FAR Deck #2 Flashcards
What are the Enhancing Qualitative Characteristics?
Compare and Verify in Time to Understand = Comparability, Verifiability, Timeliness, Understandability
How are Stock Splits and Stock Dividends treated when computing EPS?
They are both treated as though that occurred at the beginning of the year. If prior periods are presented, they are retroactively adjusted for those periods.
What is the 10-K filing deadline for Small, Large and Accelerated Filers?
60, 75, 90 days
What is the 10-Q filing deadline for Small, Large and Accelerated Filers?
40 and 45 for small
How is FIFO and LIFO different when using Perpetual vs Periodic?
FIFO has the same ending inventory for Perpetual and Periodic. LIFO has different ending inventories.
What is the JE to record the consolidating eliminating JE in a business acquisition?
(CAR IN BIG)
DR Common Stock
DR APIC
DR RE
CR Investment in subsidiary
CR NCI
DR Adjustment to FV
DR Identifiable Intangibles assets to FV
DR Goodwill
What is the JE to record a business combination that involves Legal Fees?
DR Investment in subsidiary
DR Legal Fees
CR Cash ($ for legal and/or issuance costs)
CR Common Stock
CR APIC (plug)
Transactions in CF Financing Activity?
Non-Current Liabilities and Equity:
Dividends Paid (dividends declared)
Purchase or proceeds of treasury stock
Borrowing of funds
Payment of principle related to bonds/loans
Issuance of bonds, common or preferred stock
Transactions in CF Investing Activity?
Non-Current (LT) Assets
Purchase/Sale of AFS or HTM securities or bonds
Proceeds from sale of equipment
Proceeds from sale of investments
Capital expenditures
Supplemental transactions in a Cash Flow?
Interest Paid
Income Taxes
Non-Cash Transactions (Issuing Stock for assets, Converting bonds to stock, Issuing bonds for assets)
Conversion of debt to equity
Example transactions in CF Operating Activity?
Start with Net Income (adjusted for noncash items and increase/decrease in working capital assets):
+ Depreciation Expense
- Gain on sale of equipment
- Increase in A/R
- Increase in prepaid insurance
+- AP
+ Decrease in Inventory
+ Impairment of GW
- Increase in Trading Securities
- Interest paid
-+ Taxes payable
Stock Options outstanding are increased at which date?
Grant Date
Stock Options outstanding are reduced by which date?
Exercise Date
How are bond issuance costs accounted for?
The costs reduce the cash received from the bond issuance and are deducted from the carrying value of the liability.
What is the absolute value of how the segment’s size test is calculated?
At Least 10%:
1) Combined Revenues (intersegment/unaffiliated customers)
2) Operating income
3) Assets
What is the EPS calculation?
(NI - Preferred dividends)/ WASO
What is the formula to covert Cash Basis Revenue to Accrual Basis Revenue
Cash basis revenue
+Ending AR
-Beginning AR
-Ending unearned revenue (Liability)
+Beginning unearned revenue (Liability)
What is the formula to covert Cash Paid for Purchases to Accrual Basis COGS
Cash paid for purchases
+Ending AP
-Beginning AP
-Ending Inventory
+Beginning Inventory
What is the formula to covert Cash Payments for Operating Expenses to Accrual Basis Operating Expenses
Cash paid for operating expenses
+Ending Accrued Liabilities
-Beginning Accrued Liabilities
-Ending Prepaid Expenses
+Beginning Prepaid Expenses
What is a Form 6-K, 11-K, 20-F and 40-F?
6-K = filed semiannual for foreign private issuers (non-audit f/s)
11-K = annual report of a company’s employee benefit plan(s)
20-F = annual file by non-US registrants registered with SEC
40-F = annual file by Canadian companies registered with SEC
What is a stock right?
A stock right provides an existing shareholder the opportunity to buy additional shares. Price is usually below the stock market price on the date the right is granted. NO JE is made, only memo.
How to calculate the capitalized interest using weighted average costs for construction costs?
Total incurred costs divided by years of project x % interest = avoidable interest
How do you treat In-Process R&D in an acquisition?
Recognize as an intangible asset at FV (do not write-off)
What is included in “Supporting Activities” from NFP’s F/S?
1) Fundraising - maintain donor list
2) Admin Services - Soliciting membership dues
3) Membership Development - Soliciting members, ensuring satisfaction, membership brochures
What are the 3 types of funds in governmental accounting?
Governmental (GRSP) = General, Revenue (special), debt Service, Projects (capital), Permanent Funds
Proprietary (SE) = Internal Service, Enterprise
Fiduciary (CIPPOE) = Custodial, Investment, Private Purpose, Pension & Other Benefits
Property constructed on leased land is depreciated using which life - term of the lease or the life of the property?
Whichever is shorter
What are the steps to reconcile Gov Funds to Gov-wide F/S for I/S?
CPASRIDES:
+ Capital Outlay
+ Principal payments on debt
- Asset disposal adjustment
- Sources (other financing sources-debt proceeds)
+ Revenue (measurable but unavailable)
- Interest expense (accrued)
- Depreciation expense
+ Internal service fund net revenue
What are the steps to reconcile Gov Funds to Gov-wide F/S for B/S?
CANS:
+ Capital assets (existing and current)
- Accumulation depreciation
- Non-current liabilities (+Eliminate/reverse deferred inflows, - Accrued interest payable)
+ Internal service fund net position
What are the 3 characteristics of a Derivative?
1) Underlying (ex. price/exchange rate)
2) No Initial Net Investment
3) Terms require or permit a net settlement
Notional Amt = base amount
Direct Method - Cash paid to suppliers & employers calc & Cash received
COGS
+ Increase in Inventory
- Decrease in Inventory
- Increase in AP
+ Decrease in AP
REVENUE
- Increase in AR
+ Decrease in AR
+ Increase in Unearned
- Decrease in Unearned
Salaries & Wages
- Increase in wages payable
+ Decrease in wages payable
