FAR Module 20A

Question 0

This personal financial statement presents estimated current values of assets, estimated current amounts of liabilities, estimated income taxes, and net worth at a specified date

Answer 0

Statement of financial condition

Question 1

What are the two types of personal financial statements

Answer 1

Statement of financial condition

statement of changes in net worth

Question 2

This personal financial statement presents main sources of increases or decreases in net worth over the time period included by the statement

Answer 2

Statement of changes in net worth

Question 3

How do you calculate net worth

Answer 3

All assets at estimated current value
less all liabilities at estimated current value
less estimated tax liability
equals net worth

Question 4

Define estimated current value

Answer 4

This is what you would receive or pay today in the event of a liquidation

Question 5

How do you calculate the estimated tax liability

Answer 5

Net assets at estimated current value =
net assets at basis (+/- gain/loss to balance)

Gain/loss * tax rate = estimated tax liability/asset

Question 6

A commitment must have what three attributes to be recorded

Answer 6

The commitment is for a fixed or determinable amount

The commitment is not contingent on others life expectancy’s or occurrence of a particular event

the commitment does not require future performance of service by others

Question 7

Noncancelable personal commitments should be reported how

Answer 7

At their discounted cash flow

Question 8

A business interest that constitutes a large part of an individual’s total assets should be presented in a personal statement of financial condition as …

Answer 8

A single amount equal to the estimated current value of the business interest