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Contract cost that should be capitalized
the cost that would not have been incurred if the contract had not been obtained should be recognized as an asset.
Qualitative Characteristics of Financial Info
Enhance
Relevance:
- predictive value
- confirmatory value
- materiality
& Faithful Representation (Reliance) - complete -free of error - neutral
Enhance
- comparability
- understandability
- timeliness
- Verifiability
Comprehensive income includes all changes in equity during a period except those resulting from owner investments and distributions to owners.
dividends paid to stockholders not in comprehensive income
Disclosure of vulnerability to concentration is required when?
Disclosure of vulnerability to concentration is required if all of the following criteria are met:
The concentration exists as of the financial statement date.
The concentration makes the entity vulnerable to the risk of a near-term severe impact.
It is at least reasonably possible that the events that could cause a severe impact from the vulnerability will occur in the near term.
Although the concentration in question might be in a specific geographic area, other concentrations (e.g., concentrations with respect to a specific customer or a specific supplier) must also be disclosed if the above criteria are met.
The subsequent event evaluation period
For SEC filer: when the financial statement ARE issued
that date is when statements are widely distributed to financial statement users in a form and format that comply with GAAP,
For non-filers: when financial statements ARE AVAILABLE to be issued
financial statements are in a form and format that comply with GAAP and all approvals for issuance have been obtained
depletion
cost ( PP + preparation - salavage) / total production = depletion per unit
depletion for the year = depletion rate * units sold
NOT the unit produced
In this question, the total cost of the mine is the purchase price ($2,000,000) plus the preparation ($500,000), net of the anticipated sales price at the end of its useful life ($100,000). The total cost is thus $2,400,000 ($2,000,000 + $500,000 - $100,000 = $2,400,000). That total cost is divided by the estimated 750,000 tons of coal, for a per unit depletion amount of $3.20. Note that the depletion amount per unit would be the same for every year unless additional expenditures were incurred.
Note that the 15,000 tons produced and sold is irrelevant because the question is asking for the depletion per ton. Often, the questions indicate that a certain number of units is produced and that a different amount is sold and ask about the depreciation expense for the period. In those questions, it is the number of units sold that count.
purchase commitment ( IF market price < committed price)
recognize a loss in IS , disclose in footnotes
Dr. Loss in Purchase commitment
Cr. Liability in purchase commitment
purchase commitment ( IF market price < committed price)
recognize a loss in IS , disclose in footnotes
Dr. Loss in Purchase commitment
Cr. Liability in purchase commitment
Also,
A loss is only recorded under a purchase commitment in which the purchaser is obligated to purchase a fixed number of units.
Like-kind exchange
monetary - commercial substance
Dr. New asset ( FV given up i.e FV old asset + cash given)
Dr. Accumulated depreciation
Cr. Old asset ( CV)
Cr. Gain ( FV old - CV old)
Cr. CashLike-kind exchange
monetary - commercial substance
Dr. New asset ( FV given up i.e FV old asset + cash given)
Dr. Accumulated depreciation
Cr. Old asset ( CV)
Cr. Gain ( FV old - CV old)
Cr. CashLike-kind exchange
non-monetary
For IFRS:
dissimilar asset - G/L recognized
similar asset - no g/l
no boot received
Dr. New (CV + cash given)
Cr. Old ( CV)
Cr. Cash
boot received
boot <25% of the gain
Dr. New ( plug)
Dr. Cash
Cr. Old ( CV)
Cr. gain ( proportion %*gain)
If >25% , treat like monetary exchange for both side
Like-kind exchange
non-monetary
For IFRS:
dissimilar asset - G/L recognized
similar asset - no g/l
no boot received
Dr. New (CV + cash given)
Cr. Old ( CV)
Cr. Cash
boot received
boot <25% of the FV
Dr. New ( plug)
Dr. Cash
Cr. Old ( CV)
Cr. gain ( proportion %*gain)
If >25% , treat like monetary exchange for both side
factoring - without recourse - true sale
with recourse - sale
or pledge
without recourse
Dr. Cash
Dr. Due from
Dr. Loss
Cr. AR
with recourse
is sales if -
transferor gives us control
due from can be estimated
transferor is not required to repurchase
if not then its only pledge - which is shown in footnotes only
future contracts
Any gain or loss on futures contracts not designated as a hedge is recognized in current income.
if asked for year-end loss/gain - compare with the future rates
if asked at for the settlement date - use the spot rate
Gift certificates are treated as deferred revenue
Deferred revenue represents future income collected in advance. When the gift certificates are sold, deferred revenue is increased.
When the certificates are redeemed, the revenue is earned and shown in the income statement. Deferred revenue is decreased.
When the certificates lapse, the company has no further liability and revenue is earned. Deferred revenue is decreased.
discontinued operations recorded in the interim
To adequately capture the impact of discontinued operations, it should be included in net income and disclosed in the interim financial statement notes.
if while getting a business ( paying cash , stock and contingencies )
consideration = cash + common stock + FV of contingencies
patent - successful defense
& unsuccessful defense
if successful - acquisition + buying cost + legal defense cost - all CAPITALIZED
if unsuccessful - acquisition + buying cost + legal defense cost - all will be EXPENSED
Remeasurement and Translation
Remeasurement - Local to Functional
G/L - Income Statement
-> Start with BS monetary - weighted non monetary - historic equity - historic RE is the plug
through RE get the NI
then move to IS
most IS - weighted
anything related to bs ones - historic
G/L - to get to the required NI
………………………..
Translation - Functional - to US currency ( parents)
G/L - OCI
-> Start with IS
All - weighted
get the END RE
BS ALL Asset and liabilities - current PIC -Historic END RE AOCI - Plug
An entity is considered to be a going concern if it is reasonably expected to remain in existence and to be able to settle all its obligations for the foreseeable future. Management is required to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.
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Commercial income statement, statement of financial position, statement of change in equity, statement of cash flow, and the Noted (disclosure) to financial statements.
Not for profit
here are 4 main financial statements for nonprofit organizations. These are the Statement of Financial Position, the Statement of Activities, the Statement of Cash Flows and the Statement of Functional Expenses.
..
Government-wide
Statement of Net position
Statement of Activities
fund financial statement
Balance Sheet
Statement of Revenues, Expenditures,and change in fund balances
Proprietory fund
Statement of net position
statement of revenue, expenses, and change in fund net positions
statement of cash flow
Fiduciary fund
statement of fiduciary net position
statement of changes of fiduciary net position
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