Deck 3 Flashcards
Change from FIFO to LIFO (type of change and method)
Change in accounting principle but it is a prospective change
“Reporting sufficiency” test for segment reporting
75% of total external sales only
Patents will be amortized and capitalized over the lesser of:
The economic life or legal life
Goodwill is not:
Amortizable but can be capitalized
How is goodwill calculated under IFRS?
The total carrying amount - recoverable amount = impairment loss
Goodwill is only capitalized when:
incurred in the purchase of another entity
When service contracts are sold, the entire proceeds are reported as:
Deferred revenue
Under US GAAP, research and development includes:
Costs incurred prior to technological feasibility for developed software that is to be sold (Can not be for internal use or marketing)
Legal fees and other costs associated with registering a patent are:
Capitalized (R&D is expensed)
Research and development costs do not include:
Routine periodic design changes, marketing research, quality control testing
When there is an unlimited right of return on a sale of goods, what happens?
Most likely nothing will be recorded as sales revenue
Software developed internally is:
Expensed under GAAP
Royalty expense is the larger of:
Minimum royalties or 10% of book sales
Capitalize or expense patents?
Capitalize successful patents; expense unsuccessful patents
Matching principle
Match expenses against revenues
