Object Finance Analysis Forex

1. – What is a financial statement?
It is a document whose purpose is to provide information on the company’s financial situation to support decision-making.
2. – What is the financial situation in the company?
Is the situation that is according to the results once the operations have been performed to date or period?
3. – What is the point of contact between the statement of financial position with the statement?
The focal point is the profit or loss realized from the exercise.
4. – What statements do you know?
The income statement, the statement of costs of production, income statement and statement of changes in financial position.
5. – How do you determine the cost of sales?

Initial Inventory

+ Shopping
= Available
- Final Inventory
= Cost of sales

6. – How do you determine the cost of production and of sales?
The cost of sales shows the cost of production or acquisition, as the processor or trader of goods sold that generated the income reported on line sales.
7. – What is the difference between production costs and cost of sales?
The production cost is determined by a company dedicated to manufacturing and sales costs of a trading company.
8. – Why depreciation is an account that is presented in the income statement?
Because it is an operating expense, and overhead and expenses relating to the period (month).
9. – What do you mean the other expenses and other products?
Contains other non-routine operations of the business such as profit or loss of assets.
10.-In the general balance in the deferred tax assets are the concept of spending up What do you mean?
It is an expense paid in advance and covers legal costs to establish the company.
11. – What do you mean long-term liabilities?
Is fixed liabilities.
12.-In the statement of retained earnings in the financial expenses are the costs of financial position “do you mean, and cover these?
Are bank charges, bank service charge to transfer money from one locality to another?
13. – What is meant by transfer to statutory reserve?
Reservation is called for is a provision made by the company to deal with unforeseen and is legal because it is scheduled by the General Law of Commercial Companies and 5% of profits are to create or increase the reserve, this only when there are profits.
14. – What are the earnings?
Are the activities to be gathering from one financial year and are awaiting implementation.
15. – What are dividends?
Are the utilities that are distributed to shareholders?
16.-What does the life of a good?
Is the duration in which a good yield being in good services, the duration of use is established by law, as an example we can cite the cost of machinery where life expectancy is 10 years and the legal depreciation is 10% year.
17. – What can be varied at the discretion of the life of an asset, increase or decrease?
If you can be varied, but to increase the rate you have to ask permission.
18. – Does the company should reduce the rate of depreciation?
No, because it is a tax deduction and as such reduces the tax base.
19. – What time starts the book depreciation?
Depreciation starts when you use the right, taking up to a year to implement the depreciation, because otherwise you lose the right to apply.
20. – What is inflation?
Inflation occurs when money is growing faster than goods and services, the greater the increase in the amount of money per unit of production, the inflation rate is higher.
Is the continued increase in prices resulting from an increase in the amount of money and credit in circulation in respect of goods available?
Inflation is a disease, dangerous and sometimes fatal, if not remedied in time can destroy a society.
21.-Establish the difference between real and nominal value of money.
The nominal value is what is inscribed in the papers and securities, while the real value is the cash equivalent is at present an income or expense to be held in the future.
22 .- How does the inflation accounting information?
The counters are intended to provide an opinion on financial statements that reflect a situation close to the reality of the moment in which we live, a situation that increases when going through a remarkable period of inflation, with the result that the data usually are provided in financial statements are historical figures are distorted to such inflation.

The effects of inflation are not reflected in traditional financial statements, which cause information to be of reality, leading to an erroneous decision.

Moreover, in February 1980 appeared the Bulletin B-7, entitled “Unraveling the Effects of Inflation on Financial Information.” Bulletin This served as the basis for its practical application and hence establish a definitive and strict in June 1983 the application of Bulletin B-10, entitled “Recognition of the Effects of Inflation on Financial Information.”

23. – What restatement?
Update the information contained in the financial statements containing starting their value is affected by inflation and misinformation show which must be updated to know the real value of these concepts.
The application of Bulletin B-10 is required and we mentioned that only some accounts are feasible to be modified, ie, its implementation is partial.
24. – What is the restatement?
To observe the double or a “Suspense Account” at the end of the process of updating should be settled in order to develop the basic financial statements.
25.-According to the Institute of Chartered Accountants mentioned the two ways to carry out the restatement.
a) The Method of Adjustment for changes in the general price level.
Involves correcting the unit of measure used by traditional accounting, using constant dollars instead of nominal pesos.
b) The method for specific costs, also known as replacement value.
This is based on the measurement of values generated in her mind, instead of values resulting from exchanges made in the past.
26. – What are the monetary and non-monetary?

Monetary items.

Are those that are agreed and fixed in monetary units that will become future cash flows (inflows and outflows) and result in an inflationary environment amending its purchasing power, these items are in turn divided by nature into two categories :

Of monetary assets (cash and banks, fixed income investments, clients)
Of monetary liabilities (suppliers, sundry creditors)
Non-monetary.
They feature the face value increase roughly in parallel with inflation.
Disposed of through use, consumption, sale, liquidation and application of results.

As an example of non-monetary items are inventories, tangible fixed assets, land, buildings, machinery and equipment, distribution equipment.

27. – Why you must update the non-monetary financial statements and why monetary items should not be updated?
Monetary items precisely because they agreed in fixed amounts “are not updated, causing a loss of purchasing power when monetary items of assets, the explanation is simple: to become effective these items contain a lower purchasing power, reverse that seen in the passive monetary items, which are depreciated, or extinguish those liabilities currencies with lower purchasing power, resulting in a profit.
28. – What is the discount factor and how is it calculated?

Is the factor used to update the values of the property by the passage of time and due to price changes in the country have changed and apply the factors mentioned below.

To calculate the change in the value of the assets and operations in a period is used the adjustment factor corresponding to the following:

a) When the period is one month, will use the monthly adjustment factor is determined by deducting the unity of the ratio obtained by dividing the national index of consumer prices of the month in question, between the aforementioned index of the month immediately above.
b) When the period is more than a month will use the adjustment factor is determined by deducting the unity of the ratio obtained by dividing the national index of consumer prices the most recent month of the period between this index for the month old of that period.

29. – What should be taken into account when choosing the above methods?
The updating of accounts may be made through any of the methods:

a) Changes in the general price level and
b) Specific values or replacement.

Using them is to choose the company that wants to re-express the figures in its financial statements, taking into account that the adoption of the method is based on cost-benefit relationship and particularly in the information provided this most attached to reality.

30. – What is the specific cost method?

It is based on the measurement of values generated in the present, rather than values resulting from exchanges made in the past.
It is also known as replacement value, the replacement value means the cost that the company will incur the balance sheet date to acquire or produce a product equal to that integrates its inventory.

31. – How to classify financial information for restatement?
Classified as:

Operation
Funding
Investment

32. – What is the monetary effect of the first update?

The monetary gain for the period will be the results up to an amount equal to the net financial cost consists of interest and exchange rate fluctuations and, in general, all concepts that are grouped within the expenses account and financial products. The surplus, if any, will be the equity. Prevail the other provisions of B-10 regarding this concept, which establish that the adverse currency effect of the period must be charged in full to the results, and, in cases where the lender is financing cost is not recognized in statement of any amount on account of unfavorable currency effect.

33. – What is the monetary gain?

Indicates how the financial structure of a business will be affected in line with inflation. We consider three main types.

a) Long position or active
b) Short position or passive
c) Monetary Position level

34. – Where you put the money in the balance sheet effect?

The unfavorable currency effect of the period must be charged in full to the results, and, in cases where the lender is financing cost is not recognized in the income statement any amount on account of unfavorable currency effect.

35 .- What is best for the company to have monetary assets or liabilities?
We have liabilities should more money because they are absorbing the effect of inflation and therefore the company may have a favorable result from monetary position.
36 .- How do I update the inventory if they are controlled by average prices?
The amount of the update is the difference between historical cost in nominal pesos and the updated value. In case of inventory previously restated, the amount to compare against the new value will be the earlier date.

The inventory update can be done using the following methods:

a) Method of adjustment to historical cost for changes in the general price level. Using this method, the historical cost of inventories is expressed in pesos of purchasing power at the balance sheet date, using a factor derived from the National Index of Consumer Prices.
b) Method of updating specific costs. Value means replacement cost that the company would incur the balance sheet date to acquire or produce a product equal to that integrates its inventory.

For practical purposes, it can be determined by either of the following methods when they are representative of the market.

a) Determination of FIFO inventory.
b) Valuation of inventory at the price of the last purchase made in the exercise.
c) Valuation of inventory at standard cost when it is representative.
d) Use specific indices for inventories.
e) Use replacement cost if they are substantially different to the price of the last purchase made in the exercise.

37 .- How often is performed subsequent activity?

It can be weekly, monthly, semiannual or annual, that is, according to the periodicity of this information. Are updated for inflation
Another may be according to the company’s financial policies, as these are established according to the purposes of the same, so will have to conform to the provisions in these financial policies and perform as indicated on them.

38 .- What do you see in the updates for a month, in their historical and current?
What is observed in the updates for a month is basically increasing its value inflationary effect.

39 .- What is the sequence of the restatement?

The sequence is to update the historical figures from one year to present value by inflation.

In order to facilitate the monthly restatement of financial statements will be necessary to establish the methodology that we must step forward is as follows:

a) For purposes of conducting the monthly restatement of financial statements, it is essential that they have been previously re-expressed in the last period immediately preceding in order to have figures which will leave bases to perform restatement month.
b) It is necessary to historical financial effects for the months for which will be held the restatement of financial statements. As well as existing historical movements during these periods.
c) In the financial statements previously mentioned classify their games in monetary and nonmonetary classification because of its successful will depend largely on the success of the restatement.
d) Determine the monetary position result for the period.
e) The final inventory update was present in her statement of financial position relative to the month of the upgrade, for which we must cancel the update of the original made in the immediately preceding period.
f) The procedure to calculate the cost of sales update itself which must be expressed in terms of the items that compose it into pesos of the month referred to the restatement.
g) Fixed assets, accumulated depreciation and depreciation period results are expressed according to the restatement method chosen.
h) The equity restatement was made according to the items forming with the concept and the existing movements in the period of restatement.
i) pays off the account restatement and correction is performed on the worksheet that focus the historical movements of the month, as well as adjustments arising in connection with the restatement, and finally present the restated financial statements.
j) In order to systematize the monthly restatement of financial statements is proposed that it be done through the following cards:

E-1 CERTIFICATE
Schedule for determining the monetary position result of the period.
E-2 CERTIFICATE
Schedule for updating the inventory and determining the cost of sales.
E-3 CERTIFICATE
Schedule for updating non-monetary items (except inventory).
E-4 CERTIFICATE
Schedule for updating the depreciation of the period.
E-5 CERTIFICATE

Monthly worksheet.

These same cards are repeated monthly for each month of the year, for which only the initial exchange the month in question in the name of the card.

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