Non-cash Investing and Financing Activities | CFA Level 1 - AnalystPrep (2024)

FAQs

How to study FSA CFA level 1? ›

Examples include debt to equity conversions, asset acquisitions with liability assumptions, capital lease transactions and exchanges of non-cash assets or liabilities for other non-cash assets or liabilities.

The cash flow from operating activities depicts the cash-generating abilities of a company's core business activities. It typically includes net income from the income statement and adjustments to modify net income from an accrual accounting basis to a cash accounting basis.

These non-cash activities may include depreciation and amortization, as well as obsolescence. Property, plant and equipment resides on the balance sheet. These items are taken on the income statement in small increments called depreciation or amortization.

There are three main types of business activities: operating, investing, and financing. The cash flows used and created by each of these activities are listed in the cash flow statement. The cash flow statement is meant to be a reconciliation of net income on an accrual basis to cash flow.

Examples of non-financial assets include tangible assets, such as land, buildings, motor vehicles, and equipment, as well as intangible assets, such as patents, goodwill, and intellectual property.

The noncash activities may be included on the same page as the statement of cash flows, in a separate footnote, or in other footnotes, as appropriate. Following the principles in ASC 230-10-50-3 through 50-6, the following are noncash investing and financing transactions: Converting debt to equity.

Cash payment systems use paper-based money and coins as a means of payment. Meanwhile, in non-cash systems, payment instruments no longer use money in physical form.

What are examples of operating activities? ›

The purchase or sale of a fixed asset like property, plant, or equipment would be an investing activity.

By creating a detailed study plan, using high-quality study materials, taking practice exams, and joining a study group, you can increase your chances of passing the CFA exams independently.

Having said that Fixed Income, Derivatives, and FSA are the hardest level 1 CFA exam topics, it's time to rank all of the 10 level 1 topics by difficulty. Difficulty is a subjective criterion but this hard-to-easy topic hierarchy is meant as a guideline to help you approach CFA exam topics sensibly.

Is CFA level 1 hard? Yes, the first level of the CFA exam is the hardest of the three levels by pass rate. Historically, only 41% of test takers pass.