F2 M4

Question 1

examples of disclosures for significant accounting policies

Answer 1

1) basis of consolidation
2) depreciation methods
3) amortization of intangibles
4) inventory pricing
5) use of estimates
6) fiscal year definition
7) special revenue recognition issues

Question 2

examples of disclosures for remaining notes

Answer 2

1) material info about inventory and PP&E
2) changes in stockholder’s equity
3) marketable securities gains/losses and carrying value
4) fair value estimates
5) segment reporting
6) contingency gains
7) changes in accounting principles
8) contractual obligations

Question 3

disclosures of risks and uncertainties

Answer 3

1) nature of operations
2) use of estimates in preparation of F/S
3) certain significant estimates
4) current vulnerability due to certain concentrations

Question 4

nature of operations note disclosure

Answer 4

entity’s major products or services and principal markets and their locations

Question 5

use of estimates in preparation of F/S disclosures

Answer 5

-estimates and assumptions that affect assets and liabilities
-disclosure of contingent assets and liabilities at date of F/S
-revenues and expenses during period

Question 6

when are certain significant estimates disclosed?

Answer 6

when it is reasonably possible that an estimate will change in the near term and that the effect of change will be material
-estimate of effect disclosed

Question 7

examples of estimates subject to change

Answer 7

1) inventory and equipment becoming obsolete due to tech advances
2) deferred tax asset valuation allowances
3) capitalized computer software costs
4) loan valuation allowances
5) litigation-related obligations
6) LT obligations, like pension and postretirement benefits
7) amts reported in LT contracts

Question 8

when due vulnerabilities due to concentrations arise?

Answer 8

when an entity is exposed to risk of loss that could be mitigated through diversification

Question 9

disclosure requirements for vulnerabilities due to concentrations

Answer 9

1) concentration exists at F/S date
2) concentration makes entity vulnerable to risk of near-term severe impact
3) at least reasonably possible events could cause severe impact and be material

Question 10

examples of concentrations

Answer 10

1) concentrations in market or geographic area
2) concentrations in supply of resources, like materials, labor etc.
3) concentrations in revenue from particular products, services or fund-raising events
4) concentrations in volume of business transacted with particular customer, supplier, lender, grantor, or contributor

Question 11

a note payable that has been refinanced to LT debt after balance sheet date but before F/S issued

Answer 11

recorded as non-current and disclosure made for it if note payable existed at balance sheet date