F1 - Financial Statements Flashcards
What are the transactions included in OCI?
*Adjustment for a prior-yera understatement of amortization expense - prior period adjustment and reflected in the beginning retained earnings
*Gain on sale of available-for-sale securities - reflected in the income statement
*Gain on disposal of a discontinued business segment - reflected in the income statement
*Unrealized gain on available-for-sale debt securities - reflected in OCI
What are the criteria for a segment to be reported as discontinued operation?
Earliest point a segment can be reported as a discontinued operation is when the component meets the following “held for sale” criteria:
1. Management commits to a plan to sell the compoent.
2. The component is available for immediate sale in its present condition
3. An active program to locate a buyer has been initiated.
4. The sale of the component is probable and the sale is expected to be completed within one year
5. The sale of the component is being actively marketed.
6. It is unlikely that significant change to the plan to sell will be made or that the plan will be withdrawn.
How do you quote a foreign exchange using the direct method?
Quoting the exchange rate using the direct method involves quoting the domestic price of one unit of another currency.
How is the amortization of an actuarial pension loss reflected in the financial statement?
Amortization of an actuarial pension loss - increases OCI and increase pension expenses (ie decrease in net income) - NO NET IMPACT to comprehensive income
How is OCI presented in the financial statement?
OCI presented either as follows:
- Report components of OCI on an individual net of tax basis, or
- Each component on a before tax basis with one amount shown after for the aggregate tax effects
What are the transactions that requires Form 8-K filing?
Form 8-K
- reports major corporate events
- corporate asset acquisitions/disposals
- accountant changes
- financial statement changes
- management changes
- changes in securities, etc.
How do you determine which of the security should be included in calculating the diluted EPS?
Each potentially dilutive security is considered separately for its dilutive effect. If the effect is an increase, then it is not used as this is ANTIDILUTIVE.
When are stock options NOT considered in the calculation of diluted EPS?
The stock options are out of the money (antidilutive) because the exercise price exceeds the market price.
What are considered accelerated filer and when are they expected to file their annual report?
Accelerated Filer - 75 days after company’s fiscal year
Accelerated Filer is an issuer:
- with a public float of greater than or equal to $75 million
- subject to the SEC reporting requirements for greater than or equal to 12 months
- that previously filed at least on report;
- which is not eligible to file quarterly and annual reports on Forms 10-QSB and 10-KSB
What are the relationships between smaller reporting companies and non-accelerated, accelerated, and large accelerated filers under the amendments?
What is public float?
Public float refers to the total value of a company’s shares that are held by public investors, excluding shares held by insiders, such as company officers and directors. It’s calculated by multiplying the number of outstanding shares by the current market price.
When do large accelerated and accelerated filers submit their Form 10-Q?
Large accelerated and accelerated filers, 10-Q is due within 40 days of the period end.
How do you calculate EPS?
EPS = (NI - Preferred Dividends) / Weighted Shares Outstanding Shares
How do you calculate Diluted EPS?
Diluted EPS = Adjusted Net Income / Adjusted SHS/OS
