FAR 1 Flashcards
Name the single source of authoritative nongovernmental US GAAP
FASB Accounting Standards Codification (ASC)
What is the Private Company Council
FAF Fin Acct. Foundation Created the PCC to improve standard setting for Private companies
Goal of PCC establish alternative US GAAP where appropriate to make private comp. FS more relevant, less complex, and cost beneficial
Accounting Alternatives for Private companies are incorporated into the relevant sections of the ASC
Who are the primary users of General Purpose Financial Reports?
Lenders
Investors
Creditors
Name the fundamental QUALITATIVE characteristics of useful Financial Information
relevance and Faithful representation
Name Three elements of Relevance
Predictivity
Confirmability
Materiality
Name the Three elements of FAITHFUL representation
Free from error
Neutral
Complete
Name the QUALITATIVE ENHANCING characteristics of financial information
Timeliness
Verifiable
Comparable
Understandable
Name the pervasive constrain on the information provided in financial reporting
COST CONSTRAIN:
The benefits of reporting financial information must be greater than the cost of obtaining and presenting the information
According to SFAC 5 what should a full set of financial statements include?
IS (St of earnings)
BS (St of fin position)
CF (St of cash flow)
CI (St of Comprehensive income)
OW EQ changes (St of changes in Ow equity)
List the 10 elements of Financial Statements according to SFAC 6
CREG and LALEID
Comprehensive income
Revenue
Expenses
Gains
Losses
Assets
Liabilities
Equity (of Net assets)
Investments by owners
Distributions to owners
Name the fine elements of PV measurement per SFAC 7
TUVEO
- Time value of money
- Uncertainty, the price for bearing it
- Variations of future cash flows, expectations about it
- Estimate of Future cash flow
- Other factors (e.g., liquidity issues and market imperfections)
Describe the expected cash flow approach for PV computations
Considers a Range of possible CF.
Assigns a probability to each.
Determine weighted average, or Expected Future CF
Name the expense that each of the following unexpired costs turn into as they expire
Inventory
Unexpired (prepaid) cost of insurance
Net book value of fixed assets
Unexpired cost of patents
Inventory -COGS
Unexpired (prepaid) cost of insurance - insurance expense
Net book value of fixed assets - Depreciation
Unexpired cost of patents - Amortization
Are gains and losses on the disposal of assets shown on “gross basis” (I.e., where both the sale proceeds and the net book value of the disposed asset are reported) or on the “net basis (I.e., where only the difference between the sale price and the net book value of the disposed asset is reported)?
Gains and losses are reported at their Net amounts (I.e., proceeds less net book value)
How does a “multiple step” IS differ from a “single step” IS
- Multiple step IS reports Operating revenues and expenses Separately from Nonoperating revenues and expenses and other gains and losses
- Single step IS’s presentation of Income from continuing operations, total expenses are subtracted from total revenue without separation between Operating and Nonoperating
What is meant by a “classified” BS?
A classified BS distinguishes Current and Noncurrent assets and liabilities
