Initial Notes Flashcards

1
Q

FED PRIA

A
FASB - statements on financial accounting and reporting
EITF - Emerging issues task force
Derivatives Implementation Group
APB - Accounting Principals Board
Accounting Research Board
Accounting Interpretations 
AICPA
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2
Q

SEC Standards

A

Regulation for Accounting is Emerging - Regulation S-X; Financial Reporting Releases (FRR); Accounting Series Releases (ASR); Interpretive Releases (IR); Staff Accounting Bulletins (SAB); EITF

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3
Q

Enhancing Qualitative Characteristics

A

Comparability - consistency
Verifiability - independent confirmability
Timeliness - quarterly
Understandability - verify the information is understandable
Cost restraint - benefits exceed the cost of doing so.

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4
Q

Fundamental Assumptions of US GAAP

A

Entity Assumption - separate corporation/division is necessary when required;
Going concern assumption - corp does not end at death of key members
Monetary Unit - deal in currency most often associated w/ business operations
Periodicity assumption - yearly/quarterly, etc:
Historical cost principal - cost, not current market value (most assets, not all)
Revenue recognition assumption - earned & realized (been paid)/realizable (accrual, expect to incur);
Matching principal - revenue and expenses
Accrual accounting - recognize revenue/gains when earning process is complete, incur expenses immediately
Full disclosure - completeness, footnotes, explanation
Rule of Conservatism - never overstate assets/revenues or understate liabilities/expenses.

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5
Q

IASB Fundamental Assumptions

A

Going Concern & Accrual Accounting.

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6
Q

IDEA - Order of presentation on Income Statement

A

I - Income from continuing operations, shown before tax (and net eventually), operating income/expenses and income from non-operating (gains and losses, equity)
D -discontinued operations (net of tax)
E - Extraordinary items (NET OF TAX unusual AND infrequent)
A - change in accounting principle, GR, change in retained earnings. (NET OF TAX change only allowed if it more fairly presents I/S)

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7
Q

Multiple-Step Income Statement

A

Reports core business separately from non-operating items.

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8
Q

Single-step Income Statement`

A

Total expenses including tax are lumped together; total revenues less total expenses.

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9
Q

Elements of Discontinued Operations

A

Net of tax - can consist of impairment loss; G/L from actual operations; G/L on disposal included in period in which they occur, not before they are sold.

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10
Q

HELD/Available FOR SALE

A

1- management commits to plan to sell.
2- immediately available to sell
3- actively marketed
4- probable sale and expected to occur w/ in a year (generally)

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11
Q

Available for sale - IFRS

A

Each asset and liability must be tested for impairment; under US GAAP, impairment is tested at the entity level.

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12
Q

Classification as discontinued operations “GEL”

A

G - disposal of major geographic area
E - disposal of major equity method investment
L - disposal of major line of business

Must be strategic shift and/or a major effect on operations

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13
Q

Extraordinary Items on IFRS

A

Not allowed under IFRS

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14
Q

Accounting Changes

A

Changes in accounting estimate - prospective change;
Changes in accounting principle - GR retrospective (GAAP to GAAP, IFRS to IFRS, required and more fairly states) if comparative are not being shown, book to RE prospectively. If comparable, have to restate all prior years;
Changes in accounting entity - restate financials

NOTE - corrections of error are not accounting changes.
changes in accounting principle inseparable from a change in estimate are made PROSPECTIVELY; no restatement of PY

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15
Q

Exceptions to GR on changes in accounting principle

A

Changes to LIFO and change in depreciation. handled prospectively

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16
Q

Comprehensive Income (non owner transactions) - PUFER

A

Pension adjustments
Unrealized gains and losses (AFS Securities)
Foreign currency items (translation adjustments)
Effective portion of cash flow hedged

Revaluation surplus (IFRS only)

17
Q

IFRS - Full goodwill and partial goodwill definition when dealing with non-controlling interest

A

Full goodwill: NCI= FV of sub * NCI percentage

Partial goodwill: NCI= FV of subs net identifiable assets * NCI percentage

18
Q

Acquisition method JE components

A
C -common stock of sub (eliminate) Dr
APIC - addtnl paid in capital (eliminate) Dr
R - R/E of sub (eliminate) Dr
I - Investment in sub (FV purchase) Cr
N - noncontrolling interest (if not 100%) Cr., remember full/partial goodwill method
B - Balance sheet of sub to FV Dr.
I - identifiable intangibles Dr.
G - goodwill or gain (Dr. or Cr.)
19
Q

OWNS - GAAP capital lease criteria

A

O - ownership transfer at end of term
W - written option for bargain purchase
N - 90% of leased property FV
S - 75% of useful life

20
Q

OWESFACS - IFRS

A

O - ownership transfer
W - written bargain purchase option
E - Lease term is major part of economic life of asset
S - PV min lease payments amounts to @ least substantially all of FV
F - G/L from fluctuation in FV of residual accrual to lessee
A - lessee has the ability to continue lease for 2nd period
C - lessee can cancel the lease, lessor’s losses borne by the lessee
S - specialized nature, only lessee can use them w/ out modification

21
Q

LUC - lessor, sales type/ direct financing lease criteria (GAAP)

A

L - lessor “owns” the leased property
U - uncertainties do not exist regarding un-reimbursable costs by the lessor
C - collectability of the lease payments is reasonably predictable.

22
Q

Governmental Funds: GRaSPP

A

G - General Fund (general tax revenue)
R - Special Revenue Fund (specific taxes)
and
S - Debt Service Funds (payment of interest and principal on all general obligation debt)
P - Capital projects funds (assigned for construction/major capital assets)
P - permanent fund (legally restricted for public use)

23
Q

Governmental Funds: MAC GRASPP

A

Modified Accrual Accounting; Current Financial Resource Measurement Function -
G - General Fund (general tax revenue)
R - Special Revenue Fund (specific taxes)
and
S - Debt Service Funds (payment of interest and principal on all general obligation debt)
P - Capital projects funds (assigned for construction/major capital assets)
P - permanent fund (legally restricted for public use)

24
Q

Gov’t. Proprietary Funds: full accrual - treat like customer/not citizen - SE

A

S - Internal Service Funds

E - Enterprise Funds

25
Q

Gov’t. Fiduciary or Trust Funds - PAPI

A

P - pension or other EE trust benefit fund
A - Agency trust fund
P - Private purpose trust funds
I - investment trust fund

26
Q

Gov’t. Fiduciary or Trust Funds - PAPI (ACE)

A

P - pension or other EE trust benefit fund
A - Agency trust fund
P - Private purpose trust funds
I - investment trust fund
Accrual accounting; Carry fixed assets and LTD; Economic resources measurement focus.

27
Q

Governmental Funds: MAC GRASPP

A

Modified Accrual Accounting; Current Financial Resource Measurement Function -
G - General Fund (general tax revenue)
R - Special Revenue Fund (specific taxes)
and
S - Debt Service Funds (payment of interest and principal on all general obligation debt)
P - Capital projects funds (assigned for construction/major capital assets)
P - permanent fund (legally restricted for public use)
No fixed assets, no non-current liabilities are reported

28
Q

Gov’t. Fiduciary or Trust Funds - PAPI (ACE)

A

P - pension or other EE trust benefit fund
A - Agency trust fund
P - Private purpose trust funds
I - investment trust fund
Full Accrual accounting; Carry fixed assets and LTD; Economic resources measurement focus.

29
Q

BAE - BAE

A

Book the budget
Book Activity
Book encumbrances

Close the budget
Close Activity
Close Encumbrances

30
Q

BAE - BAE

A

Book the budget
Book Activity
Book encumbrances

Close the budget
Close Activity
Close Encumbrances

Close to the Balance Sheet and amounts roll forward to the next year

31
Q

BAE - BAE, used with which Gov’t funds?

A

GRaSPP funds

Book the budget
Book Activity
Book encumbrances

Close the budget for same amount as booked
Close Activity for same amount as booked
Close Encumbrances for same amount as booked

Close to the Balance Sheet and amounts roll forward to the next year

32
Q

Functional program, organizational unit, activity

A

Public safety - police & fire - drug enforcement/traffic/etc.