Concepts CH 4

Question 1

Summary of Significant Accounting Policies

Answer 1

1 Basis of Consolidation
2 Depreciation Methods
3 Amortization of Intanibles
4 Inventory Pricing
5 Recognition of Revenue Contracts
6 Recognition of Revenue Leases

Question 2

Segment Reporting - Op Segment

Answer 2

1 Business component that have Rev & Exp
2 Result Regularly Review by CODM
3 Seperate Fin Info Available

Question 3

Segment Reporting - Quantitative Thresholds

Answer 3

1 Revenue > 10% (include (in and out) of all op seg)
2 Asset > 10% of all segments
3 Profit/(loss) > Absolute amount of profit or loss 10%

Question 4

Going Conern

Answer 4

Disclosure S/B made in notes about doubts and managements mitigation

Question 5

Nature of OPs

Answer 5

1 Major Product/Service
2 Principal Markets
3 Locations of these markets
ALSO
All industries in which there are ops
Relative importance
Basis for determination of importance

Question 6

Concentrations - Disclose IF

Answer 6

Known to exist
Vulnerable to severe impact
Reasonably possible
Include
Volume, Customer, supplier, vendor
Revenue product/service
Available supplies
Geographic Location

Question 7

Subsequent Events

Answer 7

Events that occur after balance sheet date but prior to the issuance of financial statements

Question 8

Subsequent Events - Recognized

Answer 8

Conditions existed at balance sheet date

Question 9

Subsequent Events - Unrecognized

Answer 9

Conditions that did not exist at balance sheet date

Question 10

Sub Events - Unrecognized but require disclose

Answer 10

Sale of bond/capital stock
Business combo
Settlement of claim after balance sheet
Loss of Inv Fire/Disaster
Loss of Receivable

Question 11

Instruments

Answer 11

FV of Financial Instruments (instrument by instrument basis)

Level of FV heirarchy

Question 12

Level of FV Hieracrchy

Answer 12

Level 1 - Unadjusted Market Price Quotes
Level 2 - Observable but exclude quoted prices
Level 3 - Unobservable

Question 13

Credit Risk

Answer 13

An entity must disclose most significant risk arising from instruments.
Credit Risk is the risk of accounting loss from financial instrument because of possible failure to perform by another party

Question 14

IFRS LIFO

Answer 14

Not permitted per IFRS

Question 15

Fair Value of Asset or Liability

Answer 15

The price that would be received when selling an asset or paid when transferring liability in orderly transaction between market particpants

Question 16

Market participants

Answer 16

Are willing and able to engage in transactions involving assets and liabilities

Question 17

Disclosure regarding external customers

Answer 17

If 10% or more of revenue is derived form one external customer 1) that fact 2) the amount form each such customer and 3) the segment reporting revenues must be disclosed

Question 18

Presentation of Financial Asset & Liabilities is required to be disaggregated only by

Answer 18

Form of Financial Asset

Measurement Category

Question 19

Property Taxes - Interim Reporting

Answer 19

Relates to all four Quarters

Question 20

Bonus - Interim Reporting

Answer 20

Relates to services rendered by quarter regardless of whether it is paid

Question 21

Disposal of Componet

Answer 21

Reported in period it occurred

Question 22

Flood Loss

Answer 22

Unusual or Infrequently occurring items must not be prorated over balance of fiscal year

Question 23

Level 1 inputs are

Answer 23

unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Question 24

A transaction is assumed

Answer 24

To occur in the reporting entity’s principal market for assets or liability. In the absence of such a market, it is assumed to occur in the most adventageous market. The FMV is the price without adjustment (cost to sell)

Question 25

Comparison of net amount for most adventageous market

Answer 25

Includes the review of highest amount possible net of cost. However, the FMV is recorded at highest price without cost