Ninja Notes: Personal Financial Statements, Segments & Interim Reporting; Inventory; Investments Flashcards
What Personal financial statements are required?
> Stmt. of Financial Position
> Stmt. of Changes in Net Worth
What is the presentation of the Stmt. of Financial Condition?
Assets (Liabs.) (Est. Taxes on Assets Sold) --------------------------------------- = Net Worth
How should business interest that constitute a large % of total assets be presented?
They should be separated from other investments.
What are some Interim Reporting rules that differ from GAAP?
> GP method may be used to estimated COGS and EI.
> Temp. declines in inventory aren’t recognized.
Discontinued Operations and Extraordinary Items under interim reporting?
> Aren’t prorated.
> Are fully recognized in Interim Period as incurred
How are cumulative gains and losses handled under Interim reporting?
They are reported as if they occurred in the first quarter.
What are the Tests of Significance for a company under Segment reporting?
> Revenue of segment is 10% of more of total
Profit is 10% or more of total
Segment assets are 10% or more or total
75% Test
- All segments revenues must equal 75% of total external revenues
What are some non-inventoriable costs?
> Sales Commissions
Interests on Liabs. to Vendors
Shipping Expense to Customers
What is the Gross Method for Inventory discounts?
Records discounts only when used.
What is the Net Method for Inventory discounts?
Records discounts whether used or not; unused discounts are allocated to financing expense.
Abnormal inventory costs?
Not included in inventory–includes waste>
Effect of B.Inv. over/understated?
Has no effect on End. Retained earnings.
Effect of E.Inv. being overstated?
COGS are understated and End. RE. are overstated.
Effect of E.Inv. being understated?
COGS are overstated and End. RE. are understated.
FIFO (little cat) under Rising Prices?
> FIFO has the Lowest COGS
> FIFO (cat) sees a mouse… starts Low and is Rising
> If COGS is low, that means EI is High.
FIFO (little cat) under Falling Prices?
> FIFO has the Highest COGS
> FIFO, that silly cat, got High from Catnip and is Falling off the couch.
> If COGS is High, that means EI is low.
What are the 3 variables to finding market value?
> Market Ceiling: NRV (SP - SC)
Market: Replacement cost
Market Floor: NRV - Normal Profit Margin
How are Trading securities unrealized gains and losses recorded?
They go the I/S.
How are AFS securities unrealized gains and losses recorded?
They go to OCI.
What are the effects of AFS securities reclassified as HTM and Trading?
HTM: Unrealized G/L go to SHE.
Trading: Unrealized G/L recognized in current period.
What are the effects of HTM securities reclassified as AFS and Trading?
> AFS: Unrealized G/L go to SHE.
> Trading: Unrealized G/L recognized in current period.
Do HTM securities have unrealized gains and losses?
No.
