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BECKER NOTES > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

IDEA

A

I - Income from Continuing Operations
D - Income from Discontinued Operations
E - Extraordinary Items
A - Accounting Principle Changes

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2
Q

Treated like change in estimate (PROSPECTIVELY)

A

To LIFO
Change in Depreciation Methods
Change from Installment Method to Immediate Recognition

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3
Q

Comprehensive Income

A

Changes in Equity other than transactions with owners (Net Income + OCI)

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4
Q

OCI

A 
P - Pension Adjustment
U - Unrealized G/L on AFS
F - Foreign Currency Translation Adj 
E - Effective Portion of Cash Flow Hedge
R - Revaluation Surplus (IFRS)
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5
Q

Segment Reporting Test

A

10% of combined revenues (ext and int)
10% of GREATER of profit or loss (ext or int)
10% of combined assets of operation segments
75% of consolidated revenues (ext)

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6
Q

Disclosure Segment Reporting

A 
US - assets and profits(losses)
IFRS - assets, liabilities, and profits(losses)
*  No cash flow
Operating Segments
Products and Services
Geographic Areas
Major Customers
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7
Q

First time Adoption of IFRS

A

3 BS and 2 (IS, CI, CF, E and notes)

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8
Q

SEC Reporting

A 
10K - annual 60-75-90 AUDITED
10Q - quarterly 40-45  UNAUDITED
11K -  annual benefit
8K - major corporate events
3,4,5 - directors, owners 
NON-US
20F (other countries) and 40F (Canada)
6K - semi-annual Foreign UNAUDITED
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9
Q

Fundamental Qualitative Characteristics

A

Relevance and Representational Faithfulness

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10
Q

Relevance (Passing Confirms Money)

A

Predictive Value
Confirming
Materiality

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11
Q

Representation Faithfulness (Completely Neutral is Free from Error)

A

Completeness
Neutral
Freedom from Error

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12
Q

Enhancing Qualitative Characteristics

Compare and Verify to Understand in Time

A

Comparability
Verifiability
Understandability
Timeliness

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13
Q

Full Set of Financial Statements

A 
Balance Sheet
Income Statement
Statement of Comprehensive Income
Statement of Changes in Owners' Equity
Statement of Cash Flow
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14
Q

Fundamental Assumptions - US GAAP

A 
Entity
Going Concern
Monetary Unit
Periodicity
Historical Cost
Revenue Recognition
Matching Principle
Accrual
Full Disclosure
Conservatism
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15
Q

Fundamental Assumptions - US GAAP

A

Going Concern and Accrual

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16
Q

Realization and Recognition

A

Realization: Sold and converted to cash or receivable
Recognition: Recorded in FS

17
Q

10 Elements of FS - US GAAP

CREGL ALE needs ID

A 
Comprehensive Income
Revenues
Expenses
Gains 
Losses
Assets 
Liabilities
Equity
Investment
Distributions
18
Q

6 Elements of FS - IFRS

ALEIEC

A 
Assets
Liabilities
Equity
Income
Expenses
Capital Maintenance
19
Q

5 Elements of PV

UVOTE

A

Price for bearing Uncertainty
Expectations of timing Variations of future CF
Other factors (liquidity and market imperfections)
Time value of money (risk free interest)
Estimate of future cash flow

20
Q

Discontinued Operations

A

G/L on Operations
G/L on Sale
Impairment Loss (BV less FV-cost to sell)
- Subsequent increase in FV (gain up to cumulative losses)

21
Q

Component in Discontinued Operations

A 
US GAAP
1. Operating segment
2.  Reportable Segment
3.  Reporting Unit
4.  Subsidiary
5.  Asset Group
IFRS
1.  Separate Major Line of Business or Geographical area of operations
2.  Subsidiary acquired exclusively for resale
22
Q

Exit and Disposal Activities

A

Involuntary employee termination benefits

Costs to terminate operating lease

23
Q

Extraordinary Items

A

Abandonment/damage of plant due to infrequent earthquake or flood
Prohibition of product line due to new law
Expropriation of plant

24
Q

First Note to FS

A

Summary of Significant Acctg Principles

  • Measurement bases
  • Principles and Methods
  • Criteria
  • Policies
  • Pricing
25
Q

Related Party Disclosures

A

Material related party transactions
Related party notes/accounts receivables
Control relationships
IFRS: plus key mgmt compensation

26
Q

Risks and Uncertainties

A

Nature of operations
Significant estimates
Use of estimates in preparing FS
Current vulnerability to certain concentrations

27
Q

Interim Reporting

A

Includes condensed Comprehensive Income

BECKER NOTES (7 decks)

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