F1M1 Flashcards
SEC established year, and purpose of SEC
1934, issues acc rules and regulations
CAP and APB
committee on accounting procedure, accounting principle board
PCC
private company council
ASC
accounting standard codification
purpose of ASC
- provide background info. 2. update info. 3. describe the basis for conclusion on changes
IFRS
2001, established as part of IFRS foundation, issues IFRS
IASB
includes IFRSs IASs, SIC interpretation by IFRIC
conceptual framework of FASB
provides concept of FA basic reasoning, it is called SFAC
purpose of FR
provide info to primary users for the purpose of DM
Primary users includes
exiting and potential investors lenders creitors and regulators
Fundamental qualitative characteristics of Info.
Relevance and faithful representation
Faithful presentation includes
complete neutral free from error
relevance includes
predictive value , confirmation value, materiality
enhancing qualitative characteristics
comparability varfiability, timelinese, understandability
nonbusiness characteristics
lack of ownership interests, operation purpose, significant portion of resource come from contributions and grants
users of nonbusiess orgs info
resource provider constituents govering and oversight bodies managers
objective of FR of none bus orgs
resource allocation assessing services and the ability to provide services; assessing mgt stewardship and performance, info about operation
What is PUFE
part of comprehensive income; pension adjustment unrealized gains or losses foreign currency items effective portion cash flow hedges
fundamental recognition criteria
definitions measurability relevance reliability
5elements of present value measurement developed by FASB
VOTEU: timing variation of FCF; other factors(liquidity issues and market imperfection); Time value of money; estimate of FCF; price for bearing uncertainty
what if Fair value cannot be determined in markeplace
estimate fair value using the pv of FCFs
Two approach of PV computation
- traditional (one discount rate); 2. expected CF(use risk free rate of return as discount rate)
congrats and keep it up!
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