F2 - Financial Reporting and Disclosures Flashcards
Going Concern period
Not to exceed one year pas the date the “FS are issued”
IFRS: Going Concern
Doesn’t provide guidance on liquidation accounting
Liquidation Accounting: Valuation of Assets
Asset may increase in value on the balance sheet: measured and presented at expected cash proceeds from liquidation
Sub Events Disclosure
Footnote disclosure is only required for losses that are reasonably possible
FV measurement Inputs
Level 1: quoted prices in the market of “identical” assets/liabilities “most reliable”
Level 2: quoted prices in the market for “similar” assets/liabilities
Level 3: Management assumptions (only used when 1&2 aren’t available)
Picking FV markets
Pick the one with the best “net price” (net value after transactions costs)
Reportable Segments:
Segments that make up at least 10% of total revenues.
Sales Disclosed for Segments:
Sales to 3rd parties and intercompany sales are reported separately
What is considered a major customer?
Customer making more than 10% of total revenues/profits/liabilities/assets, internal and external
When losses are involved in reporting segments:
10% of the total of profitable segments. Than take the greater of the absolute value of the income/loss for each segment. Greater = reportable
IFRS segments:
Don’t report: Cash Flow
Quarterly reporting:
If anything is to benefit multiple quarters, allocate that benefit/expense evenly to the quarters affected
Regulation S-X
Financials filled with SEC should include a minimum of 2 BS
Accelerated filers have a maximum of how long from the BS date to file their 10k? 10Q?
75 days and 40 (large), 45 (smaller)
XBRL
Require all financials/schedules to be filled. No MD&A or things of that sort
When should an “unusual/infrequent” occurring item be recognized for quarterly reporting?
Entire amount in period incurred
Property tax quarterly allocation
Allocate to every quarter benefited (typically all of them)
Income tax-basis financials are different why?
-Recognize certain revenues and expenses in different reporting periods.
Note on Income-tax basis financials
-Nondeductible portion of expenses are still shown in expense category
Cash accounting recognition
Revenue recognized and expense recognized when cash is paid or cash it paid out
Cash basis revenue to accrual basis revenue
Cash basis revenue \+Ending A/R -Beg A/R \+Ending Unearned Revenue -Beg Unearned Revenue
Cash to accrual rules:
Add: increases in current assets decreases in current liabs Subtract: decreases in current assets increases in current liabs
Common modification to cash basis FS
Capitalizing Inventory
A/R Turnover =
Net Sales/Avrg. Receivables
Also..
Avrg. Receivable x A/R turnover = Net sales
