can use it in the classes you can read for a very nice learning you will get it a shock yeah and when you Google search any of your favorite company preferably preferably one Manufacturing and one service type service type any of your favorite American companies and how do you check that how do you check that in when you do Google search search like this if you want to download Apple such like this apple form 10K 2021 foreign year 2021 and while taking looking at the check uh I'm writing I'm in the chat box clear clear Channel come on come on come on come on John tell me yes no yes no it's not so many Google search it's up to you it's up to you guys I'm not going to tell you so whichever the way you like it you take that too and store it in your one folder now are you all preparing one folder for balancer yes I told you I'll send you some gifts periodically huh in your computers huh all of you promised me all of you promise me put one folder CMA part one balasor okay I'll keep on sending some notes uh you can enjoy the color thing and you can also put this downloaded things there why I am telling you is that you will learn more nicely practically so now let's get back discontinued operations for most of the companies you will see this item what they mean is that discontinued operations can take two forms one discontinuing operations but it is not it sold now whenever we are talking about operations you should understand one word is be you strategic business to connect strategic business unit the Strategic business unit can be any product line any product line any Department any geographical line any subsidiary clear clear well understanding now how this is all game plan so now what happens first thing due to strategical shift the CEO might decide we are going to stop operations in Russia yesterday news yes correct yesterday news two three American companies announced we are stopping our operations in Russia yes yes we have clear clear including yeah Facebook Etc Meta Meta so now they have taken some decision to continue to discontinue one geographical region Russia waiting for some decision later on so right now it can be like putting a pause putting a pause in the operations Russian operations full stop pause and then we are going to decide what we should do with that so in that case definitely there will be laws loss loss clear clear operating laws operating laws because all those things should be paid now fixed cost must be incurred correct rent Insurance all those things are going right only business is stopped operations is stopped now the next one is very very interesting this is the real killer ah we are discontinuing any product line any country any subsidiary any geographical line any subsidiary for intention to sell it and we sold it we sold it so gay or laws on sale off discontinued operations discontinued operations that is also discontinued operation so now we have some of the all these big big companies they have one or other problems they have sold one subsidiary to another company right now they don't want it because their it has become non-core asset for them maybe they closed chili operations Chile business they sold it some of the company maybe they sold it some African business so the sale of sale of that operations after discontinuing for a while that leads into either gain or loss hmm so now that we have to adjust and then we are going to arrive at a net income or loss now let's take with the numbers you will enjoy it now let's go here okay how much is the net income following information pertains to corporations income statement for the 12 months just ended the company's income tax rate is 40 percent discontinued operations in bracket means what Ibrahim in bracket means what Gopi close so they have discontinued they have sold it uh it is lost it is lost income from continuing operations already deducted because EBT minus tax seventy two thousand cumulative effect of the change in accounting principle they are confusing you this is nothing to do with net income uh because this is adjusted as a prior year adjustment when we come to retain the things retained earnings it is an item to be discussed in the statement of changes to equity it is not going to affect cumulate to affect all those things now we are going to do how to present this so starting is income from continuing operations seventy two thousand okay now what I said right now minus so it is a loss from discontinued operations for a better space let me just do it I'll write here 72 now I am going to write inside 70 000 and I am written last that means it is negative so to be best we can put negative now now please pay attention if you have a loss or gain on discontinued operations what I wrote we have to adjust with the tax this tax is already adjusted this is EBT minus tax this has come already but now for this we have to adjust separately tax what is company's tax rate 40 percent particles I mean as usual I am calculating 40 percent on Seventy thousand how much is that twenty eight thousand twenty eight thousand s now please pay attention I am writing it as positive because this is tax on the loss it is called tax benefit tax on loss is a benefit we are not going to pay taxes but loss is reducing our taxes tax benefit our tax saving that is why I am putting Plus and now outside how much I should take it outside how much I should take it minus forty two thousand minus forty two thousand so my net income is thirty thousand thirty thousand answer is a word goes to be sir who is b sir correct correct correct no value in means right award goes to be our goes yeah whenever I say be yeah yeah we'll share that a lot so now let's always learn like this always learn like this you have two balances yes oh yes Bala oh he is also his mother oh my gosh my name is okay but right now in my period you should just say balance okay next now don't leave this question you should you should learn like this now I am going to put another one here I'm going to take 72 000. 72 000. now assuming there is a gain hmm instead of last there is a gain same amount gain from discontinued operations same amount I am going to put 70 000 inside gain means Plus or while observing cable um yes zafruddin yeah game but now I'm going to calculate tax and this attacks on gain tax 40 percent now gain is 28 000 tax is 28 000 on gain outgoing company has to pay tax on the game that is why now 28 000 I am putting it as a bracket so outside it it will be plus forty two thousand and net income is what happens is that one one four right s clear now clear now and this is the most tested question from the income statement in IMA suruchi so Richie can you speak to me suruchi hi suruchi where the audio feeble now 11 30 yeah your understanding yes yes I'll add all those things in the notes you will I told you I you will get a gift all of you will get it after the class yes got it hmm okay so now that's why I'm taking screenshots you will get it now guys now guys read this um your audio is not good anyone with a nice no background noise I want nice reading one common volunteers come on Malini Malini okay little bit loud little bit louder according to U.S Gap where all the income statement should be a multinational company report on the loss from the disposal sale of a major operating unit 40 loss free tax in a separate section between income from the operations and income before income tax B report the loss of net of tax in separate section between income before tax and income and income see report the loss net of tax in a separate section between income from continuing operations and net income T report the loss three tax in a separate section between income from continuing operations and net income thank you thank you nice reading take your time very good very good very good I want majority answers majority responses in the chat box Muhammad Numan vendra mendra see Kazi it is C right just now what we did separate section between income from continuing operation and net income and we are showing net of tax C correct correct that's what we did right that's what we did right now if we get stuck if you get stuck you have to apply the theory and you have to use my techniques exam techniques if you get stuck what is this so many words first apply the knowledge apply the theory and remember that wherever we wrote discontinued operations net of tax net of text net of tax that means whenever you are reading that a is out a is written as pre-tax these out three tags correct correct why is mice Malini jignesh are you understanding ah from our mind we should remove yeah this is called elimination technique elimination technique is a very good strategy technique when you are get stuck with lot of words lot of words with the sentences so when you remove that A and D from your mind A and D then the battle is between B and C and most of the time you will be very correct in choosing that how is it how is it madhu yes Malini yeah those who got stuck those who got stuck ah this is what you should be doing it this is called you know applying the theory uh learning the concepts and having some techniques technique techniques with lot of words you get stuck ah next though it is not required cost of goods sold and all we will deal with that how to write cost of goods so thank you thank you thank you a high five high five then before we wind up tonight I don't want to be overwhelming tonight taking all the two hours but one small thing yeah is that the next statement we will take this up in the next one statement of other comprehensive income now just understand this this is a special uh item you will most of you might have seen it uh many of you might not be aware of and not heard of other comprehensive income whenever we are talking about other comprehensive income in US no there are one two three four items that you should remember um there is a way to present it this is a small Theory what are those items either you can show oci immediately after net income or you can show it separate statement when you show it as in continuation you should change the header statement of income and comprehensive income if you show it separately yeah statement of Inc income until net income and later on statement of other comprehensive income there are four items we will deal with that a small 10 minutes Theory which I don't want to overload tonight this is a first class let's go smoothly there are four items you can think it has a non-owner transactions non-owner transaction they don't fit in they don't fit in uh in the main operations in ancillary operations in discontinued operation in extraordinary things but these are separate so I'll deal with that small 10-minute talk when we meet in the next session and we will carry on and we'll try to finish there is an order of showing the balance sheet items that we have to learn and again no preparation of balance sheet there is the order you need to learn just like a skeleton income statement you will learn skeleton ballot sheet and then very very important from this financial frequency is that you should become expert in preparation preparation of statement of cash flows and then ah some reconciliation schedules in equity those are most statistics from here income statement concentrate on the adjustment of discontinued operations and when we go on in balance sheet they will not ask you any questions in oci they will learn to ask you any questions but yeah very very important questions we are going to spend a lot of time in how to prepare cash flows how to prepare reconciling items in statement of changes to equity those are things are tested and after that we will there is little bit technical things as we go along as we go along major items we will test it okay so with that yeah good night good night I'll send you class notes you all download that's your favorite um annual reports and I'll see you in the next session okay and somebody somebody Asia Asia ah I see are you there um in each of my session I want you to like a class representative yeah uh you should tell me sir you you left where here Asia okay you say sir you should start from statement of other comprehensive income otherwise you see uh mine I'm having a busy schedule back-to-back sessions corporate training yeah correct uh I I speak about CMA I speak about CPA so there are so many things and then by the time I see you I forget what I did okay just remind me that thank you see you see you soon bye God bless thank you foreign foreign