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FINAL EXAM Flashcards

1
Q

Non-financial non-current assets

A
  • Intangibles
  • Tangibles (Property, plant and equipment)
  • Property investment
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2
Q

Long-term financial investments

A
  • Shares of another company (Equity instruments)
  • Long-term Bonds (Debt securities)
  • Long-term deposits
  • Long-term credits (Loans)
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3
Q

173

A

Non-current payables to suppliers of fixed assets

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4
Q

161

A

Non-current payables to suppliers of fixed assets, related parties

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5
Q

253

A

Non-current loans for disposal of fixed assets

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6
Q

242

A

Non-current loans to related parties

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7
Q

523

A

Current payables to suppliers of fixed assets

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8
Q

511

A

Current payables to suppliers of fixed assets, related parties

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9
Q

543

A

Current loans for disposal of fixed assets

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10
Q

532

A

Current loans to related parties

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11
Q

Initial Valuation: Purchase Price is not Acquisition Price

A

The Acquisition Price includes the purchase Price plus all necessary expenditures to get the asset in place and ready to be used, minus discounts in the invoices

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12
Q

Post-Valuation: Book value

A

It is the initial value minus the correction amounts (accumulated depreciation, accumulated amortization, accumulated impairment)

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13
Q

Systematic losses

A
  • depreciation

- amortization

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14
Q

Potential non-systematic losses

A

Impairment

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15
Q

680

A

Amortization of intangible assets

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16
Q

681

A

Depreciation of property, plant and equipment

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17
Q

Depreciation or Amortization Expense Account

A

It represents the economic impact of depreciation or amortization expense that must be shown in the income statement at the end of the accounting cycle.

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18
Q

Accumulated Depreciation or Amortization Account

A

It represents the financial impact of depreciation or amortization being disclosed on the balance sheet as an asset correction. It stands for the cumulative amount charged year by year, since the initial recognition and measurement of an asset.

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19
Q

280

A

Accumulated Amortization of intangible assets

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20
Q

281

A

Accumulated Depreciation of property, plant and equipmen

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21
Q

For depreciation (tangible assets) or amortization (intangible assets) we need:

A

The asset cost: the acquisition Price

The estimated useful life: period over which an asset is expected to be utilized.

The estimated residual value: estimated amount less estimated disposal costs (disposal of the asset at the end of its expected life).

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22
Q

Methods for calculating depreciation/amortization, generally accepted according to IFRS

A

Straight-line

Accelerated depreciation

Usage-based (technical and functional)

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23
Q

STRAIGHT-LINE

A

The depreciation/amortization expense is the same in each period, implying that the contribution to revenue generation by the asset is the same each period.

24
Q

ACCELERATED DEPRECIATION

A

The depreciation is more allocated to expense in the early years of life and less in the later years.

It is appropriate for assets sensitive to obsolescence, like computers.

25
USAGE-BASED (Technical and functional)
When the asset’s consumption is readily associated with its use and not to the passage of time or obsolescence. The annual depreciation expense depends on the degree of use of the asset. Units of production Kilometers traveled by a vehicle Hours of machinery use
26
IMPAIRMENT
At the end of the accounting cycle, the company must compare the net book value of the non-current asset with its recoverable value. The recoverable amount is the largest one between the net fair value (fair value minus expenses) and the value in use (the current value of the expected cash flows – cash-generating ability)
27
IMPAIRMENT | Two possibilities:
When cost is higher than market value: impairment has to be recorded as a real loss, although it is only estimated; When cost is lower than market value: due to prudence principle the company cannot record the estimated profit.
28
Impairment Expense/Surplus Accounts
It represents an expense in the period of the income statement. It is the estimated loss suffered by assets, recorded when the net book value of it exceeds its recoverable value. ``` (690) Impairment losses on intangible assets (691) Impairment losses in property, plant and equipment (790) Reversal of impairment of intangible assets (791) Reversal of impairment of property, plant and equipment ```
29
Accumulated Impairment Accounts
It represents the asset correction. It corrects the value of an overestimated asset disclosure on the balance sheet. (290) Impairment of intangible assets (291) Impairment of property, plant and equipment
30
690
Impairment losses on intangible assets
31
691
Impairment losses in property, plant and equipment
32
790
Reversal of impairment of intangible assets
33
791
) Reversal of impairment of property, plant and equipment
34
290
Impairment of intangible assets
35
291
Impairment of property, plant and equipment
36
DERECONGITION OF NON-CURRENT ASSETS
Sales of non-current assets Irreversible loss When no future economic benefits are expected from them
37
Financial Instruments
``` A Financial Instrument is a contract that gives rise to a financial asset in one company and, simultaneously, a financial liability or an equity instrument(*) in another company ```
38
Financial assets
- Cash and cash equivalents - Trade and other receivables - Loans and credits extended to third parties, including those relating to the sale of non-current assets - Acquired debt securities of other companies, such as obligations, bonds and promissory notes - Acquired equity instruments of other companies - Other financial assets, such as bank deposits, loans and advances to personnel, guarantees, dividends recievables, etc.
39
Financial liabilities
- Trade and other payables - Debts with financial institutions - Obligations and other securities issued, such as bonds and promissory notes - Payables of special nature - Loans and credits extended by individuals or companies other than financial institutions, including those relating to the purchase of non-current assets, guarantees and payables to third parties
40
Current liabilities accounts
(50-) Current debentures, payables of special nature and similar issuances (51-) Current payables to related parties 52-) Current payables for loans and others 56-) Current guarantees, deposits, prepaid expenses and deferred income
41
Non-current liabilities accounts
(16-) Non-current payables to related parties (17-) Non-current payables for loans, debentures and others (18-) Non-current guarantees, deposits and other liabilities
42
Current assets accounts
(53-) Current investments in related parties (54-) Other current investments 56-) Current guarantees, deposits, prepaid expenses and deferred income
43
Non-current assets accounts
(24-) Non-current investments in related parties (25-) Other non-current investments (26-) Non-current guarantees and deposits extended
44
Group 4
Has assets and liabilities
45
Group 5
Has assets and liabilities
46
Land
Never depriciated (unless mining, farming etc)
47
(4751)
Taxation authorities, withholding tax
48
(5208)
Payables, discounted trade bills
49
(4708)
Grants receivable
50
(4412) (4312)
debt collection
51
(4411) (4311)
discounted note
52
(4410) (4310)
bill of exchange
53
(4415) (4315)
past maturity
54
(4752)
income tax payable
55
(4330)
Trade receivables, group companies
56
(4307)
Trade receivables, foreign currency
57
(4331)
Trade bills receivables, group companies

Accounting (5 decks)

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