Basic Accounting Theories

Accounting - Part 2 (2022)


This eCourse consists of two modules. Module 1 describes in detail the structure and elements of income statements, including revenue, gross profit, operating expenses, operating income, interest income/expense, taxation, and the calculation of net income. The module also covers crucial accounting policies related to income statement-related concepts, such as revenue recognition and the calculation of diluted earnings per share (EPS).

The key focus for financial analysts is a company’s future performance against that of its peers. Module 2 looks at the key measures of company revenue growth and profitability that help analysts determine a company’s ongoing and future performance. The income statements of both US and European companies are used for peer group comparison.


On completion of this course, you will be able to:
- Identify the main types of revenue and expense items that appear on an income statement and the differences in presentation and layout between US GAAP and IFRS
- Recognise the importance of accounting rules relating to revenue recognition and the calculation of diluted earnings per share (EPS)
- Recognise the techniques used to analyze an income statement
- Calculate key measures of revenue growth and profitability
- Identify other key performance measurement techniques used in income statement analysis


Module 1: Income Statement – An Introduction
Topic 1: Overview of Income Statement
Topic 2: USGAAP Income Statement
Topic 3: Recognition of Revenue
Topic 4: Earnings Per Share (EPS)

Module 2: Income Statement - Analysis
Topic 1: Overview of Income Statement Analysis
Topic 2: Revenue Metrics
Topic 3: Margin Analysis
Topic 4: Common Size Analysis
Topic 5: Profitability
Topic 6: Key Performance Ratios


Relevant Subject
Type 1 - Dealing in securities
Type 4 - Advising on securities
Type 6 - Advising on corporate finance
SFC:1.50, PWMA:1.50
Non-Member: HK$675
All Member: HK$450
Staff of Corporate Member: HK$450