CH 7 Review Flashcards
Accounting Measurement describes
at what value (for how much?) a FS item should be recognized
another word used for accounting measurement
valuation
what is the goal of accounting measurement
record the economic value of an item
what is initial measurement
valuing an item when it it first acquired, constructed, or incurred
what is another name for an initial measurement
Day 1 measurement
what is another name for a subsequent measurement
day 2 measurement
what is a subsequent measurement
valuing an item in periods after it is initially recorded
Where to find rules regarding measurement in the Codification nowadays?
each Codification topic generally sets its own rules for measurement
items measure at ________ and _____________ have constant definition across all Codification topics
fair value; present value
what are measurement attributes
methods that may be used to measure assets and liabilities
what are examples of measurement attributes according to CON 5 (although outdated it is one of the few sources describing them)
- historical cost
- current (replacement) cost
- market value
- net realizable value
- present value
if fair value measurement is required where in Codification to consult? (ASC ______)
ASC 820 (Fair Value Measuremet)
if present value is required where in Codification to consult (ASC ____ -____ sec____)
ASC 820-10 section 55 (implementation Guidance)
intial measurement occurs when an item is first recorded in ____________
the accounting system
generally when a single asset is acquired or liability incurred, in an arm’s length transaction, the item received is record at what price?
transaction price
initial measurement attribute for inventory is ____
cost
when multiple goods or services are delivered in an arrangement, entities must determine 2 things which are as follows:
- whether revenue can be allocated separately to each performance obligation (recognition)
- how the transaction price should be allocated (measurement)
According to ASC 606-10, an arrangement with multiple performance obligations, the transaction price should be allocated based on relative ___________
standalone selling prices
per ASC 606-10, the best evidence of standalone selling price is
the observable price of a good or service when the entity sells that good or service separately
if the best evidence of standalone price is not available these are the other options to look at
- adjusted market assessment approach
- expected cost plus a margin approach
- residual approach
subsequent measurements are necessary for reporting changes in recorded __________________
assets or liabilities
the ______ for subsequent measures can vary depending on the asset or liability being measured
timing
initial measurement attribute for inventory is _____
cost
for subsequent measurements, inventory measured using LIFI is measured at the ________
lower of cost or market
