F1-Comprehensive Income-SEC Reporting

Question 1

What is Comprehensive Income?

Answer 1

Comprehensive income is the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from NON OWNER sources.

It is Net Income + Other Comprehensive Income

Question 2

What is Other Comprehensive Income?

Answer 2

Revenues, expenses, gains, and losses that are included in comprehensive income but excluded from the income statement per GAAP or IFRS.

Question 3

What is included in OCI?

Answer 3

PUFE likes to Revalue his income.

Pension Adjustments
Unrealized Gains and Losses
Foreign Currency Items
Effective Portion of Cash Flow Hedges
Revaluation Surplus (IFRS only)-gains and losses from the revaluation of intangible assets and fixed assets.

Question 4

What is Accumulated Other Comprehensive Income?

Answer 4

It is a component of equity that includes the total of OCI for the period and previous periods. OCI for current period is “closed” to this account which is reconciled similar to the way RE is reconciled.

Question 5

According to US GAAP, how can Comprehensive Income be reported?

Answer 5

1) A single statement of comprehensive income (starting with revenues expenses and ….)
2) An income statement followed by a separate statement of comprehensive income that begins with net income (two statement approach)
3) will be going away…statement of changes in equity.

Question 6

How is OCI to reported? Net of tax or before tax?

Answer 6

Can be either, with one amount shown for income tax expense or benefit shown.

Question 7

What types of things should be in the notes to Financial Statements?

Answer 7

1) Summary of Significant Accounting Policies
- IFRS requires a statement of compliance, US GAAP does not.
2) Remaining Notes to the Financial Statements
- contain all other information relevant to decision makers.
3) Related Party Disclosures

Question 8

How are income taxes to be treated from interim reporting?

Answer 8

It is estimated each quarter. General rule is to multiply the YTD income by the estimated effective tax rate and subtract the result from the provision included in the previous quarter.

Question 9

What is an operating segment?

Answer 9

1) Engages in business activity from which it may earn revenues and incur expenses (including intercompany revenues and expenses)
2) Operating results are regularly reviewed by Chief Operating Decision Maker
3) Discrete financial information is available.

Question 10

What should a company’s Opening IFRS Financial Statements consist of?

Answer 10

3 balance sheets, 2 comprehensive income statements, 2 income statements (if using two statement approach), 2 cash flows, 2 changes in equity

Question 11

What is included on a Securities Offering Registration Statement?

Answer 11

1) Disclosures about the securities being offered for sale
2) The relationship of new securities to the company’s other securities
3) Information similar to that filed in the annual filing
4) Audited Financial Statements
5) A description of business risk factors

Question 12

What is the Form 10-K

Answer 12

Annual filing with the SEC with audited financial statements prepared using US GAAP.

Question 13

What is the form 10-Q

Answer 13

Quarterly filing with the SEC with unaudited financial statements

Question 14

Form 11-K

Answer 14

Annual report of a company’s employee benefit plans

Question 15

What are Forms 20-F and 40-F

Answer 15

These are annual filings by foreign issuers. 40-F is for canada and 20-F is any other non-US registrant.

Question 16

What is Form 6-k?

Answer 16

Similar to form 10-Q, but instead is a semi-annual filing required for foreign private issuers.

Question 17

Form 8-K?

Answer 17

Form filed to report major corporate events.

Question 18

Forms 3,4, and 5?

Answer 18

Required to be filed by directors, officers, or beneficial owners of more than 10% of a class of equity shares.

Question 19

What are the SEC requirements for Periods presented in the annual financial statements?

Answer 19

2 balance sheets, 2 income statements, and 3 cash flows

Question 20

What are examples of related party transactions?

Answer 20

1) Sales, purchases, and transfers of real property
2) Services received or furnished, such as accounting, management, engineering and legal services.
3) Use of Property and equipment by lease or otherwise
4) Borrowings, lendings, and guarantees,

Question 21

According to US GAAP, what disclosures do not need to be included for Material Related Party Transactions

Answer 21

Compensation arrangements, expense allowances, and other similar items in the ordinary course of business.

Question 22

What are the IFRS rules in regards to Related Party Disclosures?

Answer 22

Unlike US GAAP, compensation arrangements should be disclosed.

Question 23

What are the limits of days to file annual financial statements with the SEC?

Answer 23

Large Accelerated Filers: 60 Days
Accelerated Filer: 75 Days
Non-Accelerated Filers: 90 Days