Basic math and accounting.

Course Description

According to the FASB's recent guidance on fair value measurements, Level 3 hierarchy accepts fair value estimates based on present value of expected future cash flows. Furthermore, CPAs must have a working knowledge of future and present value concepts because of their application to numerous types of business events and transactions. Time value of money is also a critical consideration in financial and investment decisions. For example, compound interest calculations are needed to determine future sums of money resulting from an investment. Discounting is used to evaluate the future cash flow associated with capital budgeting projects. This course aims at presenting the time value tools and techniques that are necessary for fair value measurements and for financial decision making.


Delta Publishing

For many years, Delta Publishing has offered a wide variety of continuing education courses for financial professionals. Topics covered by Delta’s courses include accounting, financial management, budgeting, investments, financial statement reporting, business management, IFRS, ethics, valuations, real estate, and business writing. The diversity and breadth of Delta’s course offerings make the company a prolific and unique contributor to the CPE world. Delta’s well-credentialed authors and contributors have also been published in numerous academic and professional journals and quoted by some of the leading financial media outlets.

Course Specifics

Mar 6, 2018
Basic math and accounting.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

  • Define the concept of time value of money.
  • Calculate the present value of an amount of money.
  • Calculate amounts deposited and received in the future based on a set of information.
  • Identify the concept behind bond yield.
  • Identify which FASB model uses a range of cash flows and probabilities.

Table of Contents

Learning Objectives

Accounting Applications

Fair Value Measurements

The Fair Value Hierarchy

Risk and Restrictions

The Difference between the Principal Market and the Most Advantageous Market

Valuation Approaches

The Three Levels of Fair Value Hierarchy

Financial Applications

Time Value Fundamentals

Calculating Future Values: How Money Grows

Compound Interest

Intra-Year Compounding

The Power of Compounding

Starting Early

Impact of Interest Rate Difference

Future Value of an Annuity

Ordinary Annuity

Annuity Due

Future-Value Difference between Ordinary Annuity and Annuity Due

Can a Computer Help?

What Is Present Value: How Much Money Is Worth Now

Present Value of Mixed Streams of Cash Flows

Present Value of an Annuity

Ordinary Annuity (OA)

Annuity Due (AD)

Present-Value Difference between Ordinary Annuity and Annuity Due

Can a Computer Help?


Deferred Annuities

Future Value of a Deferred Annuity

Present Value of a Deferred Annuity

What Are the Applications of Future Values and Present Values?

Deposits to Accumulate a Future Sum (or Sinking Fund)

Amounts of Periodic Withdrawals

Determining the Number of Periods Required

Can a Computer Help?

Computing Interest Rate

Can a Computer Help?

Amortized Loans

Lease Payments

Can a Computer Help?

How to Develop a Loan Amortization Schedule

Annual Percentage Rate (APR)

Rates of Growth

Bond Valuation

Effective-Interest Method of Amortization of Bond Discount or Premium

Bond Yields and Internal Rate of Return

Can a Computer Help?

Stock Valuation

Single Holding Period

Multiple Holding Period

Discounted Cash Flow (DCF) Techniques

Net Present Value

Internal Rate of Return

Can a Computer Help?

Lease versus Purchase Decision

Buy versus Lease Evaluation Report

Can a Computer Help?

Expected Cash Flow Model

Choosing an Appropriate Discount Rate

How to Compute the Cost of Capital

Cost of Debt

Cost of Common Stock

Cost of Retained Earnings

Computing the Overall Cost of Capital


Review Questions

Review Question Answers and Rationales


Appendix I

Excel Financial and Investment Functions

Appendix II


Final Examination

Answer Sheet

Course Evaluation

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