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FAR flash card 2

1
Q

Under GAAP, a development-stage enterpise is one in which either

A

Principal operations have not yet commenced or Prinicipal operations have generated an insignificant amount of revenue(or a loss)

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2
Q

A development stage enterpise must issue the same

A

financial statements as any other enterprise

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3
Q

In development stage enterprise, statements should be prepared would disclosures

A
  1. Cumulative net loss in the balance sheet
  2. Cumulative amount from the company’s inception showing revenue and expenses for each period being presented in the income statement
  3. Cumulative amount of cash inflows and outflows in the statement of cash flow
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4
Q

Has not standardized fair value measurement and

disclosure

A

IFRS

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5
Q

Addressed on a topic by topic basis within the IFRS standards

A

Fair Value

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6
Q

Areas that do not permit fair value measurement

A

Shared based compensation, inventory pricing, measurements based on or using vendor-specific objective evidence of fair value, fair value measurements used for lease classification or measurement

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7
Q

Is the price to sell an asset or transfer a liability in an orderly transaction

A

Fair Value

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8
Q

Does not include transaction cost but may include transportation costs

A

Fair Value

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9
Q

Assumes the highest and best use of asset

A

Fair Value

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10
Q

Is one in which the asset or liability is exposed to the market for a period before the measurment date long enough to allow for marketing

A

Orderly Transaction

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11
Q

Cannot be a forced transaction

A

Orderly Transaction

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12
Q

Buyers and sellers who are independent

A

Market Participants

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13
Q

Market with the greatest volume or level of activity for the asset or liability

A

Principal Market

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14
Q

Is the market with the best price for the asset or liability, after considering transaction costs

A

Most Advantageous Market

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15
Q

Fair Value of an asset or liablility can be measured using what valuation technique

A

Market Approach,Incom Approach, Cost Approach or a combinaiton

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16
Q

Identical or comparable assets

A

Market Approach

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17
Q

Convert future amounts, including cash flows or earnings to a single discount

A

Income Approach

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18
Q

Uses current replacment cost

A

Cost Approach

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19
Q

GAAP exemptions to the requirement to measure fair value exist when:

A

Not practicable to measure, cannot be reasonbly determined, cannot be measured with sufficient reliability

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20
Q

Valuation techniques should maximize the use of observable inputs such as

A

Level 1 and Level 2

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21
Q

Valuation techniques should minimize the use of unobservable inputs

A

Level 3

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22
Q

Quoted prices in active markets for identical assets and the most reliable

A

Level 1 Inputs

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23
Q

Level 2 Input Include

A

quoted prices for similar assets or liablitites in active markets, quoted prices for identical or similar assets in market that are not active

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24
Q

Can be directly or indirectly observable for the assets or liablity

A

Level 2 Input

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25
An enterprise is required to disclose segment profit or loss, segment assets, and certain related items but is not required to report segment
cash flow
26
Requires the disclosure of segment liablities if such a measure is regularly provided to the chief operating decision maker
IFRS
27
Do not require the disclosure of segment liablities
GAAP
28
All public enterprise must report information about
Operating segment,products and services, geographic areas, major customers
29
Segment reporting applies to
Public companies only
30
XBRL taxonomies include
XBRL U.S. GAAP Financial Reporting Taxonomy,XBRL IFRS Taxonomy, Global Ledger Taxonomy, Industry Specific Taxonomies, Company Specific Tags
31
Tell computers how to interpret the context of the text
XML and XBRL
32
Tell computers how to display text
HTML
33
Exhibit is required with the filer's SEC registration statements
Quarterly and annual reports, and reports 6-K and 8-K containing revised or updated financial statement
34
An instance document is an XBRL formatted document that contains
tagged data
35
Tagged disclosures must include the
primary financial statements, notes, and financial statement schedules
36
Transactions between the segments of an enterprise are not
Eliminated
37
Reporting is not required under GAAP or IFRS, both provide gudiance to be used when interim information is presented
Interim financial reporting
38
What reporting is generally concerned with the quarterly reports that public companies must file with the SEC
Interiming Reporting
39
GAAP that were used in the most recent annual report of an enterprise should be applied to
Interim financial statements of the current year
40
For interim reporting only, timiliness is emphasized over
Reliablity
41
Allows the effective tax rate to be estimated using enacted or substantially enacted changes in tax rate
IFRS
42
Allows the use of enacted tax rate only
GAAP
43
The estimate of the effective tax rate expected to be applicable for the full fiscal year should reflect all tax planning alternatives including
Foreign tax rates, percentage depletion, capital gains rate, and anticpated investment tax credits
44
Interim financial statements must be viewed as an
integral part of the financial statements.
45
Interim financial statements generally are not audited, each statement presented should be marked
Unaudited
46
GAAP and IFRS require that a desciption of all significant policies be included as an
intergal part of fianancial statements
47
Requires an explicit and unreserved statement of compliance with ______ in the notes to the financial statements
IFRS
48
Chang in accounting principle s/b recognized by adjusting
beginning retained earnings in the earliest period presented
49
Useful in determing profitability, value for investment purposes, and credit worthiness and predicting information aobut future cash flows base on past peformance
Income Statement
50
Does not consider the use of cash flow information and present value in accounting measurements
IASB Framework
51
Includes all differences between beginning equity and ending equity other than transactions with owners
Comprehensive Income
52
what are the two fundamental assumptions outline by IASB Framework
Accural basis accounting and going concern
53
Does not separately consider business and nonbusiness enterprises, but instead provides one framework that applies to all entities
IASB Framework
54
If fair value cannot be determined in the marketplace, the objective must be to obtain an
Estimated of fair value
55
What are the three qualities of reliablity
Neutrality, Respresentation Faithful, Verifiablity
56
FASB determined that when using present value, the objective of estimating the fair value of a liablity must consider other factors such as
Costs to settle, Credit standing of the company
57
Before the joining the board the Board Members must sever connections with
Firms or Institution
58
Has five(5) full time members who serve for five year terms and may be reappointed to one(1) additional five year term
FASB
59
How many member of IASB must approve an Exposure Draft for issuance
9 members
60
The quality of relevance has three sub-categories
Mnemonic (Passing Feel Terrific) 1. Predictive Value 2. Feedback value 3. Timeliness
61
Primary Qualities of Decision Usefulness
Relevance and Reliablity
62
IASB has how many members
12 full time members and 2 part -time members
63
defines the potential users of financial reporting as those who base their decisions on their relationships to and knowledge about the business enterprise.
SFAC No. 1
64
What are the 3 constraints of IASB Framework
1. Timeliness 2. Balance b/w benefit and cost 3. Balance b/w the qualitative characterics
65
Serves as a link b/w the characteristic of users and the decision-specific qualities of information
Understandability
66
Displays other comprehensive income below the income statement and totals them for comprehensive income
Single Statement Approach
67
Single Statement Approach, start with
Revenue
68
Two-statement Approach starts with
Net Income
69
Displays comprehensive income as a separate statement that begins with net income
Two statement Approach
70
Comprehensive income may be displayed as a separate column in the statement of owners' equity, under
GAAP
71
Comprehensive income should not be reported on a
per share basis
72
Prohibits the presentation of comprehensive income in the statement of changes in equity
IFRS

FAR CPA EXAM (19 decks)

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