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This place works best a couple of months leading up to the exam, not the week following the exam. Where were you all this time? Are you seriously trying to disguise the fact that it was the actual exam that prompted you to these queries? Or are you getting an early head start for L2 again?Cynical Man wrote:
I thought that what this forum is about. To ask questions about the finance-related topics and provide our subjective responses. I don’t see anybody talking about the actual test material, at least I hope so. I am also interested to understand how assumptions impact ratios.Rising Alpha wrote:
I guess you should check these formulae, but if you listed them, you’d have an idea of the direct or indirect impact on them.
We cannot give more details here, otherwhise we’d violate Standard VII.
on pointCynical Man wrote:
for me, CFA is not about taking the test and forgetting stuff afterwards. i m planning to use this information and find it very helpful to read the discussions.
I had not seen the person asking the question refering to anything specific or anything related to the actual exam. neither anybody on the thread, therore, i have no clue what you are talking about here.
i am saying that it is importatnt for ppl who work in finance to lear (in fact it is a part of code of ethics per the CFAI, to encourage peers to learn) and reading and discussing these topics is important regardless, if you passe, failed, taking again, already a charterholder, or whatever else.
But I am only interested in whats in the curriculum since that is what we are tested on. I read so many articles that mention they are ignored. How can you ascertain whether assets or liabilities increased/decreased if discount rates increase. If rates increase, you get higher funded status, lower PBO lower service and interest costs. This has nothing to do with total assets or liabilities on the balance sheet, since one can increase or the other could decrease.Anbu_ wrote:
If we’re here to learn and nothing else, why tie ourselves to what’s in the curriculum? Here is an article answering your question: http://m.pionline.com/article/20150707/ONLINE/150709934/discount-rate-ri...
Parkway wrote:
I didn’t take the test this time, so I can comfortably speak and know I’m not discussing things from the exam.
Given that the net pension liability or asset (with a ceiling) is directly reflected in the BS, I would expect the ratios to be affected, and calc the effect according to whatever’s reflected in the statements.
To the extent that pension assumptions affect the statements, they will affect the ratios.
This is a general question, say for example, the discount rate increases, how would you be able to say assets/liabilities increased/decreased, and how would it impact the leverage ratio (Debt/Assets) for example or Asset turnover? i see the impact being indirect and hard to really say what exactly increased or decreased.
This is a general question, say for example, the discount rate increases, how would you be able to say assets/liabilities increased/decreased, and how would it impact the leverage ratio (Debt/Assets) for example or Asset turnover? i see the impact being indirect and hard to really say what exactly increased or decreased. as you are looking at a net amountPeter13 wrote:
Parkway wrote:
I didn’t take the test this time, so I can comfortably speak and know I’m not discussing things from the exam.
Given that the net pension liability or asset (with a ceiling) is directly reflected in the BS, I would expect the ratios to be affected, and calc the effect according to whatever’s reflected in the statements.
To the extent that pension assumptions affect the statements, they will affect the ratios.
Of course it will have an impact on some ratios.Peter13 wrote:It would not have any impact on ratios - hence the reason why this is not covered in the curriculum.
For example, how would a higher rate of compensation increase (which means higher PBO and lower Funded Status) impact asset turnover (Revenue/Assets) or Leverage ratios. I see it does not impact either.S2000magician wrote:
Of course it will have an impact on some ratios.Peter13 wrote:It would not have any impact on ratios - hence the reason why this is not covered in the curriculum.