Interim Financial Reporting

Question 1

When are interim FS issued?

Answer 1

In between annual reports (ex. the 10-Q)

Question 2

Interim statements (are/are not) audited?

Answer 2

Are not

Question 3

Certain methods used for interim that are not allowed for annual. (Such as use of the gross profit method to calculate inventory) TF

Answer 3

True

Question 4

A “discrete view” of the interim financial reports views each report as an integral part of the annual report. TF

Answer 4

False, discrete views are stand alone reports

Question 5

All revenues are recognized on the same basis as the annual reports. TF

Answer 5

True

Question 6

COGS is may be recognized on a basis other than the basis used in the annual report. TF

Answer 6

False

Question 7

Exceptions to interim COGS reporting include:

Answer 7

1. Gross profit method may be used to estimate ending COGS
2. LIFO liquidation layer should be charged to COGS
3. Temporary declines in inventory market value not recognized, permanent yes
4. Planned mfg variances should be deferred if expected to be absorbed by year end

Question 8

General expenses are reported using the same basis as the annual reports. TF

Answer 8

True

Question 9

Income taxes and Discontinued Ops have no allowed exceptions to in regards to interim reporting. TF

Answer 9

True

Question 10

Income taxes are reported using the_____ ______ ______ tax rate.

Answer 10

Gradual annual effective

Question 11

Gains and losses on disposal of equipment are to be allocated to more than one period (integral view). TF

Answer 11

False, discretely presented

Question 12

Extraordinary gains are always to be discretely presented. TF

Answer 12

True, and recognized in the quarter they occur

Question 13

Expenses which clearly benefit more than one interim period may be allocated among periods benefitted (including property taxes). TF

Answer 13

True

Question 14

Overall, interim financial reporting should be viewed primarily as a discrete presentation. TF

Answer 14

False, intergral

Question 15

When determining allocation of expenditures and taxes it is important to remember which concept?

Answer 15

The period in which the benefit was used, is the period measured in comparison to the whole. (3 months, 6 months, 9 months, etc.)

Question 16

Write downs of inventory, and inventory recoveries are recorded in the interim periods in which they occur. TF

Answer 16

True

Question 17

LCM is _____ for interim reporting in the decline is expected to be recovered by year end.

Answer 17

Suspended

Question 18

Treatment for accounting principle changes and error corrections:

Answer 18

Retrospective approach, RE beg bal adjustment, restate previous periods within annual presentation

Question 19

IFRS interim reports are based on an integral view while US reports are based on the discrete view. TF

Answer 19

False, IFRS discrete, GAAP integral. (key) IFRS is in general more restrictive in regards to allocative matters because of this.

Question 20

IFRS cannot defer cost variances if recovery is expected. TF

Answer 20

True, not at all

Question 21

IFRS does not mandate interim financial reporting. TF

Answer 21

True

Question 22

Foreign tax rates and capital gains are taken into consideration when estimating the effective tax rate for interim reporting. TF

Answer 22

True

Question 23

Permanent inventory losses are allocated amongst quarters. TF

Answer 23

False, recognized in full in the quarter in which they occur