Ch 6 Exercises Flashcards

1
Q

Within the scope section of ASC 815-10 (Derivatives), which guidance comes first - the definition of a derivative, or scope exception to this topic? Explain.

A

Scope exceptions come first.

The definition of a derivative is not presented until much later on in the subtopic.

You do not want to apply the guidance of a derivative if an instrument is not within the scope.

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2
Q

Which entities are subject to Earnings Per Share guidance within the Codification?

A

ASC 260-10-15-2: any entity that has issued common stock or potential common stock that is traded in a public market, both foreign and domestic.

Public companies.

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3
Q

Name three examples of organizations that are within the scope of healthcare entities industry guidance.

A

ASC 954-10-15-1B:
1) Hospitals
2) Clinics
3) Certain rehab facilities
4) Nursing homes that offer some form of healthcare

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4
Q

Within ASC 606-10 (the revised revenue model), where can a researcher find:

The core principle?

A

ASC 606-10-05-03

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5
Q

Within ASC 606-10 (the revised revenue model), where can a researcher find:

The five steps for applying the core principle?

A

ASC 606-10-05-04

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6
Q

Within ASC 606-10 (the revised revenue model), where can a researcher find:

The objective of guidance in this topic?

A

ASC 606-10-10-01

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7
Q

Within ASC 606-10 (the revised revenue model), where can a researcher find:

Guidance on the incremental costs of obtaining a contract with a customer?

A

ASC 606-10-15-5 provides a link to 340-40

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8
Q

Assume that Shumers, Inc. is a private company with a calendar year-end. Shumers must determine when and how it will adopt the revised revenue standard.

In what period must Shumers first apply ASC 606-10?

A

Entities other than public business entities, must apply the standard for annual reporting starting December 15, 2018.

If an entity has interim reporting periods the standard must be applied starting December 15, 2019

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9
Q

Assume that Shumers, Inc. is a private company with a calendar year-end. Shumers must determine when and how it will adopt the revised revenue standard.

How must the standard be initially applied (prospectively, retrospectively)? Explain.

A

Retrospectively, which affects past reporting periods.

Shumer should recognize the cumulative effect as an adjustment to the beginning balance of retained earnings.

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10
Q

Assume that Shumers, Inc. is a private company with a calendar year-end. Shumers must determine when and how it will adopt the revised revenue standard.

Could Shumers early adopt, if it chose to do so?

A

If Shumer chose to do so, it could adopt the standard early, but no earlier than the initial application of ASC 606-10.

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