F1 - FINANCIAL REPORTING Flashcards
FORM 10-Q
Quarterly Report
Filed within 40 Days for Large Accelerated Filer
45 Days for Small Corps
After the end of the First 3 Quarters
MUST HAVES:
Reviews of Interim Financial Information by an Independent CPA
Comprehensive Income
includes ALL changes in equity during a period
Except those resulting from investments by owners or distribution to owners
Treasury Stock transactions are owner transactions and are NOT part of comprehensive income
For Par-Value Method
Gains are recorded using the APIC - CS
BC it focuses on original issuance of the stock
IF Adjustments to APIC - CS are not enough then the amount hits
RETAINED EARNINGS (DR)
LOSSES ON RESALE:
IF TS is resold for less than its Par Value, the difference should hit APIC - CS, IF there isn’t enough then
The difference hit RE to absorb the remaining loss
Never record Gains in regards to TS on IS
For Cost Method
TS transactions are recorded based on the cost at which the share were repurchased
Gains from the sale of TS hit APIC - TS
When Repurchased TS account is debited for the total cost of the shares
Reduces equity account bc TS is Contra-Equity account
IF Resale of TS at a Gain - the excess amount is credited to APIC - TS
This reflects the gain on the resales of the TS
When disposing of an industry segment
Accounting rules require that all operating losses for the entire year in which the decision is made be included in the loss from discontinued operations
Ensures that FS reflect the full impact of the decision to discontinue the segment within the year it was made
Sales Revenue is an element of
Comprehensive Income
Book Value per common share =
Common Stockholder’s equity / Common shares outstanding
Donation of stock by a shareholder to the company
Results in NO change in total shareholders equity on the balance sheet
US GAAP
AN item that is both unusual and infrequent
Are reported as a Separate Component of Income from Continuing Operations
- PRE TAX BASIS
Outstanding Shares
Are shares that are held by investors
When issued a dividend
Then RE is Reduced then CS is increased
DR RE
CR CS
Basic EPS
Net Income - Preferred Dividends / Weighted Average Shares Outstanding
Diluted EPS
Net Income + Adjustments for Convertible Securities
/
WASO - Avg # of Common Shares Outstanding + Potential Shares from Conversion
Regulations S-X
Sets forth the form and content of and requirements for interim and annual financial stmts to be filed with the SEC
Regulations S-K
Sets forth the non-financial reporting requirements for various SEC filings used by public companies
Regulations S-T
Rules governing electronic filings
Regulations S-B
Disclosure requirements for small business issuers
Gains/losses on a Fair Value Hedge are reported in current income
Gains/losses on a Cash Flow Hedge are deferred and reported as a component of OCI until the hedged transactions impacts earnings
Fair Value Hedges
They protect against changes in FV of an Asset or Liability
These gains/losses are recorded on IS
Cash Flow Hedges
Protect against variability in future cash flows
Gains/Losses are recorded in OCI
Later are classified into earnings when the hedged transactions affects earnings
When stock rights are “issued” w/o consideration, no entry (only disclosure) is made by either the “issuer” or the “recipient”
At the time the rights are “exercised” (and the corporation receives a cash inflow) APIC would be credited if the purchase price of the stock exceeded the par value (which is usually the case)
RE is not affected bc this is a “capital” transaction, not an “operations” transaction
Form 10-K “Accelerated Filers”
An Accelerated Filer is an issuer
- With a public float of greater than or equal to $75 million
- Subject to the Securities Exchange Act’s reporting requirements for greater than or equal to 12 months;
- That previously filed at least 1 report
- Which is not eligible to file quarterly and annual reports on Forms 10-QSB and 10 KSB
Smaller reporting companies, which are entitles with annual revenues of less than $100 million, are excluded from the definition of large accelerated filers or accelerated filers
Rule: That portion in excess of stocks’ par value is credited to
Additional Paid-In-Capital
At the time the rights are exercised
Liquidating Dividend
Return of Capital ( which decreases APIC) and not a distribution of earnings ( which decreases retained earnings )
Common Stock account will increase
By the number of shares issued multiplied by the PAR VALUE of the shares themselves
Never Book Value
Rule: Allocate “issued proceeds” of a basket purchase or sale of convertible preferred stock based
On relative FM values
