Income Statement Flashcards
Formula for impairment losses
Fair value - cost to sell < book value
Discontinue ops is made up of
Impairment loss, gain or loss on date of sale , gain or loss on sale
Where do you describe discontinued ops
Noted
Criteria for held to sale (PABPW)
Plan , Available, Buyer, Probable, Within a year
Selling expenses
Sales salary & commissions, advertising, freight out
G & A expense
Officer salary, accounting & legal, insurance
Strategic shift (LEG)
Line of business, equity significant influence, geographic area
Income state does what
Judges performance over time
3 parts to income statement
Operating, non operating, discontinued operations
Operating section is
Main line of business, revenues & expenses
Non operating is
Unusual and infrequent (ex. PPE)
Gains and lossses
If increase in exchange rate
Receivable - gain / payable loss
If decrease in exchange rate
Receivable- loss, payable- gain
If a domestic currency weakens
More dollars are required to buy one unit of foreign currency
If domestic currency strengthens
Fewer usd are required to buy a unit of domestic currency
