FAR 1.4 Balance sheet and disclosures overview

Question 1

What is the definition of a classified Balance Sheet?

Answer 1

Distinguishes current and noncurrent assets and liabilities

Question 2

What are the two main classes of Stockholder’s equity?

Answer 2

Contributed capital

And

Earned capital

Question 3

What are the 4 different Financial Statement Notes?

Answer 3

Summary of Significant Accounting Policies

Remaining Notes to the Financial Statement

Related Party Disclosures

Disclosure of Risks and Uncertainties (U.S. GAAP)

Question 4

What is the definition of “Summary of Significant Accounting Policies”?

Answer 4

Description of all significant policies (Integral part of the financial statements).

Question 5

What is IFRS and GAAP required disclosure with regards management decisions during the process of applying accounting policies?

Answer 5

IFRS is required to disclose Significant Estimate and Judgement.

GAAP is required to disclose Significant Estimate

Question 6

What are the 5 things that the “Summary of Significant Accounting Policies” Financial Statement Note should identify and describe?

Answer 6

Measurement bases used in preparing the financial statements

Accounting principles and methods

Criteria

Policies

Pricing

Question 7

What is the definition of “Remaining Notes to the Financial Statement”?

Give two examples…

Answer 7

Facts not presented in either the body of the financial statements or in the “Summary of Significant Accounting Policies.

Examples:
Changes in stockholders’ equity
Contingency losses
Pension plan description

Question 8

Which of the 4 different types of Financial statement Notes is only not required by IFRS?

Answer 8

Disclosure of Risks and Uncertainties (U.S. GAAP)