Misc Flashcards
Journal entry for increase in available for sale securities Fair value (using valuation account)
Debit to Valuation Account; credit to Unrealized gain
Bond is re-classified as trading security from held-to-maturity
reported on BS:
fair value, current asset
Bond re-classified as a trading security from held-to-maturity
impact on Financial Statements from G/L:
Income statement, as CY earnings
stock purchased during the year, with unrealized gains by YE
Reported on Balance sheet
fair value, current asset
stock purchased during year, with Unrealized gains by YE
Impact on F/S from G/L:
income statement, as CY earnings
reclassified stock as Held to Maturity
report on BS:
ineligible- an equity security cannot be re-classified as held-to-maturity, only applies to debt
debenture re-classified as held to maturity from AFS
reported on BS:
fair value, non-current asset
debenture re-classified as held to maturity from AFS
impact on F/S from G/L:
amortized G/L moved from OCI to IS
stock reclassified as trading security from AFS
reported on BS:
fair value current asset
stock reclassified to trading security from AFS
impact on F/S:
income statement, as CY earnings
debenture reclassified as AFS from held-to-maturity
reported on BS:
fair value, non-current asset
debenture reclassified as AFS from held-to-maturity:
impact on F/S from G/L:
unrealized G/L goes to OCI
bond purchased at par, near fiscal YE
reported on BS:
amortized cost, non-current asset
stock purchased at beginning of year
reported on BS:
fair value, non-current asset
stock purchased at beginning of year
impact on financial statements from G/L:
unrealized G/L goes to OCI
COGS for consignment sales
BI+Purch+Freight-in+Transportation to cosignees - EI (held by owner) - EI (held by cosignees
material overstatement in ending inventory means current assets is: and gross profit is:
CA: Overstated
GP: Overstated
Unreailzed holding loss from AFS securities would:
cause earnings to differ from comprehensive income
dollar value LIFO
- Current year / index = base
- base x index = result
Do for year one, then for year two, calculate the difference in base layer from year 2 to year 1? add to result
under IFRS, a change in accounting principle made in current period, the cumulative effect adjustment for change is shown as an adjustment to beg RE as of:
beginning of the prior period
if a transaction lacks commercial substance, and boot is involved
gain recognized proportionally if less than 25% of total consideration recieved. (proportion is calculated by FV boot/FV consideration)
Disclosure requirements of identified concentrations:
the concentration exists at the financial statement date
- the concentrationmakes the entity vulnerable to the risk of near term severe impact
- Reasonably possible that event that could cause severe impact will occur in the near term
FICA taxes- only include
employer portion in payroll
warranty costs should be recognized/expensed when:
the product is sold
under accrual accounting, how is warranty expense calculated
sales for the year x % estimated
disclosed? concentration of credit risk for financial instrutments
yes
disclosed? market risk for financial instruments
no
disclosed? fair value for financial instruments
yes
disclosed? carrying value for financial instruments
yes
gains and losses from changes in the fair value of a derivative designated as fair value hedge should be:
recognized in current net income in the period in which the fair value of the derivative changes
how should effective and ineffective portions of change in value of derivative which qualifies as a cash flow hedge be reported in F/S
effective portion: other comprehensive income
ineffective portion: current income
gain in value of fair value hedge
reported on income statement (effective portion)
gain in value of cash flow hedge
not reported on income statement
first IFS financial statements must include
- three balance sheets
- two statements of comprehensive income
- two income statements (if usisg two-statement approach to presenting comprehensive income)
- two cash flow statements
- two statements of changes in equity
- explicit statement regarding compliance with IFRS
impairment loss under IFRS
difference between the carrying value and recoverable amount.
recoverable amount = greater of FV-costs to sell or PV future cash flows
recording impairment loss after gain under IFRS
Under IFRS, if a revalued asset becomes impaired, the impairment is recorded by first reducing any revaluation surplus to zero, with further impairment losses reported on the income statement.
in a sale leaseback transaction under IFRS a gain resulting from the sale should be deferred at the time of the sale-leaseback and amortized when:
lease is classified as a finance lease or lease is classified as an operating lease and the sales price is above fair value
goodwill impairment test under IFRS
carrying value of CGU is compared to CGU’s recoverable amount.
Recoverable amount = greater of the FV less costs to sell or PV future cash flows
what effect does a 70% owned sub declaring and paying a dividend have on RE and NCI balances in parent’s cons. BS
No effect on RE
Decrease in NCI
IFRS partial goodwill
goodwill= acquisition cost- FV net assets acquired
a company issued a bond with a stated rate of interest less than effective interest rate on the date of issuance. The bond was issued on one of the interest payment dates. What should the company report on the first interest payment date?
an interest expense that is greater than the cash payment made to bondholders
when the effective interest method of amortization is used for bonds issued at a premium, the amount of interest payable for an interest period is calculated by multiplying the
face value of the bonds at the beginning of the period by the contractual interest rate
gain on bond retirement
bonds at fv + unamortized bond premium = CV of bonds to be retired
Less: Cash paid = gain on bond retirement
warranty expense
current deferred tax asset
depreciation
noncurrent deferred tax liability
