Missed Questions Flashcards
Under the acquisition method, how are legal, consulting, registration, and issuance costs recorded
Expense = legal and consulting costs Reduce APIC = registration and issuance costs
At what amount should a loss contingency that is likely to result in a loss be recorded for under US GAAP? IFRS?
GAAP= use minimum in range of estimates estimate IFRS = Use mid point in range of estimates
What are the basic financial statements under governmental accounting standards?
- Government-wide statement of net position
- government-wide statement of activities
- governmental funds balance sheet
- governmental funds statement of revenues, expenditures, and change in fund balances
- proprietary funds statement of net position
- proprietary funds statement of revenues, expenses, and changes in fund net position
- proprietary funds statement of cash flows
- **fiduciary funds statement of net position **
- fiduciary funds statement of changes in fiduciary net position
- notes to financial statements
With respect to the statement of cash flows, what are the differences between GAAP and IFRS?
- bank overdrafts are presented as operating activities for IFRS and financing activities in U.S. GAAP
- interest and dividends received are presented as operating or investing activities for IFRS and only as operating activities in U.S. GAAP, and
- cash flows from extraordinary items are required to be disclosed separately under the categories in U.S. GAAP; IFRS does not use extraordinary items.
What is form S-K?
SEC document which provides instructions for filing the nonfinancial statement forms required under the Securities Act of 1933
What is a foreign currency transaction?
Occurs when a company buys or sells to a foreign company with whom it has no ownership interest and agrees to pay or accept payment in a foreign currency.
What is a foreign currency translation?
The restatement of FSs denominated in the functional currency to the reporting currency.
Note: Before a parent can consolidate with a foreign sub, the sub’s foreign currency FSs must be restated to parent’s reporting currency.
How are gains/losses on nonmonetary exchanges recognized under U.S. GAAP when the exchange has commercial substance? When the exchange lacks commercial substance?
Commercial substance:
FV of asset given up including boot paid
<bv></bv>
gain/loss
Lack commercial substance:
What is the calculation of impairment loss under GAAP and IFRS?
GAAP
- ) Carry amount is compared to sum of undiscounted cash flows
2) If carry amount > undiscounted cash flows, impariment is the difference between the carrying amount and fair value.
IFRS
1) compare carrying value to recoverable amount, impairment is recognized to the extent that the carrying value exceeds the recoverable amount
recoverable amount is the greater of nrv or pv of future cash flows expected
How are impaired long-lived assets to be disposed of by sale that measured?
Lower of fair value, less costs to sell or carrying amount
Non-monetary exchanges
When are gains recognized in a nonmonetary exchange? If any, how is the gain calculated?
If cash flows are not significantly different, the exchange lacks commercial substance. Asset acquired is recorded at the **book value of the asset given up. **The only gain that can be recognized is any boot received from the transaction
If cash flows are significantly different, the exchange has commercial substance and a gain/loss can be recorded on the exchange. Asset acquired is recorded at the fair value** of the assets given up**
What are the two rules concerning capitalization of construction period interest?
- Only capitalize interest on money actually spent, not the total amount borrowed
- The amount of capitalized interest is the lower of:
- Actual interest cost incurred, or
- Computed capitalized interest (avoidable interest)
How are deferred income tax items reported on the balance sheet?
Deferred tax assets and liabilities are into “current” and “noncurrent”amounts
Capital Leases
What are the criteria for a capital lease?
- The lessee transfers ownership of the property to the lessee by the end of the lease term
- The lease contains a bargain purchase option
- The lease term is equal to 75% or more of the estimated economic life of the lease property
- the pv at the beginning of the lease term of the minimum lease payments equals or exceeds 90% of the excess of the fair market value of the leased property at that time
Name the significant difference between fiduciary and proprietary funds with regard to the statement of cash flows.
- Cash flow statement required for proprietary funds (PAPI)
- Cash flow statement not required for fiduciary funds
