FAR 2 - M1 NOTES TO FINANCIAL STMTS

Question 1

Significant accounting policies

Answer 1

Revenue recognition policies
How a company determines what investments are cash equivalents
Inventory pricing
Methods for amortizing intangibles
Depreciation methods-GAAP SL

Other
Basis of consolidation
Related party transactions
Credit risk
Contingent liabilities - possible but not both probable and reasonably estimated
Changes to SH equity

Question 2

Disclosure of vulnerability to a concentration

Answer 2

Criteria should be met:

1. Concentration exists as of the FS date
2. Concentration makes the entity vulnerable to the risk of a near term severe impact
3. at least reasonably possible that the events can cause severe impact from the vulnerability will occur in the near term

Question 3

How are investment in bonds reported?

Answer 3

Investments in bonds that are held to maturity s/b at amortized cost, not fair value