Asset, Liability, and Net Worth Valuation and Presentation Flashcards
In what order should liabilities be shown in a personal statement of financial condition?
In the order of maturity, with no distinction as to current/non-current classifications.
In what order should liabilities be shown in a personal statement of financial condition?
In the order of maturity, with no distinction as to current/non-current classifications.
How should a significant interest in a separate business be shown in a personal statement of financial condition?
As a single line item at the estimated current fair value of the net assets, separate from other assets.
In what order should assets be shown in a personal statement of financial condition?
In the order of liquidity, with no distinction as to current/non-current classifications.
Describe the basis for measuring assets for a personal statement of financial condition.
Assets in a personal statement of financial condition should be measured at estimated current (fair) value in an arms-length transaction, net of disposal costs, if any.
What income tax-related liabilities should be shown in a personal statement of financial condition?
Income Tax Payable: Known and estimated amounts payable for prior and current periods, less withholding and estimated tax payments made;
Income Tax Provision: Estimated amount which would be due based on the difference between the estimated current value of net assets and their tax basis (computed as excess of current value of net assets over tax basis of net assets, multiplied by the current effective tax rate).
Describe the basis for measuring liabilities for a personal statement of financial condition.
Liabilities in a personal statement of financial condition should be measured at estimated current amounts, which would be based on the lower of:
The amount at which the liability could be settled currently (liquidation value), or
The present value of cash to be paid in future settlement.
How should a significant interest in a separate business be shown in a personal statement of financial condition?
As a single line item at the estimated current fair value of the net assets, separate from other assets.
In what order should assets be shown in a personal statement of financial condition?
In the order of liquidity, with no distinction as to current/non-current classifications.
Describe the basis for measuring assets for a personal statement of financial condition.
Assets in a personal statement of financial condition should be measured at estimated current (fair) value in an arms-length transaction, net of disposal costs, if any.
What income tax-related liabilities should be shown in a personal statement of financial condition?
Income Tax Payable: Known and estimated amounts payable for prior and current periods, less withholding and estimated tax payments made;
Income Tax Provision: Estimated amount which would be due based on the difference between the estimated current value of net assets and their tax basis (computed as excess of current value of net assets over tax basis of net assets, multiplied by the current effective tax rate).
Describe the basis for measuring liabilities for a personal statement of financial condition.
Liabilities in a personal statement of financial condition should be measured at estimated current amounts, which would be based on the lower of:
The amount at which the liability could be settled currently (liquidation value), or
The present value of cash to be paid in future settlement.
