Module 20 Flashcards
Where is Interim Reporting Codified in the AsC?
Topic 270
What is the discrete View of Interm Reporting?
That each interim period is a separate accounting period and must stand on its own. Same principles and procedures as for annual reports
What is the Integral View of Interm Reporting?
That each interm period is an integral part of an annual report. Expections must be made. Special accruals, deferrals and allocations used.
What is the allowed exception for accounting for COGS for interm reports?
Gross Profit method may be used to estimage CGS and ending inventory, AND Tempory declines in inventory market value, need not be recognized.
What is the formula to determine income taxes for a quarter?
(YTD Income * Estimated annual effective tax rate) - Prior Period Expense.
How do you treat discontinued operations for interm financial statements?
You recognize them in the period incurred.
What do you do with extraordinary items in interm financial statements?
Recognized as incurred
How do you treat changes in accounting principles?
You retrospectively apply them
What rate is used as the tax rate for interm reporting
The estimated annual effective tax rate.
Is interm reporting required under IFERS?
No.
What is the requirement if your issue interm reports under IFRS?
Your must present each statement: The statement of financial position. The statement of Comprehensive Income. The statement of changes in equity. The statement of Cash flows.
Where is Segment Reporting Codified in the ASC?
Topic 280
T/F Segment Reporting is primarily Disclosure based?
TRUE
Is Segment Reporting required for non SEC Registrants?
No.
What is an Operating Segment?
It is a Profit center that 1) earns revenues and incurs expenses. 2) CEO who review operating results for resource allocation. 3) Financial information is already available.
What does the 10% test try to determine?
IF the Operating Segment is big enough to worry about.
What is the 10% Test?
10% or more of: 1) Combined Revenue, or 2) the greater of absolute value of combined profit/loss, or 3) Combined Assets.
What is the 75 % Test?
Segments your report must cover 75% or more of your consolidated sales
When is aggregating allowed?
When 1) to do so would be consistent with the standard. And 2) the segments have similar economic characteristics. And 3a)Before performing the 10% test the segments are ALL similar (See similar Defintion) or 3b) After performing the 10% test the don’t meet any of the tests, but are similar in a majority of ways. (See Similar Definitio)
Similar Definition?
The Segments are similar in 1) Nature of Products and Servies. 2) Nature of the production process. 3) Methods used to distribute products or provide services. 4) Nature of regulatory environment. And 4) Type of customer
What do you report for each reportable operating segment?
Revenues, Expenses, Profits, Assets, Unusual and extraordinary items.
Under IFRS when is an operating segment a reportable segment?
Basically the same
What are the authoritative prononcements regarding partnership accounting?
There is no official liturature for partnership accounting
Assets contributed to a partnership are recorded at what value?
They are recorded at fair market value
Liabilities assumed by a partnership are recorded at what value?
They are recorded at present values
What is the effect of salaries on a partner’s capital account?
Salaries increase the capital account.
What is a partnership dissolution?
An occurance when a change in owndership occurs, (Removal of old partner, addition of a new partner)
When a dissolutionment takes place, what is the accounting results?
A new accounting entity results. All assets should be properly stated at the date of dissolutionment. After income has been allocated. All assets/liabilities should be adjusted to their FMV and PV’s
How do you compute new partnership capital under the Bonus Method?
You take the old partnership capital, add the new partner’s asset contribution. Then allocate the new partner % based on that new total. The other partners share according to their % the difference between the contribution and the new partners %.
How do you compute new partnership capital under the goodwill method?
You take the amount contributed/ the partnerships % ownership and compare it to the current capital balance. Any excess is recorded as goodwill and allocated to old partners.
What are the two types of partnership liquidation?
Simple or installment
What is the simple liquidation method for a partnership?
All assets are sold in bulk and all claims are satisfied before a single liquidating distribution is made to the partners.
What is the installment liquidation method for a partnership?
Assets are sold over time and the cash is distributed to partners as it is available.
What are the two methods for foreign currency translation?
Current rate Method and Remeasurement Method
When would you use the Current rate method?
When your local currency unit is not US$ where your inflows and outflows are in another currency.
When would you use the remeasurement method?
When the inflows and outflows are in US$ or where the Local currency has high inflation. (100% over 3 years)
How are Assets and liabilities reported under both methods?
At current rate (or under remeasurement method historical rate for nonmonetary assets/liabilities)
Where is Foreign Currency Translation Gain/loss shown under the current rate method?
in OCI
Where is Foreign Currency Translation Gain/Loss shown under the remeasurement method?
As a component from continuing operations.
How is Owners’ Equity reported under both methods for Foreign currency translation?
They are shown at historcial rates. ( RE is a calculation)
How are revenues and expenses reported under the current rate method?
At Weighted-average rate for the year.
How are revenues and expenses reported under the remeasurement method?
At Weighted-average rate for the year. (Amort and Deprec. Are at historical rates.
For IFRS what is the definition of Functional currency?
Currency of the primary economic envirionment in which the entity operates
For IFRS what is the definition of Foreign Currency?
Currency other than the functional currency
For IFRS what is the presentation currency?
Currency in which the financials statements are presented.
IF the functional currency does not equal the presentaiton currency, how do you report asseta/ liabilties/ equity and equity?
Assets, liabilities - Current Rate at B/S Date. Equity - Historical cost (RE is calculation). Gains/losses - Historical rate (May use wtd-ave)
IF the functional currency does not equal the presentation currency. Where is translation g/l’s reported?
In OCI
IF the functional currency and the presentation currency is the same, how are assets/ liabilities, equity revenues reported?
Assets - Monetary - current rate. Nonmonetary - Historical costs. Equity - Historical rate (RE is calculation). Revenues - Historical rates buy may use wtd ave rate.
IF the functional currency equals the presentation currency where are gains/losses reported?
They are reported proffit and loss for monetary assets and OCI for nonmonetary assets.
