Far 17 Flashcards
What are the 4 parts of the Gov’t entities combined statement of $ flows?
Operating
Non-Capital financing
Capital and related financing
Investing activities
What do capital financing activities include?
acquiring and disposing of capital assets and any related debt
borrowing $ for capital acquisitions and repaying amounts borrowed (including interest)
capital grants, special assessment levied for capital acquisition
What does non capital financing include?
borrowing $ for other than capital expenditures, such as tax anticipation notes
cash receipts from grants or subsidies,
property taxes
operating grants
When amortization and interest expense is not recorded for a premium bond, what is the effect on interest expense and bond carrying value?
Both interest expense and carrying value will be overstated
For troubled debt restructuring what is the equation for real estate to report pretax gain or loss?
Carrying amount of liability liquidated - FV of real estate transferred = Gain or Loss
When reconciling Gov’t funds to net position in the Gov’t wide F/S, what is the ACRONYM?
FUND BALANCE +
+ C - Capital Assets Net of
- A - Accumulated Depreciation
- N - Non-current Liabilities
+ S- Service (internal service fund) Net Position
What is the acronym for the Reconciliation of the change in fund balance in Gov’t fund F/S to the Change in net position for Gov’t activities? CPAS RIDES stand for?
+ Change in Governmental Fund Balance (beg amount)
+ C - Capital outlay
+ P - Principal pmts on debt
- A - Asset Disposals
- S- Source (uses) financing
+ R - Revenue (accrual)
- I - Interest Expense (accrual)
- DE - Depreciation Expense
+ S - Service (internal) net income
= Change in Net position in Gov’t wide F/S
How to solve a city’s measurable but unavailable taxes at end of year 1 when given Financial position and Operating Activity?
Operating Activity: Tax Revenues
Tax Revenue - Gov’t wide F/S - Fund F/S = measurable but unavailable tax amount
What is the J/E to recognize tax revenues on the Gov’t wide F/S that has been previously deferred on Gov’t fund F/S in accordance with modified accrual accounting?
Dr Deferred inflows
Cr Tax Revenue
What is the J/E when reconciling Fund F/S to Gov’t wide F/S for a Capital Acquisition? Modified - Accrual basis Adjustment
Dr Capital Asset
Cr Capital Outlay Expense
Dr Depreciation Expense
Cr Accumulated Depreciation
What is the J/E when reconciling Fund F/S to Gov’t wide F/S for a Leased property that transfers ownership at the end of a lease? Modified - Accrual basis Adjustment
Dr Capital Assets
Cr Capital Outlay expenditures
Dr Other Financing sources
Cr Lease Liability
When selling Equipment and a G or L arises using the Direct method is operating section of cash flow affected?
No, G or L is not recorded in operating section, Investment section would show the actual cash received from selling the asset
How do you measure if convertible bonds are dilutive? What would be an example equation?
7% convertible bonds, issued @ par, Each $1,000 bond convertible into 40 shares. 30% tax rate. With basic EPS = $1.29
If Dilutive: Converted Price Per Share < Basic EPS
Calc: [$1,000 * .07 * (1-.30)] = $49. $49/40shares = $1.225/share
$1.225<$1.29 - So Dilutive
NFP’s statement of $ flows, what are the different parts?
Operating, investing and financing
Non-operating interest bearing notes are reported at what value at the balance sheet date? Ex: Company has a N/P for a contest winner.
At the Present value of future cash flows
Will create a discount on the N/P
what is the calculation for calculating the temporary difference?
DTL or DTA/ Tax Rate = Temp Difference
What type of financial instrument issued by a public company should be recorded as a liability on date of issuance?
C/S that contain an unconditional redemption feature
b/c there is an obligation of a cash outflow in future that Co has NO ability to prevent
How are refundable security deposits treated and recorded? How much of deposit will be recorded as refundable?
Deposit is not revenue upon receipt, costs are only RECOGNIZED AS INCURRED
Full amount
For indirect method of cash flows, what is added and subtracted from Net Income?
When Current Assets decrease and current Liabilities increases these are added back to N.I.
Increases in CA and Decreases in CL are subtracted from N.I.
Loss on sale is added back
Gain on sale is subtracted
Where would a NFP record a contribution that is for the construction of a new building on the cash flow statements?
Restricted Contribution, in financing section
LIFO Perpetual
LIFO Periodic
Use Purchase date leading up to sale
Determine COGS price at end of month
Foreign Currency Translation
Subs Functional currency is its Local currency - reported in OCI
Subs F/S translated to reporting currency
ReMeasurement
If Subs functional currency is not the same as its local currency - Functional currency may be reporting currency or other currency
F/S remeasured into functional currency
Reported on I.S.
Private purpose trust fund
Principal and income Benefits specific individuals, private organizations and other governments
$ held on behalf of state by operation of law
What kind of change occurs when Fair value turns into Equity method due to the more purchases of stock?
When significant influence occurs, no retroactive adjustment is required
Periodic Inventory disidvantage
COGS amount used for Financial reporting purposes includes both the cost of Inventory sold & Inventory shortages
-Determined only by Physical count that happens annually
What affect do stock splits have on past outstanding stock?
Retroactive application, must be adjusted for prior years
What is the J/E for a liquidating Dividend? 80% distribution of earnings & 20% liquidating
Liquidating Dividend affects APIC
Dr R/E 80%
Dr APIC 20%
Cr Cash 100%
What gives Rise to a DTA?
What is the J/E?
Taxable Income > Book Income
Dr Income Tax Expense (Plug)
Dr DTA (multiply temporary difference * future enacted tax rate)
Cr Income Tax Payable (Taxable income * current year tax rate)
What is the J/E for a stock Dividend when Declared?
What is the J/E for income earned closed to R/E at year end?
All Dividends Decrease R/E
Dr R/E
Cr Dividends Payable
Dr Income Summary
Cr R/E
What does the Amortization schedule look like for an Operating Lease?
Date Lease Expense (Straight Line) Interest (% on Liability) Amortization of ROU Asset CV of ROU Asset
(CV of ROU Asset * %)
