I have always been good at Math. My grandma, who is one of my favorite people, used to be a math teacher and I spent a lot of time with her growing up, so maybe her love for math rubbed off somehow. I’ve taken Math courses at different levels – Further Math, Discreet Math, GMAT Math (wiun!)—none of them posed an insurmountable challenge. I expected the same experience with the Corporate Financial Accounting (CFA) course, but so far, we have been bombarded with a lot of Accounting concepts, procedures, and plenty English! It’s not even just the plenty of English that gets me; it’s how some accounting concepts mean the opposite thing from what it would in real English language. How does an unqualified audit report imply that the financial statements of a company are fair and transparent based on thorough research, but a qualified audit report does not? Make it make sense!
Despite these hurdles, three weeks into the CFA program, and I find myself enjoying the experience. Much of the credit goes to the exceptional Accounting faculty at LBS. I’ve had the privilege of learning from two outstanding instructors who have skillfully guided us through the foundation of CFA. Mr. Akintola delved deep into components of Financial Statements and we reviewed the annual reports of Guinness Nigeria Plc. He explained how Resources are Assets, and are usually obtained through Debt or Equity. The Assets, Equity and Debts of a company give insight into the financial position of the company. This is represented as one of the components of Financial statements called ‘Statement of Financial Position (SOFP) or Balance Sheet. He also emphasized the Entity Concepts; which demands that a business is a treated as a separate entity from its owners, and explained Cost Accounting at length.
Mr. Francis kicked off his class by discussing internal business dynamics, exploring Organizational Beacons—being a company’s mission, vision, and core values. We compared these with the Owners requirement, which defines a company’s reason for being in business. Our discussions then shifted to how companies formulate short- and long-term goals and organize resources to achieve them. These foundational concepts, I believe, encapsulate the essence of what CFA aims to achieve—funding, capital structuring, and investment. He also introduced us to accounting reporting standards and governing bodies. To some of us it sounded like Russian Language, but to the gurus aka ‘Consultants’ it was like music to their ears, and they hummed along.
I have been able to reconcile a lot of real-life experiences that I didn’t quite understand in the moment during some of these classes. A most recent example is the Accrual Concept and Matching Principles which summarizes that revenue can be recorded only when it has been executed as contractually agreed, regardless of when the revenue was received. It immediately took me back to my time as the Commercial Operations Specialist at General Electric, when we could not recognize the revenue for jobs that were not concluded in the prevailing quarter, thereby impacting our projected numbers. It has been nice relating these concepts to real life situations, but I’m looking forward to the mathematical aspects of this course. There have been threats and rumors that it is about to get tougher and I’m hoping my anticipation is not replaced with horror. Whatever the case, bring on the Math!
