1D, Company Reporting Topics Flashcards
1
Q
For Developmental Stage Enterprises - What costs are Capitalized?
- ?????
- Equipment
- Furniture
- Security Deposits
A
Leasehold Improvements
2
Q
For Developmental Stage Enterprises - What costs are Capitalized?
- Leasehold Improvements
- ?????
- Furniture
- Security Deposits
A
Equipment
3
Q
For Developmental Stage Enterprises - What costs are Capitalized?
- Leasehold Improvements
- Equipment
- ?????
- Security Deposits
A
Furniture
4
Q
For Developmental Stage Enterprises - What costs are Capitalized?
- Leasehold Improvements
- Equipment
- Furniture
- ?????
A
Security Deposits
5
Q
For Developmental Stage Enterprises - What costs are Capitalized?
A
- Leasehold Improvements
- Equipment
- Furniture
- Security Deposits
6
Q
For Developmental Stage Enterprises - What costs are expensed?
- ?????
- Laboratory Operations
- General and administrative expenses
- Depreciation
A
Research and Development
7
Q
For Developmental Stage Enterprises - What costs are expensed?
- Research and Development
- ???????
- General and administrative expenses
- Depreciation
A
Laboratory Operations
8
Q
For Developmental Stage Enterprises - What costs are expensed?
- Research and Development
- Laboratory Operations
- ???????
- Depreciation
A
General and administrative expenses
9
Q
For Developmental Stage Enterprises - What costs are expensed?
- Research and Development
- Laboratory Operations
- General and administrative expenses
- ???????
A
Depreciation
10
Q
For Developmental Stage Enterprises - Are leasehold improvements - Capitalized or Expensed?
A
Capitalized
11
Q
For Developmental Stage Enterprises - Is Equipment - Capitalized or expensed?
A
Capitalized
12
Q
For Developmental Stage Enterprises - Is furniture - Capitalized or expensed?
A
Capitalized
13
Q
For Developmental Stage Enterprises - is Research and Development - Capitalized or Expensed
A
Expensed
14
Q
For Developmental Stage Enterprises - are laboratory Operations - Capitalized or expensed
A
Expensed
15
Q
For Developmental Stage Enterprises - Are General and Administrative expenses - Capitalized or expensed?
A
Expensed
16
Q
For Developmental Stage Enterprises - is Depreciation - Capitalized or expensed?
A
Expensed
17
Q
What information does Form 8K provide?
A
Reports current events so that investors can obtain important info about material events in a timely manner
18
Q
What’s included in the Form 8k
- ?????
- Notification about entering into material agreements (ex mergers)
- Entering into Debt or other Financial obligations
4 Creation of an obligation under an off balance sheet arrangement of a registrant
- The unregistered sale of equity securities
- A change in a registrant’s certifying accountant
A
Quarterly Earnings releases
19
Q
What’s included in the Form 8k
- Quarterly Earnings releases
- ?????
- Entering into Debt or other Financial obligations
4 Creation of an obligation under an off balance sheet arrangement of a registrant
- The unregistered sale of equity securities
- A change in a registrant’s certifying accountant
A
Notification about entering into material agreements (ex mergers)
20
Q
What’s included in the Form 8k
- Quarterly Earnings releases
- Notification about entering into material agreements (ex mergers)
- ????????
4 Creation of an obligation under an off balance sheet arrangement of a registrant
- The unregistered sale of equity securities
- A change in a registrant’s certifying accountant
A
Entering into Debt or other Financial obligations
21
Q
What’s included in the Form 8k
- Quarterly Earnings releases
- Notification about entering into material agreements (ex mergers)
- Entering into Debt or other Financial obligations
4 ?????
- The unregistered sale of equity securities
- A change in a registrant’s certifying accountant
A
Creation of an obligation under an off balance sheet arrangement of a registrant
22
Q
What’s included in the Form 8k
- Quarterly Earnings releases
- Notification about entering into material agreements (ex mergers)
- Entering into Debt or other Financial obligations
4 Creation of an obligation under an off balance sheet arrangement of a registrant
- ?????
- A change in a registrant’s certifying accountant
A
The unregistered sale of equity securities
23
Q
What’s included in the Form 8k
- Quarterly Earnings releases
- Notification about entering into material agreements (ex mergers)
- Entering into Debt or other Financial obligations
4 Creation of an obligation under an off balance sheet arrangement of a registrant
- The unregistered sale of equity securities
- ?????
A
A change in a registrant’s certifying accountant
24
Q
What’s included in the Form 8k
A
- Quarterly Earnings releases
- Notification about entering into material agreements (ex mergers)
- Entering into Debt or other Financial obligations
4 Creation of an obligation under an off balance sheet arrangement of a registrant
- The unregistered sale of equity securities
- A change in a registrant’s certifying accountant
25
Are Quarterly results of Operations required to be in form 8k?
No, its for announcement of quarterly releases
26
Is the financial condition of required to be reported in form 8k?
no
27
What is the Form 10Q
Report of a public company performance that must be filed quarterly with SEC.
It includes unaudited F/S and provides a continuing view of the company financial position during the year
28
Is the Form 10Q audited?
No
29
Public Equity Float
Amount of equity available in a company for investors to invest in
30
Small Reporting Company is defined by SEC as a company with less than how much in public equity float?
$75 million
31
Which companies are required to disclose EPS
Companies whose shares and potential shares are publicly traded
32
How to calculate EPS
(Net income - Preferred Stock Dividends)/ WACS
33
How are shares of preferred stock treated when calculating WACS
They are not included
34
When calculating Basic EPS - The numerator is - Net income - P Stock Divs - Are those dividends subtracted at the full amount or net of tax
Full amount
35
How are shares repurchased treated when Calculating WACS?
They are subtracted using pro rate amount #months/12
Ex: 3/31 20k shares are repurchased, 700k shares outstanding on 1/1
9/15 x 20k = 15k
700k - 15l = 685
*Check this to confirm
36
When you're comparing the WACS from yr 1 & yr 2 - and there's a stock split in yr 2 - How does that affect the comparisons?
Do stock split in yr 1 also to compare year 2 WACS
Ex: 100k shares yr 1
Yr 2 2k shares were issued then 2 for 1 stock split - now you have 250k shares
You would (split 100k shares to compare)
200k vs 250k
not 100k vs 250k
37
You're comparing the WACS for year 1 & 2
Yr 1: 100k shares
yr 2: added 25k shares then stock split 2 for 1 (so 250k shares in total)
How do you compare the 2 numbers
Split yr 1 as well to compare
200k vs 250k
NOT
100k vs 250k
38
When seeing if a segment is reportable - You see if that one segment is 10% of combined...
What 3 options
1. ?????
2. Profit/loss
3. Revenue
Assets
39
When seeing if a segment is reportable - You see if that one segment is 10% of combined...
What 3 options
1. assets
2. ?????
3. Revenue
Profit/loss
40
When seeing if a segment is reportable - You see if that one segment is 10% of combined...
What 3 options
1. assets
2. Profit/loss
3. ?????
Revenue
41
When seeing if a segment is reportable - You see if that one segment is 10% of combined...
What 3 options
1. assets
2. Profit loss
3. Revenue
42
If 10% or more of enterprise revenue comes from one customers - The segment making those sales must ____
be disclosed
43
What are Cumulative Preferred Stocks
A type of preferred stock with the stipulations that if any dividends payments are missed, in the past - The divs owed must be paid to the shareholders first
44
Preferred stock typically has a ___ dividend yield on the ____ value of stock
1. Fixed
| 2. Par
45
Preferred stocks are valued similarly to ____
Bonds
46
P Stocks are valued similarly to Bonds - BUT - Bond proceeds are considered a liability - P Stock Proceeds are considered ______
an asset
47
What are dividends in Arrears
When a company fails its dividends to preferred shareholders (who are guaranteed payments) the total amount owed to the investor is recorded on its balance sheet as dividends in arrears
48
When a company fails its dividends to preferred shareholders (who are guaranteed payments) the total amount owed to the investor is recorded on its balance sheet as ______
Dividends in Arrears
49
In which financial statement are dividends in arrears recorded?
Balance Sheet
50
For the Profit (loss) test for reportable segments - You're looking at the combined 10% of what
Either 10% of the greater (in absolute amount) od combined reported profit of segments that did not report a loss
or did not report a profit
51
What is an SEC Registration Statement?
Set of documents a company must file with SEC before it proceeds with a public offering
52
Who's responsibility is it to ensure full and fair disclosure in an SEC registration statment
The Issuer's responsibility
53
What if -When filing an SEC registration statement - All material facts are not adequately disclosed by the Issuer?
Must be corrected or expanded by means of an amendment
54
What happens -When filing an SEC registration Statement - and amendment is made to statement by the issuer - but it still doesn't resolve the deficiencies?
SEC may exercise a "Stop order" or "refusal order" to prevent registration statement from becoming effective and prevent securities from being sold until corrected
55
When filing an SEC registration Statement - and amendment is made to statement by the issuer - but it still doesn't resolve the deficiencies?
SEC may exercise a _____ or _____
Stop order
Refusal order
56
When is a security Dilutive
When the inclusion of the security results in a smaller EPS
or increases loss per share
57
in Calculating Diluted EPS - For convertible bonds - you use the ____ Method
If Converted
58
When using the If converted method - what type of securities are involved
Convertible Bonds
59
When doing the if converted method - for dilated EPS - How is the numerator treated?
Interest from convertible bonds are added back to the numerator
60
When you're adding back Interest to numerator - in dilutive EPS - What amount of interest expense do you use
Interest expense net of income taxes
61
When doing the if converted method -for dilutive EPS - How is the denominator of EPS equation treated
Add the new amount of stock from bonds being converted to stock
62
When Calculating Dilutive EPS -Using the TREASURY STOCK METHOD - What is done to the numerator
Nothing different
Still Net income - Preferred Dividends
63
When Calculating Dilutive EPS -Using the TREASURY STOCK METHOD - What is done to the Denominator
WACS is added by Shortfall of proceeds from stock vs amount needed to buy shares for options
64
What does the Shortfall mean - in the context of Calculating Dilutive EPS - Using the Treasury Stock Method
The amount of shares you are short on for buying back stock to provide to people exercising their option
65
How do you find the Shortfall for the Treasury stock method - When calculating dilutive EPS
Difference The amount of shares your can buy back at market price - with the proceeds from exercising option - vs the amount of shares from the conversion of the bonds
66
Formula for Dilutive EPS - Treasury stock method
Net income - preferred Divs / Shares outstanding + Shortfall
67
Basic EPS $1.29
You have a 7% Convertible Bond -issued at par - each $1000 bonds convertible into 40 shares of common stock - Tax Rate is 30% How do you go about figuring out if it's Dilutive EPS
for numerator - after tax interest = 49
For denominator - #shares added for each $1000 = 40 shares
49/40 = 1.225
That's lower than basic EPS of 1.29
68
Basic EPS $1.29
You have a 7% Convertible Bond -issued at par - each $1000 bonds convertible into 40 shares of common stock - Tax Rate is 30% How do you go about figuring out if it's Dilutive EPS - Just Numerator part?
After tax interest
1000 x 7% x (1-.3) = 49
69
Basic EPS $1.29
You have a 7% Convertible Bond -issued at par - each $1000 bonds convertible into 40 shares of common stock - Tax Rate is 30% How do you go about figuring out if it's Dilutive EPS - Just Denominator part?
40
However many shares each $1,000 bond converts to
70
What makes something anti dilutive?
If the act of it will result in an increase of EPS
71
What makes a convertible bond anti dilutive
If its conversion results in increase of EPS
72
If a convertible bond is anti dilutive - Why is it not included in EPS?
Because it is assumed that the owner wouldn't convert the bonds because they would be worse off in doing so.
73
3 Categories of Companies Required to file documents documents with SEC
1. ?????
2. Companies with assets of over $10 million and at least 500 shareholders
3. Companies that have sold securities to the public pursuant to a registration, such as an initial public offering
Companies whose stocks are traded on a national stock exchange
74
3 Categories of Companies Required to file documents documents with SEC
1. Companies whose stocks are traded on a national stock exchange
2. ???
3. Companies that have sold securities to the public pursuant to a registration, such as an initial public offering
Companies with assets of over $10 million and at least 500 shareholders
75
3 Categories of Companies Required to file documents documents with SEC
1. Companies whose stocks are traded on a national stock exchange
2. Companies with assets of over $10 million and at least 500 shareholders
3. ????
Companies that have sold securities to the public pursuant to a registration, such as an initial public offering
76
3 Categories of Companies Required to file documents documents with SEC
1. Companies whose stocks are traded on a national stock exchange
2. Companies with assets of over $10 million and at least 500 shareholders
3. Companies that have sold securities to the public pursuant to a registration, such as an initial public offering
77
What makes a Company an Accelerated Filer?
A company that has a public float of $75 million but less than $700 million
78
What make a company a large accelerated filer?
A company that has a public float of over $700 million
79
How many days after the end of the quarter - do accelerated filers have - to file form 10Q?
40 days
80
How many days after the end of the quarter - do large accelerated filers have - to file form 10Q?
40 days
81
Where should Deficits accumulated - during the developmental stage of a company - be reported ?
Reported as part of stockholders' equity
82
If Converted Method for Dilutive EPS - It assumes conversion of convertible securities - as of the ...
Beginning of the earliest period reported
or
at time of issuance (whichever is later)
83
When doing the If converted method for Diluted EPS - How do you find Annual interest paid on bonds?
___ Value x ___ Interest rate
Face
Stated
84
When doing the If converted method for Diluted EPS - What do you do with amortization of discount on bonds?
Add amortization of discount to the Face value x Stated interest rate
85
For Non Accelerated Filers - Within how many days after the end of the company's fiscal year - do they need to file form 10K
90 days
86
For Accelerated Filers - Within how many days after the end of the company's fiscal year - do they need to file form 10K
75 Days
87
For Large Accelerated Filers - Within how many days after the end of the company's fiscal year - do they need to file form 10K
60 days
88
how are inventory losses recognized interim financial statements
Recognized in period in which decline occurs
89
How is the recovery of inventory losses (inventory losing value) -that was recorded in interim F/S - recorded in subsequent interim periods
Recorded as gains, to the extent of losses recognized in previous interim periods of same fiscal year
90
Regulation S-X
Principle accounting regulation of the SEC, governing the annual report
All F/S presents in annual reports must conform to S=X Accounting & disclosure rules
91
Regulation S-T
Cornerstone for EDGAR rules, prescribing requirements for electronic filing and the procedures for making such filings
92
The ____ is among the first to identify emerging financial accounting and reporting issues
SEC
93
True or False
The SEC may refer emerging financial accounting and reporting issues to the FASB
True
94
True or False
Publicly traded entities frequently clear accounting treatment with SEC Staff in advance of all transactions or events being recorded in the Financial statements
True
95
The _______ of the SEC attends the FASB's EITF meetings and takes the position that since an EITF consensus sets the tone for future accounting
Chief Accountant
96
The chief accountant of the SEC attends the FASB's ___ meetings and takes the position that since an ___ consensus sets the tone for future accounting
EITF
EITF
97
True or False
The SEC does not have broad statutory powers to make, amend, and rescind any rules and regulations that may be necessary to carry out the provisions of law
False,
they do
98
What is the Basic Information Package (BIP)?
Financial disclosures for SEC filings
99
The Basic Information Package consists of....
____ year comparative selected financial data
5
100
True or false
The BIP consists of ...
Managements discussion and analysis of the financial condition and results of operations
True
101
The BIP consists of ...
Data explaining the circumstances applicable to change in the registrant’s ____ during the prior ____ years
Independent Accountant
2
102
If Market Price of Inventory Declines - How is it treated in interim financial statements
It is not written down as a decline
103
If at first a decline in market price of inventory is expected to recovered by the end of the year - but later discovered that it won't be recovered - How is that treated in interim F/S
If it is determined afterwards that it will not recover - it should be recognized in earliest interim period it is determined
104
For Interim F/S how are COGS estimated
Use gross profit rates
*only for interim, not permitted in annual year end reporting
105
Can you use gross profit rates - in annual year end reports - to estimate COGS
No
106
An enterprise is required to report a measure of segment _____ and segment ____ and certain related items
Profit/loss
Assets
107
Are enterprises required to report segment cash flows?
No
108
Are segment required to report segment liabilities
No
109
Which Act requires filing of periodic reports with SEC?
Securities Exchange Act of 1934
