#2 Flashcards
What is the Form 8-K used for?
Form 8-K is used for major corporate events. (Like acquisitions)
When should a company record a liability for purchased asset?
The liability should be recorded when the company has legal title to the company. (Look at FOB)
What is included in land capitalization?
Land costs include the costs of getting the land ready for intended use which includes razing old buildings less salvage plus title insurance and legal fees.
How are revaluation gains/losses recorded on the financial statements for IFRS?
Under IFRS, revaluation gains and losses are calculated as the difference between the FV and carrying value. The gain or loss is recorded in OCI.
How should intangible assets be amortized?
Intangible assets should be amortized over the lesser of the useful economic life or the legal life.
What is included in nonoperating revenue for government?
Interest income, interest expense, G/L on sales of capital assets, grants to or from other govs, operating transfers to or from other funds, and residual equity transfers.
How should an NPO report investments in debt securities on the fianncial statements?
Investments in debt and equity securities should be reported at quoted market prices.
How should acquisition costs be treated when purchasing the net assets of another corporation?
Acquisition costs should be expensed as incurred in the current period.
What are the two primary columns/sections that the gov-wide FS are separated into?
Governmental activities and business-type activities.
What amount is a finance lease capitalized at, and how is it depreciated?
A finance lease is capitalized at the PV of the lease pmts + PV of the purchase option. It is then depreciated over the life of the asset, not the lease term.
Is a reconciliation of fund financial statements and government-wide financial statements included in the gov’s management’s discussion and analysis? (MD&A)
No. This reconciliation is not included in the MD&A.
What does IFRS require a company to do when performing the impairment test of a long-lived asset?
IFRS requires the company to compare the carrying amount of the asset with its recoverable amount. (One-step method)
How is a change in accounting principle presented on comparative financial statements?
The cumulative effect of a change in accounting accounting principle is presented net of tax as an adjustment to beginning retained earnings in the statements of SH equity.
How are unrealized G/L on AFS securities reported?
Unrealized G/L on AFS securities are reported in OCI, net of tax.
How are unrealized G/L on Trading securities reported?
Unrealized G/L on Trading securities are reported in earnings, net of tax.
