19 Flashcards
deck 19
when is NCI recorded in I/C transaction of bonds?
NCI is only adjusted if bonds were originally issued by SUB. if parent issues, no affect on NCI
*JE for bond elimination with premium:
bond premium (P) 75
B/P (P) 1M
bond invest (S) 975
(gain) RE - consol’d 100
how do we calculate consol’d inv?
inv acq’d from outside parties + inv acq’d I/C - unreaized GP (GP%*I/C inv acq’d) = inv consol’d
- GP% = (total inv - I/C inv) /total inv
- GR: P + S + FV adj = consol inv
how do you calculate I/C profit that must be elim’d from EI?
SP - COGS = I/C profit *GP% = EI elim’d
how do you calculate consol’d liabilities?
P+S - I/C liabilities = consol’d L
how do you calculate share of earnings from sub in a consolidation?
BB + “x” - div paid = EB
*“x” is then multiplied by %own = P’s earnings from sub
what is the rule for SE in a consolidation?
SE = P’s + FV NCI
*FV NCI = BB+NI-div = EB
**BB = FV sub * NCI%
***FV sub = acq cost/%own
what is NI in a consol?
NI = P - NCI NI
*P already includes S’s income from adding equity earnings after OI
in a consolidation, what is the rule for a newly acq’d sub midyear?
NI will only be included from the date of acquisition, therefore only (for ex) equity % til June 30 and 95% thereafter
what happens to the sub’s equity accounts when using the acq. method?
100% are eliminated from the sub in consol.
how do you calculate consol. FA?
BV P + FV sub
how do we record IL under IFRS?
CV - recoverable amount
*recov. amt is greater of PV FCF (or value in use) or NRV
how is GW IL reported under GAAP?
2 steps:
- FV RU < CV RU = poss. IL
**assign FV RU - CV RU = GW implied FV
***GW implied FV - GW BV = GW IL
is asset impairment or GW impairment listed first?
other impairments should be eval’d first, then GW
what are monetary assets?
they are cash/CE whose amounts are fixed in terms of $ (ex = demand deposits, receivables)
*NOT patents/trademarks
how are disclosures of changing prices reported on the FS’s?
they are encouraged, but not req’d. therefore, they should be reported in the suppl. info to FS’s
how are LT customer-relationship IA’s treated in regards to impairment?
they are subject to the same IL recognition as other LT IA’s that are held and USED
in regards to financial reporting, property dividends in excess of merch’s CV over market value is:
reported as a reduction in income
what are the JE’s to mark-to-market for equity sec’s?
*for unrealized gains:
DR: valuation account
Cr: unrealized gain
*for unrealized losses:
Dr: unrealized loss
Cr: valuation account
what are the JE’s for the sale of equity sec’s?
Dr:cash
Dr: valuation account (elim.)
Cr: realized gain (diff. b/w FV)
Cr: equity sec’s (plug)
what are the JE’s for HTM purch and IL?
purch:
*Dr: HTM sec.
Cr: cash
IL:
*Dr: IL
Cr: HTM sec.
