F2 - M4 - Accounting Disclosures Flashcards
For the significant accounting policy footnote, what do these include?
Measurement bases used in the financial statements.
Specific accounting principles and methods used in the accounting period which include:
Depreciation methods, amortization, inventory pricing, use of estimates, fiscal year definition, special revenue recognition issues.
What are some of the things that would not be in the significant accounting policy footnote? IMPORTANT: These are found in the footnotes, just not the significant accounting policy footnote.
Composition and detailed dollar amounts of account balances
Changes in accounting principles
Dates of maturity and amounts of long term debt
Computation of depreciation, depletion and amortization
For concentrations, when would a company need to disclose this in the financial statements?
The concentration exists at the financial statement date
Makes the entity vulnerable, so if this did happen, they would be in trouble.
Also, we think that might actually happen.
For example: You depend on one customer of supplier, availability of materials, geographic risks.
What is a type 1 subsequent event? Recognized subsequent events
This provides information that happened as of the balance sheet date. It must be recognized or adjusted in the financial statements.
What are non recognized subsequent events
These are events that happen after the balance sheet date and might need to be disclosed, but they will not adjust the financials.
When would you stop looking at subsequent events for public and non public companies?
Public - You evaluate subsequent events for a little bit longer even after the declaration of the financial statements.
Private - Stop evaluation once the organizations declare the financial statements are available to be issued.
If financial statements are reissued, do you have to do subsequent events again?
Normally you do not, unless GAAP requires it.
