Bond Yields and Return Calculations
After completing this reading, you should be able to: Distinguish between gross, and net realized returns and calculate the realized return for a bond over a holding period, including reinvestments. Define and interpret the spread of a bond and explain…
Machine Learning and Prediction
After completing this reading, you should be able to: Explain the role of linear regression and logistic regression in prediction. Evaluate the predictive performance of logistic regression models. Describe and apply methods used to encode categorical variables. Discuss why regularization…
Machine Learning Methods
After completing this reading, you should be able to: Discuss the philosophical and practical differences between machine learning techniques and classical econometrics. Compare and apply the two methods utilized for rescaling variables in data preparation. Explain the differences among the…
Components of a Company’s Defined Pension Costs
The periodic pension cost of a company’s defined benefit plan is the change in the net pension liability or asset adjusted for the employer’s contributions. The following make up a company’s defined pension costs: 1. Service Costs Current service cost…
Measures of a Defined Benefit Pension Obligation
The pension obligation is measured as the present value of future benefits that employees earn for services provided under both IFRS and US GAAP. It is denoted as the present value of defined benefit obligation (PVDBO) under IFRS and projected…
Types of Employee Compensation
Compensation to employees plays a critical role in attracting, retaining, and motivating talent. For numerous firms, compensation constitutes the most substantial part of their operating expenses, thus making human capital management pivotal. Types of Compensation Short-term Benefits: These are benefits…
Classification, Measurement, and Disclosure under International Financial Reporting Standards (IFRS) for Intercorporate Investments
Intercorporate investments are investments in the debt and equity securities of other companies. Companies invest in other companies to: Diversify their asset base. Increase profitability. Enter new markets. Gain competitive advantage. Deploy excess cash. An example of an intercorporate investment…
Effect of Different Accounting Methods for Intercorporate Investments on the Financial Statements
Equity Method The equity method of accounting provides a more objective basis for reporting investment income. The investor is required to recognize income as earned rather than when dividends are received. Thus, an equity investment is reported as a single…
Comparison between IFRS 17 and US GAAP
Fair Value Option A fair value option is an option to recognize an equity method investment at fair value at the time of initial recognition. Under IFRS, the fair value option is only available to venture capitalists and unit trusts….
Considerations When Evaluating the Effects of Regulation
The laws and regulations in a market can take different structures. Further, the laws can affect industries and individual companies differently. Therefore, regulation analysts need to understand and predict the impact of proposed new regulations. Similarly, they should analyze varying…
