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CPA- FAR > F1 > Flashcards

F1 Flashcards

1
Q

What is the order of standard setting bodies that determined GAAP?

A

1939- CAP, 1959- APB, 1973- FASB

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2
Q

What is the FASB’s Accounting Standards Codification (ASC)?

A

effective July 1, 2009. single source of authoritative nongovernmental US GAAP

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3
Q

What authoritative literature is included in the ASC?

A

FED PRIA. FASB, EITF, Derivative Implementation Group Issues, APB, ARB, Accounting Interpretations, AICPA

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4
Q

What is the purpose of the IASB (International Accounting Standards Board)?

A

to develop a single-set of high-quality, global accounting standards

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5
Q

What does the IFRIC (International Financial Reporting Interpretations Committee) do?

A

provides guidance on newly identified financial reporting issues not addressed in IFRS, and assists IASB in achieving convergence of international accounting standards

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6
Q

What is included in IFRS (international Financial Reporting Standards)?

A

IFRS, IASs, & interpretations developed by IFRIC and former SIC

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7
Q

IASB & FASB have been working towards convergence of GAAP and IFRS since when?

A

2002

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8
Q

What are the SFAC?

A

The Statements of Financial Accounting Concepts are the basic reasoning behind FASB pronouncements

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9
Q

What is SFAC No.8 Chapter 1?

A

defines primary users (existing & potential investors, lenders, and other creditors) & financial reports (must meet the users informational needs)

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10
Q

What is SFAC No.8 Chapter 3?

A

defines the fundamental qualitative characteristics of useful financial information

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11
Q

What are the Fundamental Qualitative Characteristics?

A

It is RELEVANT that your bf is FAITHFUL while you are studying…. Relevant & Faithful Representation

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12
Q

In order to be relevant, info must have?

A

PASSING COMFIRMS MONEY. Predictive Value, Confirming Value, Materiality

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13
Q

In order to meet Faithful Representation, info must be?

A

COMPLETELY NEUTRAL IS FREE FROM ERROR. Completeness, Neutrality, Freedom from error

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14
Q

What are the Enhancing Qualitative Characteristics?

A

COMPARE & VERIFY IN TIME TO UNDERSTAND. Comparability, Verifiability, Timeliness, Understandability

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15
Q

What is SFAC No. 5?

A

includes a full set of F/S, measurement attributes for A & L, and Fundamental assumptions

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16
Q

What are the ways to measure A & L?

A

historical cost, current cost, NRV, market value, PVFCF

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17
Q

What are the fundamental assumptions of GAAP?

A

entity, going concern, monetary unit, periodicity, historical cost principle, revenue recognition principle, matching principle, accrual accounting, full disclosure principle, conservationism principle

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18
Q

What are the fundamental assumptions of IFRS?

A

accrual basis & going concern

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19
Q

What is SFAC No. 6?

A

The elements of the financial statements

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20
Q

What are the elements of the financial statements

A

REGL ALE needs ID. IS (REGL), BS (ALE), Inv & Dist to owners

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21
Q

What is SFAC No. 7?

A

The framework for using FCF as a measurement basis for A&L

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22
Q

What are the 5 elements of PV measurements?

A

Estimate FCF. Timing variations of FCF, TVM, Credit risk, etc.

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23
Q

What are the 2 different approaches to calculating PV?

A

Traditional (scheduled known payments) or Expected (uncertain future payments)

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24
Q

What is the presentation order for IS and RE?

A

IDEA. Income from Continuing Operations (gross & net), Income from Discontinued Operations, Extraordinary Items, Change in Acc Principle (RE only)

25
Q

What is the multiple step income statement?

A

REV & Exp from operating + rev & exp from non-operating – taxes = net income

26
Q

What is the single step income statement?

A

All rev & gains – all exp & losses = net income

27
Q

What is discontinued operations?

A

disposed of or held for sale

28
Q

How do you calculate income from discontinued operations?

A

Impairment Loss + Operations + G/L on disposal

29
Q

Where do you report unusual AND infrequent items?

A

Extraordinary Items

30
Q

Where do you report unusual OR infrequent items?

A

Non-operating in continuing operations

31
Q

What is a change in accounting estimate?

A

PROSPECTIVE.

32
Q

What is a change in accounting principle?

A

RETROSPECTIVE. (GAAP to GAAP). GR = cumulative effect is change in earliest beginning RE balance. Exception = prospective if to LIFO or change in depreciation method

33
Q

What is a change in accounting entity?

A

RETROSPECTIVE. GAAP ONLY

34
Q

What is an error correction?

A

PRIOD PD ADJ

35
Q

What is Comprehensive Income?

A

includes all change in owners equity other than transactions with owners. = NI + Other Comp Inc (PUFER)

36
Q

What is included in Other Comprehensive Income?

A

PUFER. Pension Adjustments. Unrealized G/L on AFS Securities. Foreign Currency Items. Effective Portion of CF Hedges. Revaluation Surpluses (IFRS ONLY)

37
Q

What are the presentation methods for Other Comprehensive Income?

A

Single Statement Approach (Start w/ rev), Two Statement Approach (start w/ NI), Statement of changes in equity (GAAP ONLY. Ending soon)

38
Q

What is a classified BS?

A

Current & non-current A&L

39
Q

What is required by GAAP and IFRS in note1 or 2?

A

Summary of Significant Accounting Policies

40
Q

Is interim financial reporting required?

A

not by GAAP or IFRS, but it is by the SEC

41
Q

Compare IFRS vs. GAAP for interim reporting.

A

IFRS requires same principles used in annual and also has minimum requirements. (GAAP does not)

42
Q

What is segment reporting?

A

required disclosures for all public companies. Use same principles as annual. Do not eliminate inter company transactions

43
Q

What is the qualitative threshold for a reportable segment?

A

10% of (all revenue, reported profit/loss, or assets). Keep adding segments until >75% external revenue

44
Q

What is a development-stage enterprise?

A

(GAAP only). A start-up or pioneering development

45
Q

What is reported in first time adoption of IFRS?

A

3 BS. All other 2

46
Q

What is Form 10-K?

A

us annual audited report

47
Q

What is Form 10-Q?

A

us quarterly unaudited report

48
Q

What is Form 11-K?

A

employee benefits plan

49
Q

What is Form 20-F and 40-F?

A

like foreign 10-k

50
Q

What is Form 6-K?

A

like foreign 10-q but semiannually

51
Q

What is Form 8-K?

A

report major corporate events

52
Q

What are Forms 3, 4 and 5?

A

filed by directors, officers, and beneficial owners.

53
Q

What is Regulation S-X?

A

form and content of interim & annual F/S

54
Q

What are the requirements for interim FS?

A

Reviewed, 2 everything, adj for fair presentation

55
Q

What are the requirements for annual FS?

A

audit report. 2 BS & 3 IS/CF

56
Q

What is XBRL?

A

Extensible Business Reporting Language.

57
Q

What is XML?

A

Extensible Markup Language = data tags to describe financial information for bus & fin reporting

58
Q

What is a tag?

A

a machine-readable code. Provides contextual information

59
Q

What is taxonomy?

A

defines specific tags

CPA- FAR (9 decks)

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