CCIR. Instructions Flashcards
identify and describe 3 methods of calculating equity
1) fundamental accounting equation:
A(X) = L(X)+E(X)= how assets are financed
2) from prior year’s equity and current year’s income
* E(x) = E(x-1) + CI(x)
* CI(x) = NI(x) + OCI(x)
3) sum appropriate line items from Statement of Financial Position - Liabilities & Equities pg20.11
* E(x) = PHE(x) + SHE(x) + nci(x)
describe 1 complication when calculating equity using method2
- assumes company didnot make certain kinds of transactions (i.e. divs)
- if dividends were paid, they must be subtracted from Net Income to calculate Equity
identify components of SHE (ShareHolder’s Equity)
CP-CORNA
- common shares
- preferred share
- contributed surplus
- other capital
- retained earnings
- nuclear reserves
- AOCI (Accumulated Other Comprehensive Income)
what is an unrealized gain?
an increase in the value of an asset or investment that an investor has not sold
does AOCI include realized or unrealized gains/losses on OCI?
AOCI includes unrealized gains on OCI
where is AOCI located in Statement of Financial Position?
20.11 Liabilities & Equity
it’s part of SH’s Equity
identify 3 most important pages in the Core Return
Statement of Financial Position - Assets
Statement of Financial Position - Liabilities and Equity
Statement of Profit or Loss
on which financial statement page is “Net Income” shown?
Statement of Profit or Loss 20.22
what is the formula for net income?
NI = ISR + NIR + OIE - Taxes + Discontinued Operations
ISR = Insurance Service Result
NIR = Net Investment Result
OIE = Other Income & Expenses
what is the formula for ISR?
ISR = TIR +NRE -ISE
TIR = Total Insurance Revenue
= sum of revenues from PAA, GMM, VFA contracts
NRE = Net Reins contract held Expense (adding because usually negative)
ISE = Insurance Service Expenses
