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F1 FAR > Income Statement > Flashcards

Income Statement Flashcards

1
Q

Presentation of Income Statement

A

IDA

Income Statement

Income from Cont. Operations
Income from Discontinued Operations

Retained Earnings

Cumulative Effect of Change in Accounting Principle

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2
Q

What is included in Inventory Cost

A

Purchase Price

Freight In

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3
Q

What is included in Selling Expenses

A

Freight Out
Salaries and Commissions
Advertising

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4
Q

What is included in General and Administrative

A

Officer’s Salaries
Accounting
Legal
Insurance

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5
Q

What is included in Non-operating

A

Auxiliary Activities
Interest Expense

Not Core Business

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6
Q

What are the components of an entity under US GAAP

A 
Operating Segment
Reportable Segment
Reporting Unit 
Subsidiary
Asset Group
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7
Q

What are the components of an entity under IFRS

A

major line of business

subsidiary

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8
Q

What are exit and disposal costs

A

Involuntary employee termination benefits
Cost to terminate contract that is not a capital lease
Costs to consolidate facilities and relocate employees

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9
Q

Held for sale items are recorded at

A

Lower of carrying amount or fair value less cost to sell

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10
Q

Accounting Changes Classifications

A

Changes in estimate ( prospective )
Changes in principle ( retrospective )
Changes in entity ( Restate )

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11
Q

Events Resulting in Estimate Changes

A 
Changes in Lives of Fixed assets 
ADJ to YE accrual of officers salaries
write downs of obsolete inventory
material nonrecurring IRS adjustments 
settlement of litigation 
inseparable from change in estimate
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12
Q

Accounting Estimate

A

Prospective Application
• Going-­‐Forward adjustment
• Ex: Straight Line to DDB Depreciation

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13
Q

Change in Accounting Principle

A 
Retrospective Application
     • Prior Periods adjusted
     • Retained Earnings adjusted
     • Completed Contract to % Completion
            • Ex: LIFO to FIFO
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14
Q

direct effects of Change in ACC principle

A

adj that would be necessary to restate FS of prior periods

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15
Q

Changes in ACC Entity

A

Restate to reflect information for new entity ( if comparable FS are presented)

Retrospective Application
• Prior periods adjusted
• Included in footnotes
• Ex: Change to Consolidated Statements

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16
Q

Error Correction

A
  • Prior Periods adjusted
  • Beginning balances of earliest period adjusted
  • Included in footnotes
    • Ex: Non-­‐GAAP to GAAP
17
Q

Comprehensive Income

A

PUFER

Net Income
+ Other Comprehensive Income

Comprehensive Income

18
Q

Items in Comprehensive Income

A 
Pension Adjustments
Unrealized gains and losses of available for sale securities
Foreign currency items
Effective portion of cash flow hedges
Revaluation Surplus ( IFRS only )
19
Q

Items included in Revaluation Surplus

A

intangible and fixed assets

20
Q

Reclassification of Comprehensive Income

A

Move to AOCI just like R/E to avoid 2x counting

F1 FAR (6 decks)

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