chapter 2 Flashcards
deferred credits
unearned revenue or deferred revenue is a liability
realization
really happens in the real world
recognition
record
accrual
income statement impact/no current cash impact
deferral
no current income statement impact/ balance sheet impact( cash impact)
expense on income statement
expired costs
Unexpired costs
stay on balance sheet for now1. asset 2. deferred charge
revenue recognition when the right of return exists
recognize at time of sale if all requirement met
initial franchise fees recognize as revenue
when “ substantially performed”
franchisee’s firstday of operations
continuing franchise fees recognized as revenue
when earned
purchase of intangible aseets
record at cost
legal and registration fees incurred to obtain an intangible asset should also be capitalized
internally developed intangible assets
expense, because is R&D
costs associated with intangible assets could be capitalized
- successful defense( unsuccessful is expensed and test asset for impairment)
- registration or consulting fees
- design costs
- other direct costs to secure the asset
Under IFRS R&D
Research expensed, development could capitalized
amortization of intangible assets
must have finite life
and amortize use straight-line
if an intangible asset becomes worthless during the year
expense
If an intangible asset change in useful life
recalulate amortization
if an intangible asset is sold
compare carrying value at the date of sale with selling price to determine the gain or loss
US GAAP finite life intangible assets are reported at
cost less amortization and impairment
IFRS finite life intangible assets are reported at
cost model like GAAP or revaluation model
revaluation model under IFRS of finite life intangible
initial FV, revaluation losses to IS, revaluation gains to OCI. revaluation losses 先抵消revaluation gains. gain 也是先抵消 loss
initial franchise fees for franchisee
is intangible asset and amortize
continuing franchise fees for franchisee
expense as incurred
start up costs
expense
maintaining good will cost like costs associated with maintaining, developing, or restoring goodwill or internally generated goodwill
expense
under gaap R&D are expenses except
materials equipment or facilities that have alternate future uses or R&D costs of any nature undertaken on behalf of others
computer software developed to be sold, leased or licensed
capital costs after technological feasibility 之前都是expense。 amortization expense 从 release product for sale 开始
amortization for computer software developed to be sold, leased or licensed
greater of percentage of revenue or straight line
computer software developed internally or for internal use only
capitalize cost after preliminary project 之前都是expense。should amortize use straight line method
改变主意想买
cost recovery system then revenue
GAAP impairment of intangible assets other than goodwill finite lives
2 steps
GAAP impairment of intangible assets other than goodwill infinite lives
no. 2 step only
reporting an impairment loss
continuing operations and restoration of previously recognized impairment losses is prohibited
IFRS an impairment loss for an intangible asset other than goodwill
step 2 only
recoverable amount under IFRS
greater of the asset FV less costs to sell and the asset’s value in use
Impairment loss for assets held for disposal
FV-Net carrying value+ cost to disposal=total impairment loss and restoration is permitted
good will impairment GAAP
only step 2
test for good will impairment GAAP
reporting unit base
test for good will impairment IFRS
cash-generating unit
Does IFRS has completed contract method?
no it is GAAP only
accounting for installment sales
cash method 把profit分成collected 和还没有collected
installment sales JE
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
nonmonetary exchanges having commercial substance
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
calculation of basis of acquired asset
FV give up+ cash give up
IFRS exchanges of dissmilar
exchange having commercial substance GAAP
exchanges lacking commercial substance
for gains if no boot is received
no gain
boot is paid
no gain
boot is received
recognized proportional gain(
boot is 25% or more
recognized total gains and losses
for losses
always recognized
exchange JE
record asset give up at BV, record asset received at FV
involuntary conversion
gain/loss recognized
items not considred research and development
- routine design to old products or troubleshooting
- marketing research
- quality control testing
- reformulating of a chemical compound
