4) Balance Sheet and Disclosures Overview

Question 1

Identify the contents of the Summary of Significant Accounting Policies note to the financial statements.

Answer 1

Summary of Significant Accounting Policies

Identify and describe:

• Measurement bases used in preparing the financial statements
• Principles and methods
• Criteria
• Policies
• Pricing

Question 2

Describe the related party disclosures required under U.S. GAAP and IFRS.

Answer 2

• Material related party transactions
• Related party notes/accounts receivable
• Control relationships

Note: IFRS requires disclosure of key management compensation. U.S. GAAP does not require this disclosure.

Question 3

What are the U.S. GAAP disclosure requirements for risks and uncertainties?

Answer 3

• Nature of operations.
• Use of estimates in preparing the financial statements.
• Significant estimates.
• Current vulnerability due to certain concentrations.