Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

accounting > International financial reporting (IESEG) > Flashcards

International financial reporting (IESEG) Flashcards

1
Q

what is an intangible asset

A

none monetary assets without physical substance

eg brands, trade-names, licenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

when to account for an intangible asset

A
  1. during price purchse allocation
  2. intangibles purchased indicidually
  3. internally developed (research and development)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

when is an intangible asset amortised

A

If an intangible asset has a finite life.

Intangible assets with an infinite life are not amortised but they are imparied once a year.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what is amortisation

A

the depreciation of intangible assets.

Amortization of intangible assets is a process by which the cost of such an asset is incrementally expensed or written off over time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what is fair value

A

Fair value is the estimated price at which an asset is bought or sold when both the buyer and seller freely agree on a price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

why may a business choose to use two auditors

A

investor expectation- using multiple auditors as a sign of good governance and a commitment to transparency.

listed firms in france are required to have two auditors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

where can the auditors be found

A

on the statutory auditors report

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what is the remuneration of the statutory auditors and where is it found

A

remuneration refers to the audit fees. (re money)

it is found in the “STATUTORY AUDITORS’ REMUNERATION”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

who is in charge of approving the financial statements of kering

A

Financial management team (CFO)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what is the financial position of a company

A

measure of total assets= total equity and liabilities.

found on the balance sheet
you are in a good position if you are balanced

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

how can trade receivables occur on kerings balance sheet despite only taking cash payments

A

this information should be found in the notes section.

wholesale sales and royalties received from wholesalers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

how to find the total amount of borrowing in a balance sheet.

A

borrowings is listed in the balance sheet

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

where to find the bottom line

A

found in the comprehensive income statement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is the difference between the net income and comprehensive income.

A

Net income includes operating income, non-operating income, interest expenses, taxes, and other one-time gains or losses.

comprehensive income includes items such as unrealized gains or losses on available-for-sale securities, foreign currency translation adjustments, and changes in the value of pension plans.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

when does an operating segment become reportable

A
  1. if the segment operates 10% of revenue/ profit or loss
  2. 75% of the total external revenue must be accounted for.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

why do businesses amortise their intangible assets

A

to reduce their taxable income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what is the yearly amortisation of a patent which lasts 14 years and costs £28,000

A

£2,000. Instead of recording $28,000 once and throwing off your books and taxes, record the amortization expense as $2,000 for 14 years.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what is the amortisation formula

A

lifespan

Intangible assets do not usually have residual value. (value at the end of their lifetime)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what does the comprehensive income measure

A

Comprehensive income is the variation in the value of a company’s net assets from non-owner sources during a specific period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what is unrealised income

A

Unrealized income can be unrealized gains or losses on:
hedge/derivatives
foreign currency transaction
change in equity

An unrealized gain becomes realized once the position is sold for a profit.

This is often found on the comprehensive gains

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what is net income

A

sales minus cost of goods sold, general expenses, taxes, and interest.

this value is found on the bottom of the income statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

pros of the comprehensive income statement.

A

gives investors a more rounded view of the company’s income than the income statement alone

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

cons of the comprehensive income

A

The inclusion of unrealized gains and/or losses can distort the view of a company’s financial health

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

what is the difference between comprehensive income and and net income

A

comprehensive income =

net income + unrealised gains

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
what is fair value
the estimated price at which an asset is bought or sold when both the buyer and seller freely agree on a price.
26
what are distribution to the owners and where can i find this
Distributions are made to business owners by taking cash out of the business from retained profits or cash that investors put into the business. distributions can be found by calculating all the negative amounts in the statement of changes in equity
27
what is a financial instrument
a minority passive investment less than 20% ownership
28
what is an associate
Minority active investments- large influence but no control (generally > 20% but < 50%)
29
what does it mean when the entity is a subsidiary
the entity has controlling interest and usually over 50%
30
how do you account for associate investments.
equity method
31
what is the equity method
the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor's share of the investee's net assets.
32
how to calculate the equity method on the balance sheet (associate investments)
cost of shares + income/percentage share - dividends/percentage = value on balance sheet the share of income is shown on the income statement
33
how to calculate the equity method on the income statement (associate investments)
share of income. + income earned by the investee
34
how do you account for financial instruments
use the fair value method
35
what is the fair value method
The amount for which an asset could be exchanged for, or a liability settled can be calculated by looking at market value
36
what is FVTPL
fair value through profit and loss takes into account changes in value in profit. (short term)
37
what is FVOCI
fair value through other comprehensive income (long term)
38
where should changes in fair value be recorded
other comprehensive income. By looking at the Consolidated Statement of Comprehensive Gains and Losses (p. 3)
39
what is the accounting value
total equity found in the balance sheet
40
what are contributions to the owners and where can i find this
the positive amounts in the statement of the change of equity.
41
how to reconcile end equity
find the equity at the end of the year equity at the start of the year + comprehensive income +contributions - distributions = equity at the end of the year
42
what does it mean to reconcile in accounting
1. Check that the opening balances agree. 2. Record the difference of the closing balances. 3. Mark off all new activity from the external document. ... 4. Review the closing balance and, if necessary, produce a reconciliation report.
43
When is an impairment test used
when the assets lifetime is indefinite. when the carrying amount is greater than the recoverable amount. the person carrying someone is always bigger
44
what is the carrying amount.
It represents the historical cost (gross value) of the asset adjusted for any accumulated depreciation, amortization. Net book value A building purchased at 100,000 and has depreciated by 40,000. The carrying value is 60,000
45
what is the recoverable amount.
recoverable amount is the higher of an asset's fair value less costs to sell (also known as the "fair value less costs of disposal") and its value in use. value in use= future cash flows X Interest^ years Fair value= market value
46
where can i find the discount rate and growth rate
in the impairment tests notes section.
47
what is the impact on value in use of using a higher discount rate
The value in use represents the present value of the future cash flows expected to be derived from an asset or a cash-generating unit. When the discount rate increases, the present value of future cash flows decreases. As a result, the value in use of the asset also decreases because the benefits derived from using the asset are discounted at a higher rate, making them worth less in present terms. | rememberto use powers when calculating future value in use
48
which assets impairment test can't be reversed
goodwill
49
when are impairment tests done on assets with a defined lifetime.
when there is an indicator of a change in value. like a drop in price.
50
where can expenses be found in the financial statements
in the income statements
51
what is a deferred tax asset
A deferred tax asset is an item on a company's balance sheet that reduces its taxable income in the future. Such a line item asset can be found when a business overpays its taxes. This money will eventually be returned to the business in the form of tax relief. Therefore, the overpayment becomes an asset to the company.
52
why do deferred taxes exist
It also may occur simply because of a difference in the time that a company pays its taxes and the time that the tax authority credits it. A balance sheet may reflect a deferred tax asset if a company has prepaid its taxes. Or, the company may have overpaid its taxes. In such cases, the company's books need to reflect taxes paid by the company or money due to it.
53
how to find out total tax paid
found in cash flow
54
what does book value mean
a measure of a business's equity the value of an asset as it appears on a balance sheet it's also the original value of the common stock issued plus retained earnings, minus dividends and stock buybacks.
55
where can i find if a company has associates
balance sheet or income statement (will show gains or losses) If not displayed here we can assume that there are no associates
56
what is percentage of interest
Percentage of interest refers to the ownership stake or percentage of voting rights that one entity holds in another entity. It represents the proportion of equity ownership in the investee company.
57
where can I find if a company has a portfolio of financial instruments at fair value.
find shareholder equity instruments in the comprehensive income statement
58
what are the different accounting methods
?
59
what is the differnce between percentage of control and percentage of interest
The percentage of interest reflects the ownership stake or voting rights in an investee and may or may not confer control. Interest of control represents the power to govern the financial and operating policies of an investee, typically achieved when an investor holds more than 50% of the voting rights, resulting in consolidation of the investee's financial results with those of the investor.
60
what is percentage of control
Interest of control, also known as control or controlling interest, refers to the power to govern the financial and operating policies of another entity in order to obtain benefits from its activities. Control typically exists when one entity, directly or indirectly through subsidiaries, holds more than 50% of the voting rights in another entity, giving it the power to make decisions that significantly influence the investee's financial and operating policies.
61
what is the difference between an operating and a reportable segment
a reportable segment is an operating segment which has Has at least 10% of external and internal sales of all the operating segment Has at least 10% of operating profit/loss of all the operating segments Has at least 10% of total assets of all the operating segments.
62
how to calculate purchase price allocation
you are basically finding goodwill Book value + Fair value adjustment + Brands =X X minus acquisition price = goodwill
63
what is the matching principle when recognising an intangible asset
the recognition of intangible asset allows their depreciation over the period of which economic benefits are derived
64
what is prudence principle when recognising an intangible asset
economic benefits derived are uncertain so the cost should be expensed in the period when incurred
65
how do i calculate carrying amount
cost of asset - depreciation
66
what accounting methods do you use for investments in which we have less than 20% ownership
This is a financial instrument. we account for this by calculating the change in fair value. market value- initial cost. this is recorded in net income or other comprehensive income statement.
67
what accounting methods do you use for investments in which we have between 20%- 50% ownership
this is an associate investment. we use the equity method cost of shares + income/percentage share - dividends/percentage = value on balance sheet
68
what is included in equity on the balance sheet.
retained earnings and common stock
69
how to account for PPA (Good will)
Acquisition cost -Book value =surplus -unrecognised gains goodwill

accounting (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions