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FAR > FAR 1 > Flashcards

FAR 1 Flashcards

1
Q

Qualitative Characteristics

A

Relevance and Faithful representation

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2
Q

Relevance (Qualitative characteristics)

A
  1. Predictive value - allows investors to predict future outcomes
  2. Confirm Value - provides feedback about evaluations previously made by users
  3. materiality - info is material if an omission or misstatement of the information could affect the decisions
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3
Q

Faithful Representation

Qualitative Characteristics

A
  1. Completeness - complete depiction of F/S
  2. Neutrality - free from bias
  3. Freedom from erros
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4
Q

Realization

A

Converting noncash resources right into money

realize gain/loss

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5
Q

Recognition

A

Process of reporting an item

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6
Q

Enhancing Qualitative Characteristics

A
  1. Comparability
  2. Verfiability
  3. Timeliness
  4. Understandability
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7
Q

Elements of PV measurement

A
  1. Price for bearing Uncertainty
  2. Expectations about Timing Variations of Future cash flows
  3. Other Factors
  4. Time value of Money
  5. Estimate future cash flow
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8
Q

Rule of Conservatism

A
  1. Revenues and gains should be recognized when EARNING PROCESS IS COMPLETE
  2. Expense and losses recognize IMMEDIATELY
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9
Q

Replacement cost

A

Cash or equivalent that would be paid to acquire an asset currently
It is an ACQUISITION COST

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10
Q

Current market value, fair value

A

The value to sell an asset

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11
Q

Historical cost

A

The amount paid by the company purchase the asset

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12
Q

Net realizable value

A

selling price - cost of disposal

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13
Q

Accounting standards Update is issued only after…

A

A majority vote of the members of FASB

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14
Q

International Accounting Standard Board (IASB) Framework fundamental assumption

A

Going concern

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15
Q

Before issuing a new International Financial Reporting Standard, it must be…

A

approved by at least 9 members of IASB

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16
Q

According to the FASB conceptual framework, financial reporting to be useful, it must

A

Provide information useful for making business and investment decisions

17
Q

Summary of significant accounting policies

A
  1. Should disclose policies

Example:

  1. Criteria for determine certain things
  2. basis of profit recognition
18
Q

Info presented in Notes to F/S have the purpose of…

A

Providing disclosures by GAAP

19
Q

Related Party disclosures

A

GAAP - only loans to officers

IFRS - include loans to officers and key management compensation

20
Q

Significant estimates should be disclosed when it is…

A

Reasonable possible (NOT PROBABLE) that the estimate will change in the near future

21
Q

Criteria to be included as reportable operating segments

A
  1. Operating segment ‘s revenue > 10% of total (combined) revenue

Revenue should be both intersegment sales and sales to unaffiliated customers

  1. segment’s assets constitute more than 10% of combined assets of all operating
  2. reported profit/loss > 10%
    Step 1: Add all the income together
    step 2: add all the loss together
    step 3: pick the greater of income or loss x 10%
    step 4: if the component income/loss is GREATER THAN amount in step 3, then it is a reportable segment
    CPA - 05055
22
Q

Operating profit by segments is based on measure of profit reported to…

A

Chief Operating Decision Maker

Anything not reported to chief operating decision maker is not included in segment operating profit

General expenses, income taxes, gain/loss from discontinued operation are not included in operating segment profit

23
Q

To conform with GAAP, F/S for public business enterprise must report segment info about a company’s major customers if…

A

that customer provides 10% or more of the combined revenue of all opertaing segments

24
Q

Which type of entity required to report on business segments

A

only publicly-traded companies

25
Q

Which segment financial statement is not reported under IFRS

A

Statement of cash flow

26
Q

Which segment F/S is not reported under GAAP

A

segment liabilities

27
Q

Unaudited Financial statements

not required to be included in audited financial statements

A
  1. Form 6-K - filed semi-annually by foreign private issuers

2. Form 10-Q - filed quaterly by U.S registered companies

28
Q

Audited Financial Statement

A
  1. 10-K - U.S. registered audited companies
  2. 40-F annual specific Canadian companies registered with SEC
  3. 20-F - filed annually by non-U.S registrants registered with SEC
29
Q

Under Regulation S-X, audited F/S filed with SEC should include

A

Balance Sheet - 2 years

Income statement, Changes in owners’ equity and cash flow for 3 fiscal year

30
Q

Maximum number of days for filing for 10-K

A
  1. Large accelerate filers - 60 days (700 million floats)
  2. accelerate filers - 75 days (> 75 million float)
  3. non-accelerated - 90 days
31
Q

Statement of periods presented

A
  1. BALANCE SHEET - end of most recent fiscal quarter and as of the end of the preceding fiscal year (corresponding fiscal quarter for the preceding fiscal year is not required unless necessary to understand seasonal fluctuations)

INCOME STATEMENT - most recent fiscal quarter, period between the end of preceding fiscal quarter and the end of most recent fiscal quarter, and coressponding periods of the preceding fiscal year
May also include 12 month period

STATEMENT OF CASH FLOWS - end of the preceding fiscal year and end of most recent fiscal quarter corresponding period for preceding fiscal year

32
Q

XBRL is required for

A

10-K, 20-F, 6-K

Present F/S, including B/S, statement of comprehensive income, and all footnotes, and any applicable F/S schedules be prepared using XBRL

33
Q

Maximum filing period for 10-Q

A
  1. large accelerated filer - 40 days

2. small filer - 45 days

FAR (12 decks)

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