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Becker FAR > F1 > Flashcards

F1 Flashcards

1
Q

Types of Accounting Treatment for Changes in:

  • estimate
  • principle
  • entity
  • error correction
A
  • estimate = prospective
  • principle = retrospective
  • entity = retrospective
  • error correction = prior period adjustment/restate
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2
Q

Two Exceptions to Change in Principle

A
  1. change in depreciation method (prospective)

2. change to LIFO (no records will exist; prospective)

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3
Q

Non-owner Transactions

A
  • everything except for things relating to stocks & dividends
  • shareholders = owners
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4
Q

How is OCI and the resulting AOCI presented?

A

net of tax

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5
Q

Does comprehensive income have EPS?

A

no

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6
Q

Two options for Comprehensive Income

A
  1. single statement with NI

2. separate statement

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7
Q

Where is the tax benefit/expense from OCI items showed?

A

*on the face of the statement or in the notes

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8
Q

Reportable Segment Requirements

A

10% of

  1. assets
  2. profit (separate out losses in separate column)
  3. revenue (do not eliminate intercompany transactions)

*must have 75% of external revenues

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9
Q

75% Test

A

*relates to segments; must report at least 75% of external revenues

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10
Q

First Time Adoption of IFRS Requirements

A

3 years of balance sheets

2 years for everything else

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11
Q

What tax rate should be used at the interim date?

A

the enacted rate that will apply

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12
Q

Presentation of Financial Statements under GAAP

A

2 years balance sheet

3 years for cash and income

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13
Q

Do you report items when they are recognized or realized?

A

realized AND recognized

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14
Q

What does the Joint Framework establish?

A
  • it establishes a common set of objectives and concepts

* does NOT establish GAAP

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15
Q

When is an Accounting Standards Update issued?

A

*when it has been approved by a majority of the members of FASB

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16
Q

5 Elements of Establishing Present Value

A
  1. estimate of future cash flow
  2. expectations about timing variations of future cash flows
  3. time value of money
  4. price for bearing uncertainty
  5. liquidity issues and market imperfections
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17
Q

Fundamental and Enhancing Characteristics

A

Relevance (Passing Confirms Money)

  • predictive value
  • confirmatory value
  • materiality

Faithful Representation (Completely Neutral is Free From Error)

  • completeness
  • neutrality
  • free from errors

Enhancing

  • comparability/consistency
  • verifiability
  • timeliness
  • understandability
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18
Q

Two Underlying Assumptions under IASB

A
  1. accrual accounting

2. going concern

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19
Q

When can an exposure draft be issued under IASB?

A

*it must be approved by at least nine members of the IASB

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20
Q

What type of expense is freight out?

A

a selling expense

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21
Q

When are cumulative changes made?

A

*at the beginning of the year no matter when they were made in the current year

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22
Q

What must a discontinued operation be deemed as?

A

held for sale

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23
Q

Do purchase discounts affect inventory and COGS or revenue?

A

inventory and COGS

24
Q

Do prior period adjustments appear on the income statement?

A

no

25
Q

Change in estimating bad debts is accounted for?

A

prospectively

26
Q

Can you capitalize organizational costs?

A

no

27
Q

Is comprehensive income reported on interim financials?

A

yes

28
Q

Are trading securities reported in income or comprehensive income?

A

income

29
Q

What is the purpose of comprehensive income?

A

To explain ALL changes in equity from non-owner transactions

30
Q

Purpose of financial notes?

A

provide disclosures REQUIRED by GAAP

31
Q

Would loans to officers and key management compensation require disclosure under IFRS?

A

yes

32
Q

Are intercompany sales related party transactions?

A

no

33
Q

Related Party Disclosure Requirements

A
  1. amount due

2. amount during the year

34
Q

What should you disclose in relation to a large investment in a subsidiary?

A

*the method used to account for the investment

35
Q

What is a required disclosure for segment reporting?

A

*disclosure of an entity’s major products or services and markets

36
Q

Interim reports are ______ parts of an annual period

A

integral

37
Q

When estimating tax for the interim, use ________

A

the rate that would be effective in the entire year

38
Q

Inventory Losses and the Interim

A
  1. expected to recover = no record
  2. not expected to recover = book in fourth period
  3. permanent decrease = record in interim period
39
Q

Should discontinued operations and extraordinary items be recorded at interim dates?

A

yes

40
Q

Should significant estimates be made when it is reasonably possible that they will change in the near future?

A

no

41
Q

Do unaffiliated and intercompany sales need to be disclosed?

A

yes, separately

42
Q

Should unallocated expenses be included in the segment’s income statement?

A

No, it specifically has to be allocated by the CFO

43
Q

Disclose customers who provide more than

A

10% of ALL revenues (not just segment revenues)

44
Q

Segments must report to __________ to be considered a segment

A

the CFO

45
Q

Which companies are required to report on segments?

A

only public companies

46
Q

Is segment cash flow reported under IFRS?

A

no

47
Q

Date of transition to IFRS will be shown on ______

A

the earliest statement shown

48
Q

Where do all adjustments for going to IFRS go?

A

directly to R/E in the first period

49
Q

IFRS equivalent of Balance Sheet

A

*statement of financial position s

50
Q

SEC Filing Due Dates

A

10-K

  • large company accelerated: 60 days
  • accelerated: 75 days
  • non-accelerated: 90 days

10-Q

  • large accelerated: 40 days
  • others: 45 days
51
Q

Without fluctuations, a form 10-Q should include balance sheets from

A

*the end of the preceding fiscal year

52
Q

Usually need a __________ to accompany a cash flow statement for a recent fiscal quarter

A

*complete fiscal year comparison

53
Q

XBLR has modified liability for

A

24 months from the time the filer is required to file

54
Q

Two Types of Segments that cannot be Reportable Segments

A
  1. headquarters

2. pension plan

55
Q

Discontinued Operations and Extraordinary Items are presented

A

NET OF TAX

Becker FAR (10 decks)

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