Anna Cards Flashcards
How are gain contingencies accounted for?
They are not accrued for (reflected in any account.) They should be disclosed.
How are loss contingencies accounted for?
They should be accrued for the most likely possibility/award, or the lowest amount from the range of possible awards if none are most likely.
What do you compare to see if there should be a gain on debt restructuring?
Compare total future cash payments to the carrying value of debt.
What does the 10-Q contain?
1) Financial Statements
2) Discussion from Management
3) List of material events that have occurred within the company.
What do you do when there is an AFS unrealized holding loss?
Debit OCI
What do you do when you sell the AFS security that you originally had the unrealized holding loss on?
Credit OCI
What is the formula to figure out COGS?
Beginning Inventory \+ Purchases - Purchase Discounts \+ Freight In - Ending Inventory
How do you value stock rights on a balance sheet?
amount you already have * (mkt value of stock rights/(total value of all CS + mkt val of rights))
How do you recognize differences in the application of GAAP and IFRS?
Recognize as an adjustment directly to RE at date of the transition to IFRS
GASB says the MD&A should…
1) focus on the primary governnment
2) be restricted to specifically listed information
3) use condensed financial information for year to year comparisons
* *Dont “boilerplate” language - dont copy/paste same text each year
How is gain computed at the time of death of an insured officer or employee?
Gain is the excess of the face amount of the policy over the cash surrender value at the time (face - csv = gain)
Dividends received under equity method
reduce the carrying amount. do not affect income
Equity in earnings received under equity method
include this amount in income
Buildings included in consolidated FS are reported how?
at fair value
The purpose of modified cash basis is….
to provide more information to users than cash basis accounting while still avoiding the complexities of GAAP.
What is selectivity and what does it relate to?
Selectivity relates to the disclosure of risks. It is the specified criteria that screens risks and uncertainties encountered by each company.
How is the 10-Q filed?
Electronically on EDGAR
Steps in the SEC rule-making process
1) concept release
2) rule proposal
3) rule adoption
4 types of comprehensive basis of accounting other than GAAP
1) government-type provisions
2) income tax
3) cash receipt and cash disbursement basis
4) criteria that meet substantial support like price level basis
What is a special item?
A special item is like an extraordinary item because it is unusual and infrequent, but it is under management’s control.
What is the maximum number of reportable segments
10
What is an asset retirement obligation?
An obligation associated with the retirement of a tangible long lived asset
How much gain does the debtor recognize in troubled debt restructuring?
the excess of the CV of the payable over FV of the asset transferred to the creditor.
What principle is financial accounting based on?
Historical cost principle
Capital lease criteria
1) bargain purchase option
2) title transfer
3) 75% life
4) pv = 90% fv
What does any FV measurement assume?
Assumes the transaction is occurring in the principal market for the asset/liability
What are the 3 acceptable methods to report taxable income?
1) Cash method
2) Accrual method
3) Hybrid method
What’s the purpose of debt covenants?
to protect the interest of the lending institution
When is technological feasibility reached?
Upon completion of detailed program design
Upon completion of a working model
What type of rules does the SEC make?
SEC issues Financial Reporting Standards that usually agree with GAAP.
Where is basic EPS reported?
On the face of the income statement
How do you record the transfer of non-monetary items in a nonreciprocoal transfer (property dividend)?
Record at the FV of asset and a G/L is recorded
What is the journal entry for the payment of life insurance premiums?
Interest expense XX
Cash XX
What is the journal entry for the payment of life insurance premiums as CSV increases?
CSV of life insurance XX
insurance expense XX
Cash XX
What is a cash flow hedge?
Hedge of variable cash flows of recognized assets and liabilities or forecasted transactions that is attributable to a particular risk.
What is a fair value hedge?
Hedge in change of fair value of recognized assets, liabilities, or firm commitments that are attributable to a particular risk.
What is the purpose of the notes to the financial statements?
To provide disclosures required by GAAP.
What is the purpose of Regulation S-X?
Provide guidance for the issuer regarding form and content of financial info submitted to the SEC.
What is a rabbi trust?
It is a grantor trust that allows it to qualify for deferral of employee compensation paid from it. Funds are available to pay creditors incase of employers bankruptcy.
How can you tell if it is diluted?
Market price > exercise price
Calculation for G/L on settlement of Asset Retirement Obligation
(ARO Liability on Settlement Date)-(Actual Settlement Cost)=G/L
