F2-M5 Subsequent Events/FMV Measurement Flashcards
When insurance is involved what is the amount that should be disclosed in the footnotes.
If the insurance is going to cover the liability only the deductible portion is going to be disclosed.
What is available to be issued
F/S is ready but has not been widely distributed
Entities that file with SEC differ than those who do not for what reason?
Typically subsequent event evaluations occurs till when F/S are issued. With SEC files this only has to be happen till year end.
What happens if there is no principal market
Determine the most advantageous market: Finding the best price after transaction cost. Than determine the fair value WITHOUT transaction cost.
When value of an asset is impaired the best measurement of FMV is:
Price that would be received type of building it its “principal market”.
How is advantageous market determined
Whichever market has the highest sale proceeds.
What is a market participant
Buyer-seller who are unrelated and is not being force to sale, such as a lien or judge order.
What is more accurate Identical or similar investments and does that superseded management estimate
Quoted price of IDENTICAL investments supersede management estimates
How is the FMV of resident land evaluated?
Residential land is evaluated with the investment of the development. I.E, if the FMV is 110k but after investment 150k, the true FMV is 150k.
Define level 1, level 2 and level 3 for FMV measurement.
Level 1: Quoted market prices for identical assets. Level 2: Inputs for similar assets OR inputs other than quoted prices that are observable. Level 3: inputs from unobservable assumption such as projected cash flow.
An entity that does not file with the SEC what is the subsequent event evaluation period end?
It ends up till the date that the financial statements are ready to be are available to be issued.
