Financial Statements Flashcards
Statement of Financial Condition & Statement of Changes in Net Worth
Personal Financial Statements
Estimated current value
Personal Financial Statements
Presented on Statement of Financial Condition between Liabilities and Net Worth
Personal Financial Statements
Assets
- Liabilities
- Estimated taxes on assets sold
: Net Worth
Personal Financial Statements
Only shown if there is cash surrender value
It is shown net of loans against the policy
Personal Financial Statements
Business Interests that constitute a large percentage of total assets should be separated from other investments
Personal Financial Statements
Interim period is a separate accounting period - not GAAP
Same accounting principles used for annual reporting should be used.
Personal Financial Statements
Interim period is a part of the annual period - GAAP
Gross profit method may be used to estimate COGS and inventory
Temporary declines in inventory aren’t recognized
Interim Financial Statements
Aren’t prorated
Fully recognized in Interim Period as incurred
If it occurs in Q3 - it’s recognized in Q3
Interim Financial Statements
Reported as if they occurred in the first quarter
Interim Financial Statements
If inventory experiences a decline in value during an interim period - the loss is recognized in the interim period
If the loss is expected to be only temporary - no loss is recognized
Interim Financial Statements
The matching principle gets messed up - Expenses incurred in one period may benefit future periods
Interim Financial Statements
Publicly traded companies
Segment Reporting
Revenue of segment is 10% or more of total
Profit is 10% or more of total
Segment assets are 10% or more of total
75% Test - All segment revenues must equal 75% of total external revenues
Segment Reporting
If 10% or more of enterprise revenue comes from one customer - the segment making the sales must be disclosed
Segment Reporting
