FAR 10 Flashcards
How do you handle a change in the decommissioning liability under IFRS?
the change in the liability is recognized in profit or loss
What should an entity do upon initial recognition of asset retirement obligations?
capitalize the asset retirement cost at its undiscounted cash flow value
When a loan is impaired, how should impairment be measured?
It should be measure by the loans observable market price, and by the fair value of the collateral if the loan is collateral dependent
A Discount resulting from the determination of a note payable should be reported on the balance sheet as?
a direct reduction from the face of the note
How do you record a note payable that does not exceed a year?
at the face amount
What is reported as interest expense?
Imputed interest on non-interest bearing note
When do you recognize warranty revenue?
When the machines are sold
How do you record a coupon that has not been redeemed yet?
record it as unearned revenue at the cash received amount.
When are footnote disclosures required for subsequent events
If it did not occur at the balance sheet date and if it was a reasonably possible loss.
When a loss is probable what amount within the range is chosen?
Chose the lower amount.
How are gain contingencies accounted for?
They are usually not reflected in the accounts because they do not want to cause recognition of revenue prior to realization.
A derivative designated as a FV hedge must be ….
specifically identified to the hedged asset, liability, and unrecognized firm commitment, and expected to be highly efficient in offsetting changes in the FV of the hedged item.
Where should FV disclosure of Financial Statement instruments be made?
In the body of the FS or in the footnotes
What type of risks must be disclosed for financial instruments?
Disclosure of concentration of credit risk must be disclosed but disclosure of market risk is encouraged not required.
What are the inherent risk in an interest rate swap?
The risk of exchanging lower interest rate for a higher rate and the risk of nonperformance by the counter party to the agreement
