chapter 2

Question 1

deferred credits

Answer 1

unearned revenue or deferred revenue is a liability

Question 2

realization

Answer 2

really happens in the real world

Question 3

recognition

Answer 3

record

Question 4

accrual

Answer 4

income statement impact/no current cash impact

Question 5

deferral

Answer 5

no current income statement impact/ balance sheet impact( cash impact)

Question 6

expense on income statement

Answer 6

expired costs

Question 7

Unexpired costs

Answer 7

stay on balance sheet for now1. asset 2. deferred charge

Question 8

revenue recognition when the right of return exists

Answer 8

recognize at time of sale if all requirement met

Question 9

initial franchise fees recognize as revenue

Answer 9

when “ substantially performed”

franchisee’s firstday of operations

Question 10

continuing franchise fees recognized as revenue

Answer 10

when earned

Question 11

purchase of intangible aseets

Answer 11

record at cost

legal and registration fees incurred to obtain an intangible asset should also be capitalized

Question 12

internally developed intangible assets

Answer 12

expense, because is R&D

Question 13

costs associated with intangible assets could be capitalized

Answer 13

1. successful defense( unsuccessful is expensed and test asset for impairment)
2. registration or consulting fees
3. design costs
4. other direct costs to secure the asset

Question 14

Under IFRS R&D

Answer 14

Research expensed, development could capitalized

Question 15

amortization of intangible assets

Answer 15

must have finite life

and amortize use straight-line

Question 16

if an intangible asset becomes worthless during the year

Answer 16

expense

Question 17

If an intangible asset change in useful life

Answer 17

recalulate amortization

Question 18

if an intangible asset is sold

Answer 18

compare carrying value at the date of sale with selling price to determine the gain or loss

Question 19

US GAAP finite life intangible assets are reported at

Answer 19

cost less amortization and impairment

Question 20

IFRS finite life intangible assets are reported at

Answer 20

cost model like GAAP or revaluation model

Question 21

revaluation model under IFRS of finite life intangible

Answer 21

initial FV, revaluation losses to IS, revaluation gains to OCI. revaluation losses 先抵消revaluation gains. gain 也是先抵消 loss

Question 22

initial franchise fees for franchisee

Answer 22

is intangible asset and amortize

Question 23

continuing franchise fees for franchisee

Answer 23

expense as incurred

Question 24

start up costs

Answer 24

expense

Question 25

maintaining good will cost like costs associated with maintaining, developing, or restoring goodwill or internally generated goodwill

Answer 25

expense

Question 26

under gaap R&D are expenses except

Answer 26

materials equipment or facilities that have alternate future uses or R&D costs of any nature undertaken on behalf of others

Question 27

computer software developed to be sold, leased or licensed

Answer 27

capital costs after technological feasibility 之前都是expense。 amortization expense 从 release product for sale 开始

Question 28

amortization for computer software developed to be sold, leased or licensed

Answer 28

greater of percentage of revenue or straight line

Question 29

computer software developed internally or for internal use only

Answer 29

capitalize cost after preliminary project 之前都是expense。should amortize use straight line method

Question 30

改变主意想买

Answer 30

cost recovery system then revenue

Question 31

GAAP impairment of intangible assets other than goodwill finite lives

Answer 31

2 steps

Question 32

GAAP impairment of intangible assets other than goodwill infinite lives

Answer 32

no. 2 step only

Question 33

reporting an impairment loss

Answer 33

continuing operations and restoration of previously recognized impairment losses is prohibited

Question 34

IFRS an impairment loss for an intangible asset other than goodwill

Answer 34

step 2 only

Question 35

recoverable amount under IFRS

Answer 35

greater of the asset FV less costs to sell and the asset’s value in use

Question 36

Impairment loss for assets held for disposal

Answer 36

FV-Net carrying value+ cost to disposal=total impairment loss and restoration is permitted

Question 37

good will impairment GAAP

Answer 37

only step 2

Question 38

test for good will impairment GAAP

Answer 38

reporting unit base

Question 39

test for good will impairment IFRS

Answer 39

cash-generating unit

Question 40

Does IFRS has completed contract method?

Answer 40

no it is GAAP only

Question 41

accounting for installment sales

Answer 41

cash method 把profit分成collected 和还没有collected

Question 42

installment sales JE

Answer 42

一开始profit 全部defer 所以cr deferred GP

收到钱以后 realize 收到钱部分的profit 所以 DR deferred GP CR realized gross profit on installments sales

Question 43

nonmonetary exchanges having commercial substance

Answer 43

any change in cash flows
gain/loss recognized use fair value approach. 钱give up ignored
公式 of gain：FV of assets given up-BV given

Question 44

calculation of basis of acquired asset

Answer 44

FV give up+ cash give up

Question 45

IFRS exchanges of dissmilar

Answer 45

exchange having commercial substance GAAP

Question 46

exchanges lacking commercial substance

for gains if no boot is received

Answer 46

no gain

Question 47

boot is paid

Answer 47

no gain

Question 48

boot is received

Answer 48

recognized proportional gain(

Question 49

boot is 25% or more

Answer 49

recognized total gains and losses

Question 50

for losses

Answer 50

always recognized

Question 51

exchange JE

Answer 51

record asset give up at BV, record asset received at FV

Question 52

involuntary conversion

Answer 52

gain/loss recognized

Question 53

items not considred research and development

Answer 53

1. routine design to old products or troubleshooting
2. marketing research
3. quality control testing
4. reformulating of a chemical compound