Financial statement analysis

Question 1

Balance sheet Held to maturity securities

Answer 1

Amortized cost on balance sheet using effective interest rate method, unrealized Gains or losses not documented, realized gains/losses -> income statement. Cash flows on specified dates, business model to hold asset to maturity

Question 2

Balance sheet available for sale securities

Answer 2

Business model is to collect cash flows, and sell the asset. realized gain/loss - I.S. unrealized G/L -> O.C.I Debt only for US GAAP. IFRS equity only if irrevocable election to list all unrealized G/L through O.C.I.

Question 3

Balance sheet - trading assets

Answer 3

Trading assets under us GAAP, Realized g/l -> I.S.
Unrealized g/l -> I.s>

Question 4

internally generated intangibles

Answer 4

IFRS - research expensed, development can be capitalized once certain criteria is met (I.E. feasibility, profitability proven)
GAAP - R&D costs both expensed.

Question 5

Internally generated intangibles recognized on balance sheet when

Answer 5

Probability of future economic benefit, cost can be measured reliably.