FAR 1 Flashcards
What do lease payments include at the beginning of a lease?
Fixed Lease Payments and in substance fixed payments
Variable lease payments dependent on a rate or index Payments associated with renewal or termination options or the exercise of a purchase option Fees Paid by the Lessee to Owners of Special-Purpose Entities Residual Value Guarantee
What do lease payments exclude?
Variable Lease payments not dependent on an index or rate
Guarantee of lessors debt
What is a small stock dividend?
What is a large stock dividend?
20-25% - Reduce Retained earnings by the Fair value amount of shares issued
More than 20-25% - Reduce R/E by the par value of shares issued
What are the 3 components of Net Position for Gov’t Business (fund) type activities?
Net investment in Capital Assets
Restricted
Unrestricted
What is the affect on failure to accrue an expense and a payable on working capital and cash flow?
No effect on Cash flow
Overstates Working capital since Liability was not recorded - Understates a Liability
What are the 3 components of Net Position for Gov’t Fund type activities?
Committed and assigned
When a non-monetary transaction occurs that lacks commercial substance, what amount is recorded for the new asset?
Book value amount of the CV of the asset given up in exchange for new asset
For the general fund, what is classified as other financing sources?
Proceeds of debt issue
Interfund transfers of debt service
How to reconcile cash balance per books for a second month.
Balance Per Bank stmt = End bank balance Prior month
+Deposits in current month
-Disbursements in current month
-Outstanding checks in current month
= Cash Balance per books at end of current month
What is the following characteristic of a perfect hedge?
No possibility of future gain or loss
For a sales type lease, is gain recognized?
Yes, full amount of gain is recognized.
Fair Value of the Equipment or (sum of lease receivable and any prepaid lease payments by lessee, if lower) - CV of equipment = Gain
Interest revenue is recognized over the life of lease
What are examples of disclosure requirements for significant accounting policies?
Integral part of the Financial statements
How investments are treated as cash equivalents
basis of accounting for loans & Trade receivables
Method of recognizing interest income on loan and trade receivables
Depreciation methods
How profit on long-term contracts are recognized
basis of consolidation
If an employer-employee relationship exists with volunteers, how would a NFP record services rendered by volunteers?
Services would be recorded at Fair Value as both an expense and a contribution
How is restricted cash treated?
as a current or non-current asset
Where is a Foreign transaction gain shown?
Where is a Foreign translation gain shown?
Foreign transaction is shown in Income Statement
Foreign Translation is shown in OCI
How should a municipal solid waste landfill be recorded in a Gov’t Type general fund?
Dr Expenditure
Cr Fund liabilities
No affect on L/t liabilities and L/T assets since Modified accrual is used
What is the contribution called for by a plan for the period in which the individual renders services?
Net Pension costs
What is the total consideration equation when non-monetary transaction has commercial substance?
FV of asset given up + Cash given up
or
FV of asset given up - Cash received
Gain or Loss recognized in Full
What are supporting activities expense for a NFP?
Fundraising costs, administrative costs & membership development expenses, management & general activities
What are program expenses for a NFP?
Expenses that relate directly to organizations mission. Such as expenses that directly correlate with nurses that work with a NFP hospital to carry out their services.
Where would a bond issued at 98 be classified in the operating $ Flows?
Financing inflow of cash
How should underlying securities owned with regard to reverse repurchase and fixed coupon reverse repurchase agreements be disclosed as?
Reported as investments
What are the financial categories of a NFP’s financial position?
Assets, Liabilities, Net Assets
Net Assets are made up of Net Assets with donor restrictions and Net assets without donor restrictions
For troubled Debt restructuring what is the complete equation to solve for ordinary gain in income from continuing operations?
FV of land transferred
= Gain on restructure
FV of Land transferred - Carrying amount of land = Gain on disposition
Ordinary Gain = Gain on restructure + Gain on disposition
