FAR Flashcards
Who is the source of authoritative nongovernmental U.S. GAAP?
FASB codification
What is the goal of the PCC?
To establish alternatives for U.S. GAAP to make private company financial statements more relevant, less complex, and cost-beneficial
Can you apply the Conceptual Framework to specific accounting issues for IFRS or U.S. GAAP?
IFRS
What do the users of the financial statements use the information for?
To assess the reporting entity’s prospects for future net cash inflows to the entity (estimate the entity’s value)
Information that is capable of making a difference in the decisions made by users
Relevance (Passing confirms money)
Information that is complete, neutral, and free from error is what?
Faithful Representation (Reliable)
Compare and verify in time to understand
Enhancing Qualitative Characteristics
What is the only fundamental assumption that the IASB Framework outlines?
Going concern
Increases in assets from transfers of cash, property, or services from owners are what?
Investments by Owners
Estimate of future cash flow, expectations about timing variances, time value of money, price for bearing uncertainty, liquidity issues are all what?
Elements of present value measurement
What financial statement is useful in determining profitability, value for investment purposes and credit worthiness?
Income Statement
Presentation order of the major components of an income and retained earnings statement:
I(Gross and net of tax) DEA(net of tax)
change from one acceptable method of accounting to another (GAAP to GAAP)=
Change in Accounting Principle
Part of an entity(lowest level) for which operations and cash flows can be clearly distinguished=
Component of an entity
Operations are classified as discontinued if:
Disposed of or classified as held for sale
Disposals are discontinued operations if the disposal represent a strategic shift that has or will have on an entity’s operations and financial results, what are examples of this?
Disposal of a major geographical area, equity method investment, line of business
Types of Items Included in Results of Discontinued Operations:
Results of operations of the component, gain or loss on the disposal of the component, impairment loss of the component
A component classified as what is measured at the lower of its carrying amount or fair value less costs to sell?
Held for sale
Future operating losses expected to be incurred as part of an exit or disposal activity are recognized in what period?
The period incurred
Transactions or events that are material, and unusual and infrequent are what?
Extraordinary Items (Expropriation of a plant by the government, prohibition of a product line by a newly enacted law or regulation)
Items that are not extraordinary are presented where?
Separate component of continuing operations (shown gross or before tax)
Are there extraordinary items in IFRS?
NO
Are changes in accounting estimate prospective or retrospective?
Prospective
Are changes in accounting principles prospective or retrospective?
Retrospective
If change in accounting estimate affects several future periods, they should be what?
Disclosed in the notes to the FS
Changes in accounting principle should be recognized by adjusting beginning retained earnings in the _____ period presented?
Earliest
Change in inventory cost flow assumption to LIFO is an accounting change that is handled ______
prospectively
Change in depreciation method is handled _______
prospectively
Are changes in accounting entity prospective or retrospective? (ONLY GAAP)
retrospective
Comprehensive Income (Non-owner transactions)=
PUFE R(IFRS ONLY)
Income from continuing operations, discontinued operations and extraordinary items are included in what?
Net income
Should comprehensive income be reported on a per share basis?
NO
What account is other comprehensive income closed to?
Accumulated Other Comprehensive Income
Required disclosures for OCI include:
Tax effects of each component, changes in accumulated balances, total AOCI in the balance sheet as an item of equity, reclassification adjustments
U.S. GAAP requires disclosures of significant estimates, but not ______, IFRS requires both
judgments
If an estimate is reasonably possible and material, it should be what?
Disclosed
Is interim financial reporting required under U.S. GAAP or IFRS?
NO (but required by SEC for public company)
What is the objective of segment reporting?
To provide information on the business activities and the economic environment of a company to help users of the financial statements make better decisions
Required disclosures for all public enterprises include what:
operating segments, products and services, geographic areas, major customers
Segment is reportable if: It is __ percent of reported revenue, assets, or profit or loss, and to meet the at least ___ percent of external (consolidated) revenue requirement
10, 75
Business activities and operating segments that are not reportable should be combined and disclosed in what category?
“All other segments”
Segment Profit or Loss Formula:
Revenues
Less: Directly traceable costs
Less: Reasonably allocated costs
=Operating Profit (or loss) for that Segment
Form 20-F must be filed when and by whom?
Annually by foreign private issuers
What regulation sets forth the form and content and requirements for interim and annual financial statements to be filed with the SEC?
Regulation S-X
What form is required to be filed semi-annually by foreign private issuers?
Form 6-K
Audited financial statements must include BS for the ____ most recent fiscal years and IS/CF for each of the ____ most recent years
2, 3
SEC Interactive Data Rule=
Required GAAP and IFRS to present financial statements in an exhibit prepared using XBRL
What are the four criteria for revenue recognition under GAAP?
Persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, price is fixed and determinable, collection is reasonably assured
Franchisor should report revenue from initial franchise fees when all conditions of the sale have been _____ ______
“Substantially performed”
What costs associated with intangibles that are specifically identifiable can be capitalized?
Legal fees and other costs related to a SUCCESSFUL defense of the asset, registration or consulting fees, design costs, direct costs to secure the asset
The cost of internally intangible assets not acquired from others should be expensed, what are examples of this?
Trademarks, goodwill from advertising, cost of developing, maintaining, or restoring goodwill
A patent is amortized over the _____ of its estimated life or remaining legal life
Shorter
What should happen if the intangible asset becomes worthless during the year?
Write off the entire remaining cost to expense
Intangible assets that have a finite life should be what?
Amortized over useful economic life (Two Step Test for U.S. GAAP)
Under IFRS, a revaluation loss that reverses a previously recognized revaluation gain is recognized in ____
OCI
Under IFRS, a revaluation gain is reported on the ____ _____ to the extent that they reverse a previously recognized revaluation loss
Income Statement
Initial franchise fees are recognized as a ____ _____ and _____
intangible asset, amortized
Continuing franchise fees are what?
Expensed as incurred
Start up costs and organizational expenses are what?
Expensed immediately
Goodwill is what?
Impaired
Under GAAP, what are the only R & D costs that can be capitalized?
materials, equipment, or facilities that have alternate future uses, R & D costs of any nature undertaken on behalf of others under a contractual arrangement
For computer software developed to be sold, leased or licensed, what is the point where costs can be capitalized?
AFTER technological feasibility (upon completion of detailed program design or completion of a working model)
Amortization of capitalized software costs is the greater of:
Percentage of revenue or straight line
Computer software developed for internal use only is amortized over what?
Straight line basis
For intangible assets with finite lives, what is the two step impairment test?
Determine the impairment-use undiscounted future net cash flows
Amount of impairment-use Fair Value (Discounted cash flow)
For intangible assets with indefinite lives, what is the only step used? (Also only step used for IFRS)
Amount of Impairment -use FV (Discounted cash flow)
Where is an impairment loss reported in the income statement?
Income from continuing operations
Under GAAP, for a private company, how is goodwill accounting for?
Amortized on a straight line basis over 10 years
Excess of costs over billing is reflected in the balance sheet as what?
Current asset
Excess of accumulated billings over related costs should be reflected as what?
Current liability
Is the completed contract method under IFRS permitted?
NO
Under the percentage of completion method, any previous gross profit or loss reported in prior years must be adjusted for when calculating what?
Total estimated loss
When may the cost recovery method be used?
When receivables are collected over an extended period and there is no reasonable basis for estimating their collectibility
Under cost recovery method, cash collections are first applied to the recovery of product costs, what are collections after costs have been recovered recognized as?
Profit
Commercial substance=
Future cash flows will significantly change
Exchanges that have commercial substance and exchanges of dissimilar assets=
Gain/loss recognized
For exchanges lacking commercial substance (fair value cannot be determined or no change in cash flows), losses are what?
Always recognized
If no boot is received=
No gain
If boot is paid=
No gain
If boot is received =
Recognize proportional gain if less than 25%
If boot is 25% or more of total consideration=
Entire gain recognized
Historic Cost and Current Cost=
Appreciation
Nominal dollars and Constant dollars=
Inflation
Monetary assets and Purchasing Power Gains=
During a period of deflation
Monetary assets and Purchasing Power Losses=
During a period of inflation
Monetary liabilities and Purchasing Power Gains=
During a period of inflation
Monetary liabilities and Purchasing Power Losses=
During a period of deflation
Foreign Currency Translation=
Functional
Foreign Currency Remeasurement=
Dysfunctional
Remeasurement Method=
Balance Sheet to Income Statement, Income Statement Plug (Gain/Loss)
Translation Method=
Income Statement to Balance Sheet, Balance Sheet Plug
Where is the translation adjustment plugged to?
OCI
Is a statement of cash flows required for OCBOA presentation?
NO
In personal financial statements, what are the assets and liabilities value at?
Fair Value
When recording the acquisition of a sub using parent common stock, the FV at what date is used?
The date the transaction closes
Finder’s fees and legal fees are capitalized under _____ _____, but are expensed under _____ _____
equity method, acquisition method
Noncontrolling interest must be reported at fair value in what section of the consolidated BS?
Equity section (Separate from Parent’s)
Intangible assets that have an indefinite life should be what?
Impaired (One Step Impairment Test)
FV of Net Assets=
Assets-Liabilities
Trading and available for sale securities must be reported after what?
Fair value
Unrealized holding gains and losses on trading securities are included in what?
Earnings (Income Statement)
Unrealized holding gains and losses on available for sale securities are reported in what?
OCI
Held to maturity securities are valued at what?
Amortized cost
The sale of a security from any category results in a realized gain or loss ad is reported in what?
Income Statement
If a REALIZED loss is considered permanent, what does this result in?
Write down to fair value and included in Income Statement
Under GAAP, significant transactions during the gap period require what?
disclosure
Under IFRS, the significant transactions for the subsidiary during the gap period require what?
Adjustment
No significant Influence (
Cost Method
Significant Influence but 50% or Less Ownership=
Equity Method
Greater than 50% ownership and control=
Consolidate
Under the cost method, the portion of the dividends received this year that were not in excess of the investor’s share of investee’s undistributed earnings since the date of investment, should be reported where?
Investor’s income statement
Under the cost method, the cost basis investment account is reduced if:
Shares of stock are sold, cumulative dividends exceed cumulative earnings (a return of capital), or the subsidiary incurs losses that substantially reduced net worth.
When changing from the cost method to equity method, the investment and retained earnings accounts are adjusted how?
Retrospectively
For an additional investment made, the new method (equity) should be apply to what percentage?
Prior period
Under the ____ method, receipt of a dividend is recorded as income and does not affect the investment account.
cost
Louis, Inc. acquired 40% of the outstanding non-voting preferred stock of Rich Co. What method for recording the investment should Louis use?
Cost method
Finder’s fee or legal fee are what?
Expensed
Stock registration and issuance costs such as filing fees are a direct reduction of the value of the stock issued, the parent should what?
Debit APIC account
The consolidated income statement will include 100% of the subsidiary’s revenue and expenses when?
After the date of acquisition
In process research and development should be what?
Carried as an asset/amortized if project success/ impair if project failure
Stockholders Equity=
Common Stock + APIC +Retained Earnings +NCI (If applicable)
Consolidated retained earnings/ net income are the same as the parent company’s, when financial statements are consolidated under the what method?
Acquisition
Use parent’s ___ when consolidating, and the Subs ___
BV, FV
FV of subsidiary × % acquired =
Purchase Price
Do you eliminate intercompany accounting is you do not consolidate?
NO
Are dividends paid by sub eliminated in consolidation?
YES
When a company owns less than 50% of the common stock of an investee corporation, Receivables and payables to the investee are reported where?
Separately on the balance sheet
Sales and cost of goods sold should be reduced by ______ sales
intercompany
Are sales to outside parties eliminated?
NO
Equity method is appropriate if the parent owns between what percentages?
20%-50%
Dividend income that is on noncumulative preferred stock is accounted for using what method and on what FS?
Cost method, Income Statement
Any goodwill created in an investment accounted for under the equity method is what?
Ignored
Noncontrolling interest is only adjusted if the bonds were originally issued by the subsidiary and, as a result, a portion of the gain must be allocated to what?
Noncontrolling interest
Trading securities, both debt and equity, are to be reported at fair value at the end of the ______ reporting period.
current
25% Markup over Cost=
Cost *1.25=Sales
Under the _____ method, dividends received reduce the investment account, but do not affect the income.
equity
Current assets-current liabilities=
Working capital (measures solvency)
Short-term obligations expected to be refinanced on a long-term basis may be classified as noncurrent in IFRS or GAAP?
GAAP
deposits held as compensating balances that are not legally restricted are a what?
cash equivalent
Adjusted book balance=
True balance (Report on Balance Sheet)
_______ of accounts receivable account is the balance adjusted for allowance for receivables that may be uncollectible, sales discounts, and sales returns and allowances
NRV
What is the GAAP method used for estimating uncollectible accounts receivable?
Allowance Method
Percentage of Sales=
Income Statement Approach (Emphasizes Matching)
Percentage of Accounts Receivable at Year End=
Balance Sheet Approach (Ending Balance #)
Aging of Receivables Method=
Balance Sheet Approach (Ending Balance #)
What account is used to adjust the balance in the allowance for uncollectible accounts, if needed?
Bad Debt Expense
Pledging requires what?
Note Disclosure
If a sale with recourse is not considered a sale, the transfer is treated as what?
Loan (Pledges as collateral and requires a footnote)
Notes receivable are presented at what?
PV of Future Cash Flow
Notes Receivable that have been discounted with recourse are reported on the ___ with the corresponding contra account
BS
Do expected exchanges affect net sales or inventory or cost of sales?
NO
When a company _____ receivables in return for a loan, the assigning company will retain title to the receivables and will use the proceeds collected from the receivables to repay the loan
pledges
Should the consignor or consignee include the consigned goods in its inventory?
Consignor
Selling price-costs of disposal=
Net Realizable Value-What precious metals and ag products are measured at
Write down of inventory to market is usually reflected in what? Unless the amount is material, it should be identified in where?
Cost of goods sold, Income Statement
IFRS requires inventory to be reported at what?
Lower of cost or net realizable value
Who allows the reversal of inventory write downs for subsequent recoveries of inventory value?
IFRS
Market Ceiling=
NRV (Selling price-costs)
Market Floor=
NRV - Profit Margin(Normal Profit)
The LIFO method is prohibited under IFRS or GAAP?
IFRS
High Profit and Ending Inventory=
FIFO
Low Profit and Ending Inventory=
LIFO
Ending inventory at current year cost/Ending inventory at base year cost=
Price Index
Sales * (1-Gross Margin)=
COGS
Under IFRS, assets are valued how?
Cost or revaluation
If repairs or improvements increase asset life, they should what?
Reduce Accumulated Depreciation
If repairs or improvements increase asset usefulness, they should what?
Capitalize
Are land improvements depreciable?
YES
Only capitalize interest on money actually spent, not on the total amount ______
borrowed
Amount of capitalized interest is the lower of:
Actual interest cost incurred or computed capitalized interest/avoidable interest
Borrowed funds not used should be what?
Expensed
Borrowed funds and excess expenditures during construction are what?
Capitalized
Borrowed funds and excess expenditures after construction are what?
Expensed
Depletion base=
Cost-residual value
Unit Depletion=
Depletion base/Estimated recoverable units
Where is the impairment loss reported?
Income from continuing operations before tax
Under U.S. GAAP, restorations of carrying value for long-lived assets are permitted if an asset’s fair value increases subsequent to recording an impairment loss for what?
Held for disposal
negative balance (overdraft) in the bank accounts should be reported on the balance sheet as what?
Current liability
All interest incurred for machinery held for sale should be what?
Expensed
If borrowings are not tied specifically to the construction of an asset, what rate for the other borrowings of the company should be used?
Weighted average interest rate
Under IFRS, the impairment loss is recognized as the difference between the carrying value and what?
Recoverable amount (greater of the fair value of the assets less cost to sell and the asset’s value in use (otherwise known as the present value of future cash flows)
The amount to be capitalized for a capital lease is the present value of what?
Minimum lease payments
The lessee should begin the recognition of rental expenses for the new office in the month the company enters into the _____ _____ as rent expense is recorded over the lease term.
lease agreement
The appropriate accounting treatment for a lease bonus to the lessor in an operating lease is that the bonus is originally recorded as deferred revenue and then amortized into income over the life of what?
The lease
Stockholders’ equity is increased by the value of what?
Warrants
When the stated rate of interest is less than the effective interest rate when the bond is issued, this bond is issued at a what?
Discount
Bonds that mature in installments are what?
Serial bonds
When the effective interest method of amortization is used for bonds issued at a premium, the amount of interest payable for an interest period is calculated by multiplying the:
Face value of the bonds at the beginning of the period by the contractual interest rate
Under ____, all costs associated with the issuance of bonds should be capitalized and amortized over the outstanding term of the bonds since issue
GAAP
Future amount × Present value factor=
Present Value
The two profits for a sales-type lease are what?
Gain on sale and interest income
The profit for a direct financing lease is what?
Interest income
The lessee records the lease as an asset and a liability at the lesser of what?
FV of asset at inception of lease or cost(PV of minimum lease payments)
For the O and W, the asset is depreciated over what?
Asset life
For the N and S, the asset is depreciated over what?
Lease life
If the PV of the rent payments is equal to or greater than 90% of the FV, all the gain should be?
Deferred
If the PV of the rent payments is 10% to 90% of the fair value of the property, the gain is what?
Deferred up to the PV of the payments
If the PV of the rent payments is 10% or less of FV of property, the gain is what?
Recognized all now (no deferred gain)
Any deferred gain or loss is amortized in proportion to the amortization of the leased asset in what?
Capital leaseback
Any deferred gain or loss is amortized in proportion to the gross rental expense over the life of the lease in what?
Operating leaseback
For a sales type lease, profit=
present value of payments-carrying cost
In a sale-leaseback transaction accounted for under IFRS, a gain resulting from the sale should be deferred at the time of the sale-leaseback and subsequently amortized when:
lease is classified as a finance lease, or the lease is classified as an operating lease and the sales price is above fair value
When a discount on a bond or note is amortized, the discount amortization increases what for the period?
Interest expense
If interest rate issued is higher than market rate=
Premium
If interest rate issued is lower than market rate=
Discount
How are bond issue costs treated?
Recorded as a deferred charge (asset) and amortized from the date of issuance of the bonds into expense using the straight-line method
Is use of the effective interest method of accounting for amortization of discounts/premiums required by both GAAP and IFRS?
YES
Under US GAAP, the issuance price is allocated to the bonds with no recognition of the conversion feature for what?
Convertible bonds (often issued at more than Face Value)
Common stock at market value-common stock at par value=
APIC
Under the ____ method, stock issued is valued at the book value of the bonds being converted, there is NO gain or loss recognized
Book value
What kind of loss occurs when the sales price is less than the fair value?
Artificial loss
A “cash deposit received from a customer” for future services is a _____ until the “sale” takes place
liability
Beginning of period PBO*Discount Rate=
Interest Cost
Beginning unrecognized prior service cost/Average remaining service life=
Amortization of prior service cost
Where is the difference between actual and expected return recognized?
Other comprehensive income
Fair value of plan assets-PBO=
Funded status-Reported in B/S
Pension plan assets are always characterized as what?
Noncurrent
Under _____, past service cost is recognized on the income statement in the period of the plan amendment
IFRS
Changes in tax laws or rates are recognized in the period of change (change in estimate) and are reported where?
Income from continuing operations
For deferred taxes: Ending balance-current balance=
Required adjustment
Under IFRS, deferred tax assets and deferred tax liabilities are reported as what on the B/S?
Noncurrent
Temporary taxable differences added to taxable income are what?
Deferred tax liabilities
Temporary taxable differences subtracted from taxable income are what?
Deferred tax assets
Total Shareholders Equity
- Preferred Stock Outstanding
- Cumulative preferred dividends in arrears=
Common Shareholder’s Equity
What is the purpose of a quasi-reorganization?
To restate overvalued assets to their lower FV and to eliminate a Retained Earnings deficit
Treasury stock (Transactions with owners) gains and losses are not reported on what F/S?
Income Statement
Under the cost method, when is the Gain/Loss calculated?
Upon reissue
Under the par value method, when is the gain/loss calculated?
Upon buyback
Is there a journal entry on the date of record of dividends?
NO
When do liquidating dividends occur?
When dividends to shareholders exceed retained earnings
A small stock dividend reduces retained earnings by what?
FMV of stock
A large stock dividend reduces retaining earnings by what?
Par Value of Stock
Is there a journal entry for stock splits?
NO
Noncompensatory Stock Options Journal Entry is recorded when?
Stock is purchased
Compensatory stock options and stock purchase plans are valued at what?
Fair Value of options issued
Compensation is recognized over what?
Service Period (Vesting Period)
The date of declaration is the date the board of directors formally approves a divided. A liability is created (dividends payable), and retained earnings is what?
Reduced
Is there a journal entry made when the rights are issued since no consideration is given?
NO
Are stock dividends recorded as income on the books of the recipient?
NO
A property dividend should be recorded in retained earnings at the property’s ____ _____ at date of declaration
market value
Dividends become a liability on the books of the issuing company on the date the dividend is what?
Declared
Net Income-Preferred Dividends/WACSO=
Basic EPS
An entity has a complex structure when it has securities that can be converted to common stock and would therefore do what to EPS?
Reduce (Dilute)
Average Market Price>Exercise Price=
Dilutive
_________Preferred stock is not considered in computing EPS
Noncumulative
In computing the weighted-average number of shares outstanding during the year, which of the following midyear events must be treated as if it had occurred at the beginning of the year?
Declaration and Distribution of Stock Dividend
Interest on Dilutive Securities should be added back to calculate what?
Diluted EPS
Dividends Received are in what section of the cash flow statement?
Operating
Dividends Paid are in what section of the cash flow statement?
Financing
Is the purchase of a Treasury Bill included on the cash flow statement?-Sale of Treasury Stock is included in Financing
NO
______ activities include acquisitions and sales of long-term assets or investment assets
Investing
The primary purpose of a statement of cash flows is to provide relevant information about:
The cash receipts and cash disbursements of an enterprise during a period
Principal payments under capital lease obligation are included in what section of the cash flow statement?
Financing
Sale of property, plant and equipment is included in what section of the cash flow statement?
Investing
Which of the governmental funds have an economic measurement focus?
Proprietary and Fiduciary
The modified accrual basis of accounting recognizes revenues in the accounting period in which they are what?
Available and Measurable
Which of the following is the paramount objective of financial reporting by state and local governments?
Accountability
What is the only fund with a positive unassigned fund balance?
General Fund
Measurable and Available means the collection period does not exceed ___ days after fiscal year-end
60
Property taxes and fines represent which of the following classes of non-exchange transactions for governmental units?
Imposed non-exchanged revenues
What is the major difference between an exchange transaction and a non-exchange transaction for governmental units?
The relationship between the amount of value given and received
Which fund is expendable trust activity accounted for in?
Special revenue
Monitoring of a grant is in what fund?
Special Revenue Fund
Non-monitoring of a grant is in what fund?
Agency trust fund
The debt service fund pays off the debt in what funds?
GRaSPP funds
In what two funds are the encumbrances account not used?
Debt Service and Permanent Funds
When the governmental unit is not liable for special assessments, what fund are they accounted in?
Agency Fund
Principal and Interest are available for public spending in what fund?
Special Revenue
Only interest is available for public spending in what fund?
Permanent Fund
______ funds are used to account for principal that is restricted and may not be expended
Permanent
Which funds are excluded from the government wide financial statements?
Fiduciary
Statement of cash flows is required for what funds?
Internal Service Fund and Enterprise Fund
If grants are restricted for a specific purpose, it is accounted for in what fund?
Special revenue
Net position will include classifications for investment in capital assets net of related debts, amounts restricted by external sources and unrestricted components. Internal designations are classified as what?
Unrestricted
Internal board designated funds are considered what?
Unrestricted
______ (estimated expenditures) in excess of actual expenditures would increase the unassigned fund balance
Appropriations
difference between the amount contributed (transferred) and the fair value of purchases given in the exchange=
contribution revenue
What are the three financial statements Not for Profit Organizations are required to report?
Statement of Financial Position
Statement of Activities
Statement of Cash Flows
Funds that account for assets that have been internally designated by the institution for a specific purpose
Quasi-endowment funds
Revenues from tuition and fees are reported at the _____ amount
gross
What section of the cash flow statement for proprietary funds would operating transfers out be included in?
Noncapital financing activities
What are the three types of program revenue?
Charges for Services, Operating Grants and Contributions, Capital Grants and Contributions
The MD&A is required what?
Supplementary Information
What are the three basic financial statements for governments?
Government-wide FS, Fund FS, Notes to FS
What are the three types of revenue for health-care organizations?
Patient Service Revenue, Other Operating Revenue, Nonoperating Revenue (donated services)
Statement of Functional Expenses is mandatory for whom?
Statement of Functional Expenses
Debt service fund resources that are subject to the terms and conditions of a bond indenture would be classified as what?
Restricted
Price that would be received to sell an asset or paid to transfer a liability (exit price):
Fair Value
Identical assets or liabilities that the reporting entity has access to on the measurement date:
Level 1 Input (Most reliable)
Inputs other than level 1 that are directly or indirectly observable for the asset or liability (similar):
Level 2 Input
Unobservable inputs for the asset or liability (discounted cash flows):
Level 3 Input
A change in the valuation technique used to measure fair value is a change in what?
Accounting estimate
Under bonus method, bonus is credited to the existing partners when the new partner pays ____ than NBV
More
Under bonus method, bonus is credited to the new partner when the new partner pays ____ than NBV
Less
Creditors, including partners who are creditors, must be paid before _____ partners receive any payments in a liquidation
Noncreditor
Beginning ARO × Risk-adjusted rate=
Accretion Expense
The discount resulting from the determination of a note payable’s present value should be reported on the balance sheet as a:
Direct reduction from the face amount of the note
When are warranty costs recognized?
When they are probable and estimable
The contingent liability for a discounted note receivable is the what?
Maturity value (should be disclosed)
An increase in both expenses and liabilities would result because the contingency is what?
Probable and can be reasonably estimated
The use of a derivative to offset anticipated losses or to reduce earnings volatility:
Hedging
In a put option, if the purchase price is
Gain since Price went down
Where is a fair value hedge gain/loss on hedged item recognized?
Income Statement
Where is the ineffective portion of a cash flow hedge reported?
Income Statement
Where is the effective portion of a cash flow hedge recognized?
OCI and then Income Statement later
Where is a foreign currency net investment hedge reported?
OCI
Fair value disclosure of financial instruments may be made where?
Body of FS and Footnotes to the FS
Must both the carrying value (amount) and fair value be disclosed for most financial instruments?
YES
Options, Futures, Forwards and Swaps are all examples of what?
Derivative Financial Instrument
A contract that has its settlement value tied to an underlying notional amount=
Derivative Financial Instrument
Under U.S. GAAP, reversal of impairment losses is only permitted for what kind of assets?
Held for Sale
Under U.S. GAAP, Statement of Shareholders Equity may be presented where?
Primary FS or in Notes to FS
Interest/Dividends received classification (IFRS):
CFO or CFI
Interest/Dividends paid classification (IFRS):
CFO or CFF
Taxes Paid classification (IFRS):
CFO, CFI, CFF
