FAR Own Flashcards 9
How do you account for a defined benefit plan in the financial statements?
Disclose employer and employee obligations to contribute to the plan, a brief statement about the plan, and employee eligibility requirements
When does the debt service fund accrue interest?
When the interest is legally due, NOT at interim dates.
What is the primary underlying concept behind the immediate recognition of a contingent loss
CONSERVATISM: the prudent reaction to uncertainty and risks inherent in business situations are adequately considered. The recognition of a contingent loss is the recording of an amount representing uncertainty and risk in a business situation.
What is the IFRS Partial goodwill method?
Goodwill = Acquisition cost - FV of net assets ACQUIRED
How do you treat bond issue costs under IFRS and GAAP?
Under IFRS (and now GAAP), the bond issue costs reduce the cash received from the issuance of the bond and are deducted from the carrying value of the liability. Premium = 25000 bond issue costs = 15000, net premium = 10000
DR: Cash 110,000
CR: Premium 10,000
CR: bond payable: 100,000
How do you calculate the change in net position for governmental activities?
GOES Change in governmental FUND BALANCE Other financing sources Expenditure - Capital outlay (Net of depreciation) Internal Service Fund Net Income =Change in NET POSITION
What is the MAIN focus of government-wide financial statements?
The governments responsibility to report the extent to which they have met their OPERATING objectives efficiently and effectively, using all resources available for that purpose, and the extent to which they can continue to meet their objectives for the future.
What is the minimum a budgetary comparison schedule should show?
The original budget, the final appropriations budget, and actual inflows, outflows, and balances on a budgetary basis. (Variances are optional)
How is interest received classified in the statement of CF’’s for an enterprise fund?
In INVESTING activities for purposes of enterprise funds.
What compromises the CAFR and what parts are required?
Introductory Section, Basic Financial Statements and Required Supplementary Information (including MD&A), and the statistical section. The statistical section of the Comprehensive annual financial report (CAFR) is not considered part of the basic financial statements and is not required.
What does GASB require to be reported for financial statements?
The basic financial statements (government-wide financial statements, fund financial statements, and notes to the financial statements), required supplementary information (including MD&A and supporting schedules)
What is the integrated approach?
The joint presentation of government-wide financial statements and fund financial statements and appropriate reconciliations
What is the modified approach to capitalizing infrastructure?
infrastructure expenditures are reported as expenses except for outlays that result in additions or improvements, which would be capitalized
Where should the budgetary comparison schedule be presented and for what funds?
Budgetary comparison schedules should be presented as required supplementary information or in the basic financial statements for the GENERAL fund and each MAJOR SPECIAL REVENUE FUND that has a legally adopted budget?
Under the modified approach of reporting infrastructure, what must be disclosed?
Describe the assessed condition of the infrastructure, (updated once every three years), and the estimated annual amount to maintain and preserve the condition level established and disclosed.
