Lesson 2 Financial Statements & Revenue Recognition Flashcards
Other Comprehensive Income
DENT 🤓
Derivative Cash Flow Hedge Gain/ Loss
Excess adjustment of PBO and FV of Plan Assets at year end
Net unrealized holding gains (AFS) arising during period
Translation adjustment of foreign currency
Core Revenue Recognition Principle consist of two components.
What are they ?
- Revenue is to be recognized upon the transfer of promised goods and services to customers
- The amount of revenue recognized represents the consideration the entity expects to receive in exchange for those goods and services
Negative book balances in a cash account should appear as?
Current liabilities
Cash Equivalents 💵
Any security that can be easily converted into cash that matures within 90 days from DATE OF PURCHASE
Formula for Bank Reconciliation
Book balance = bank statement + deposits in transit - outstanding checks +/- bank errors b
When a cash account is segregated for the purpose of making bond sinking fund payments. It is referred to as?
Non-current asset
Since sinking fund is non-current
OPO onerous performance obligation
The entity will recognize the loss and a corresponding liability in the earliest period in which it is determined that a loss will be incurred
Where is non controlling interest reported on the balance sheet?
In the stockholders equity section of the balance sheet
Under IFRS financial liabilities are measured at ?
Amortized cost
They may be measured at Fair Value, however when it will result in more relevant information
Objective of financial reporting
Serve the needs of users
Appropriate methods for recognizing expenses?
Cause and effect
Ex: charging inventory to cost of goods sold
Systematic and rational
Ex: depreciation of property and equipment
Immediate recognition
Ex: recognizing salaries expense as it is incurred
Comprehensive income includes
Loss on discontinued operations
Deposits collected from customers to protect against nonpayment should be classified as?
A liability
