24 Flashcards
deck 24
how is the SL amort. of bond prem/disc calculated?
discount or premium / years til maturity or months O/S = amortization to +/- CV
can extinguishment/refund of LTD be part of cont. op’s?
if it is part of the operations of the company
how is the net CV of bond in retirement calculated?
*face - unam. disc - unam. issuance cost = net CV
when is a debtor relieved of its obligation to creditor?
only by:
(1) paying creditor
(2) being released judicially or by creditor
how is G/L on restructuring of payables under GAAP calc’d?
CV liability liquidated
- settlement amt (FV asset/equity)
= gain
*G/L on disposal/exch of asset
= FMV asset - NBV asset exch’d
how is a gain on restructuring calc’d?
CV debt - undisc’d FCF
= gain on restructuring
how do you measure a loan receivable that is impaired but foreclosure is not probable?
- initially, they should measure at PV expected FCF, but can expedite it by:
(1) the loan’s observable market price OR
(2) the FV of the collateral if loan is collateral dependent - if foreclosure is PROBABLE, impairment MUST be measured based on FV of collateral
how is loss on land disposal calc’d?
land PP - FMV land given up = loss on disposal of land
what happens to CS O/S when TS are reissued/resold?
CS O/S increases
under IFRS, what measurements are allowed to est. and report the liability for the cost of settling a lawsuit?
est. only best est. to settle AND discount amt’s of est’d loss to PV
how is a form 10K filed?
it must be filed electronically on EDGAR unless it causes hardship for the filer
how is WO of obsolete inv. treated in COGS?
it is subtracted from inventory to get COGS
when are royalties recog’d as rev?
in the period earned
when should an est. be made for the expected tax rate applicable for the full year in interim FR’ing?
it should be made at the end of each interim period to develop the IT provision
is cost of market research act’s and internal costs for dvp. of computer software R+D costs?
no, they are not
a fin. instrument that has uncond’l obl. that issuer must/may settle by issuing variable # of equity shares must be class’d as an AL if obl. is based solely on: (3)
- a fixed monetary amt known at inception
- variations in something other than FV of issuer’s equity sh’s
- variations inversely related to changes in FV of issuer’s equity shares
what are the JE’s for bonds extinguished at/before maturity?
*at maturity:
Dr: B/P 1M
Cr: cash 1M
*before maturity: (early exti)
Dr: B/P 1M (face, always)
Dr: loss 72.798 (plug)
Cr: discount (unam.) 62.798
Cr: cash (redeemed) 1.01M
Dr: B/P 1M Dr: premium 52.417
Cr: cash 960 Cr: gain on exting. 92.417
**also, NCV - reacq price
= gain/(loss)
what are the add’l exp’s that a company has to accrue for payroll exp’s?
%401k match + employer share of FICA+medicare
what is int. exp. under SL and effective int. method amortization for bonds?
I/P + amort. of disc - amort. of premium = int exp
is the overall amort. of bonds the same for SL and effective int. methods?
yes, they will overall be the same over the life of the bond
