5/15/2019 Week 2 FAR

Question 1

What are required disclosure under IFRS but not under US GAAP?

Answer 1

IFRS includes statement of compliance with IFRS but U.S. GAAP does not need statement of compliance with U.S. GAAP. IFRS requires disclosure of judgement made (whether a financial asset is categorized as “held to maturity” or “AFS”), but U.S. GAAP does not.

Both IFRS and U.S. GAAP require disclosure of all significant accounting policy, and estimate made in preparation of F/S.

Question 2

What is reportable operating segment?

Answer 2

A reportable operating segment is at least one of following:

1) having 10% of all revenue, including revenue from unaffiliated sales and intersegment sales, or
2) at least 10% of operating income
- 10% or more of the greater, in absolute amount, of
- the combined reported profits of all operating segments that did not report a loss;
- the combined reported loss of all operating segments that did not reports a profit

or,

3)at lease 10% of identical assets

Question 3

What type of entity is required to report on business segments?

Answer 3

Only public-traded enterprises are required to report on business segments.

Question 4

Answer 4

Question 5

What does audited f/s need to include? (period presented)

Answer 5

• 2 most recent years’ b/s
• 3 fiscal years preceding the most recent audited balance sheet for: i/s, stmt of cash flow and changes in owner’s equity

Question 6

When does Form 10K needs to be filed?

Answer 6

Form 10K needs to be filed in 60 days after end of fiscal year for large accelerated filers (mkt value of common equity value >= $700 million)

Form 10K needs to be filed in 75 days after end of fiscal year for acceserated filers (mkt value of common equity value in $75 million - $700 million)

Form 10K filed in 90 days after end of fiscal year for other registrants.

Question 7

When does Form 10Q’s filing deadline?

Answer 7

10Q needs to be filed 40 days after fiscal year for both large accelerated filers and accelerated filers.

10Q needs to be filed 45 days after f/y for other registrans.

Question 8

What is Form 3,4,5?

Answer 8

Forms 3,4,&5 are required to filed by directors, officers or beneficial owners of more than 10% of a class of equity securities of a registered company.

These would NOT contain f/s. They contains info about the ownership of the entity’s securities.

Question 9

What forms are NOT required to include audited f/s?

Answer 9

Form 6K is filed semiannually by foreign private issuers and contains unaudited f/s.

Form 10Q is filed quarterly by U.S. registered companies, and contains unaudited f/s.

Question 10

A/R turnover ratio?

Answer 10

A/R turnover ratio = net sales/ ave A/R;

ave A/R = [(Bgn A/R - allowance,doubtful account) + (ending A/R - allowance, doubtful account)] /2

Question 11

current ratio?

Answer 11

current ratio = current asset/ current liability

Question 12

quick ratio?

Answer 12

quick ratio = (cash&cash equivalent + Receivable(net) +short term marketable securities) / current liabilities

Question 13

working capital?

working capital turn over?

Answer 13

working capital = current asset - current liability;

working capital turnover = sales/ ave working captical

Question 14

days in inventory?

Answer 14

days in inventory = ending inventory/ (cost of goods sold/ 365)

Question 15

net profit margin?

Answer 15

net profit margin = net income/ net sales

Question 16

return on asset?

Answer 16

return on asset = net income/ total ave assets

Question 17

Dupont Return on Asset?

Answer 17

Dupont Return on Asset = profit margin * ROA

= (net income/ net sales) * (net sales/ total ave asset)

= net income/ total ace asset

Question 18

Return on equity?

Answer 18

Return on equity = net income/ total ave equity

Question 19

total debt ratio?

Answer 19

total debt ratio = total liabilities/ total asset

Question 20

Times interest earned?

Answer 20

Times interest earned = income before (subtract) interest expense and tax expense / interest expense

Question 21

operatin cash flow?

Answer 21

operating cash flow = operating cash flow/ current liabilities