F2 Flashcards
When do recognize a loss on a project
Immediately no matter if its point in time of over time rev rec
When does a contract modification count as a separate contract?
When there is a price change and a change in scope both occuring simultaneously.
What are milestones achived?
An output method of rev rec
When will sellers book a transaction as a financing agreement?
If the repurchase price is equal to or greater than the original sales price and the expected market value.
Changes in the equity method to the cost method
Require no restatements
Changes from cost to equity method
Restatement is required
What do we do when we don’t know if it is an accounting change or change in estimate
We take it as a change in estimate and act on it prospectively.
Changes to LIFO
Prospective all other retrospective
How do we adjust an asset that was expensed incorrectly in one year?
Find the depreciation that should of occured in the year of the error subtract the full amount that was expensed incorrectly and multiply by 1-tax% and that will be you year end adjustment.
(depreciation-amount expensed)*(1-Tax%)
How do we treat contracts that were evenly distributed over the year?
The earned rev from the contracts will be half of the full amount received from the contract. treat it as half a year.
If bonusaes were not payd we
assume that they did not book the expense
What do footnotes contain
Information on assets and liabilities
When taking into account accrued salaries payable we don’t include
Advancements to employees
What do companies do when a customer is responsible for a major part of their rev
They simply disclose the amount of rev that that specific customer is responsible for
SEC values subsequent events until?
Date of issuance and they don’t have to disclose this as it is a general rule.
