F1 Flashcards
What is the order of standard setting bodies that determined GAAP?
1939- CAP, 1959- APB, 1973- FASB
What is the FASB’s Accounting Standards Codification (ASC)?
effective July 1, 2009. single source of authoritative nongovernmental US GAAP
What authoritative literature is included in the ASC?
FED PRIA. FASB, EITF, Derivative Implementation Group Issues, APB, ARB, Accounting Interpretations, AICPA
What is the purpose of the IASB (International Accounting Standards Board)?
to develop a single-set of high-quality, global accounting standards
What does the IFRIC (International Financial Reporting Interpretations Committee) do?
provides guidance on newly identified financial reporting issues not addressed in IFRS, and assists IASB in achieving convergence of international accounting standards
What is included in IFRS (international Financial Reporting Standards)?
IFRS, IASs, & interpretations developed by IFRIC and former SIC
IASB & FASB have been working towards convergence of GAAP and IFRS since when?
2002
What are the SFAC?
The Statements of Financial Accounting Concepts are the basic reasoning behind FASB pronouncements
What is SFAC No.8 Chapter 1?
defines primary users (existing & potential investors, lenders, and other creditors) & financial reports (must meet the users informational needs)
What is SFAC No.8 Chapter 3?
defines the fundamental qualitative characteristics of useful financial information
What are the Fundamental Qualitative Characteristics?
It is RELEVANT that your bf is FAITHFUL while you are studying…. Relevant & Faithful Representation
In order to be relevant, info must have?
PASSING COMFIRMS MONEY. Predictive Value, Confirming Value, Materiality
In order to meet Faithful Representation, info must be?
COMPLETELY NEUTRAL IS FREE FROM ERROR. Completeness, Neutrality, Freedom from error
What are the Enhancing Qualitative Characteristics?
COMPARE & VERIFY IN TIME TO UNDERSTAND. Comparability, Verifiability, Timeliness, Understandability
What is SFAC No. 5?
includes a full set of F/S, measurement attributes for A & L, and Fundamental assumptions
What are the ways to measure A & L?
historical cost, current cost, NRV, market value, PVFCF
What are the fundamental assumptions of GAAP?
entity, going concern, monetary unit, periodicity, historical cost principle, revenue recognition principle, matching principle, accrual accounting, full disclosure principle, conservationism principle
What are the fundamental assumptions of IFRS?
accrual basis & going concern
What is SFAC No. 6?
The elements of the financial statements
What are the elements of the financial statements
REGL ALE needs ID. IS (REGL), BS (ALE), Inv & Dist to owners
What is SFAC No. 7?
The framework for using FCF as a measurement basis for A&L
What are the 5 elements of PV measurements?
Estimate FCF. Timing variations of FCF, TVM, Credit risk, etc.
What are the 2 different approaches to calculating PV?
Traditional (scheduled known payments) or Expected (uncertain future payments)
What is the presentation order for IS and RE?
IDEA. Income from Continuing Operations (gross & net), Income from Discontinued Operations, Extraordinary Items, Change in Acc Principle (RE only)
What is the multiple step income statement?
REV & Exp from operating + rev & exp from non-operating – taxes = net income
What is the single step income statement?
All rev & gains – all exp & losses = net income
What is discontinued operations?
disposed of or held for sale
How do you calculate income from discontinued operations?
Impairment Loss + Operations + G/L on disposal
Where do you report unusual AND infrequent items?
Extraordinary Items
Where do you report unusual OR infrequent items?
Non-operating in continuing operations
What is a change in accounting estimate?
PROSPECTIVE.
What is a change in accounting principle?
RETROSPECTIVE. (GAAP to GAAP). GR = cumulative effect is change in earliest beginning RE balance. Exception = prospective if to LIFO or change in depreciation method
What is a change in accounting entity?
RETROSPECTIVE. GAAP ONLY
What is an error correction?
PRIOD PD ADJ
What is Comprehensive Income?
includes all change in owners equity other than transactions with owners. = NI + Other Comp Inc (PUFER)
What is included in Other Comprehensive Income?
PUFER. Pension Adjustments. Unrealized G/L on AFS Securities. Foreign Currency Items. Effective Portion of CF Hedges. Revaluation Surpluses (IFRS ONLY)
What are the presentation methods for Other Comprehensive Income?
Single Statement Approach (Start w/ rev), Two Statement Approach (start w/ NI), Statement of changes in equity (GAAP ONLY. Ending soon)
What is a classified BS?
Current & non-current A&L
What is required by GAAP and IFRS in note1 or 2?
Summary of Significant Accounting Policies
Is interim financial reporting required?
not by GAAP or IFRS, but it is by the SEC
Compare IFRS vs. GAAP for interim reporting.
IFRS requires same principles used in annual and also has minimum requirements. (GAAP does not)
What is segment reporting?
required disclosures for all public companies. Use same principles as annual. Do not eliminate inter company transactions
What is the qualitative threshold for a reportable segment?
10% of (all revenue, reported profit/loss, or assets). Keep adding segments until >75% external revenue
What is a development-stage enterprise?
(GAAP only). A start-up or pioneering development
What is reported in first time adoption of IFRS?
3 BS. All other 2
What is Form 10-K?
us annual audited report
What is Form 10-Q?
us quarterly unaudited report
What is Form 11-K?
employee benefits plan
What is Form 20-F and 40-F?
like foreign 10-k
What is Form 6-K?
like foreign 10-q but semiannually
What is Form 8-K?
report major corporate events
What are Forms 3, 4 and 5?
filed by directors, officers, and beneficial owners.
What is Regulation S-X?
form and content of interim & annual F/S
What are the requirements for interim FS?
Reviewed, 2 everything, adj for fair presentation
What are the requirements for annual FS?
audit report. 2 BS & 3 IS/CF
What is XBRL?
Extensible Business Reporting Language.
What is XML?
Extensible Markup Language = data tags to describe financial information for bus & fin reporting
What is a tag?
a machine-readable code. Provides contextual information
What is taxonomy?
defines specific tags
