FAR 1A7 Notes Flashcards
(13 cards)
What disclosures are required when an asset is tested for impairment or measured at fair value?
📍 Nature, quality, and location of the asset
💵 Future expected cash flows
🔗 Relation to other financial statement line items
📑 Significant contractual, statutory, regulatory, or judicial restrictions
📉 Required under ASC 360 (impairment) and ASC 820 (fair value); also applies in ASC 805 (business combinations) and held-for-sale reclassification
What additional disclosures are required for assets and liabilities from financial instruments or other contracts?
📌 Contractual or legal terms (timing of receipts and disbursements)
📌 Degree of credit or nonperformance risk
📌 Potential effects of inability to pay or perform
📌 Methods used to determine cash flows
What additional disclosures may be required beyond financial instruments?
✅ Equity instrument terms or conditions
✅ Potential effects of changing accounting methods
✅ Breakdown of aggregated line items
✅ Alternative measurements
✅ Relationship of a line item to other financial statement items
What pension-related information must be disclosed?
✅ Components of net periodic pension cost
✅ Amount of net prior service costs/credit in AOCI
✅ Best estimate of contributions expected for the next fiscal year
What amounts in accumulated other comprehensive income (AOCI) must be disclosed for pensions?
✅ Amounts not yet recognized as components of net periodic benefit cost
✅ Breakdown of:
Net gain or loss
Net prior service cost or credit
Net transition asset or obligation
What disclosures must be made for past events or current conditions that may impact future financial statements?
⚠️ Includes events that have not yet been incorporated into the financial statements
📌 Existing or potential litigation
📌 Suspected/known regulatory, judicial, or contract violations
📌 Unrecognized existing commitments expected to be recognized in the future
📌 Events with significant uncertainty leading to non-recognition
📌 Subsequent events
What are the key constraints or limitations on disclosure information?
⚠️ Relevance of information
⚠️ Cost constraints of preparing disclosures
⚠️ Potential adverse consequences of disclosure
⚠️ Future-oriented information (estimates, assumptions, and management’s strategies)
What types of disclosures should be separately reported in the financial statements?
✅ Related party disclosures
✅ Disaggregated legal information
✅ Segment information
✅ Nature of primary activities
✅ Special restrictions on operations
✅ Unique regulatory or legal factors not readily available to users
How should a transaction that is unusual in nature or infrequent in occurrence be reported?
✅ As part of continuing operations prior to income tax expense
❌ Not net of tax
What disclosures are already covered under separate accounting standards?
📌 Segment reporting
📌 Related party disclosures
📌 Nature of primary activities
📌 Regulatory/legal factors affecting comparability
What cash equivalent information must an entity disclose?
✅ Its policy for determining which items are treated as cash equivalents
When must a company disclose vulnerability to concentrations in the financial statement notes?
When all three conditions exist:
1️⃣ The concentration exists at the financial statement date
2️⃣ It makes the entity vulnerable to near-term severe impact
3️⃣ It is at least reasonably possible that the severe impact will occur
How should gain contingencies be treated in financial reporting?
❌ They should NOT be accrued in the accounts
✅ Adequate disclosure should be made in the notes
