OCI, Going Concern, Disclosures, Interim Financials, Segment Reporting

Question 1

CI Presentation

Answer 1

Comprehensive income may be shown on the face of a combined “statement of income and comprehensive income” a separate section below net income, or:
In a separate “statement of comprehensive income,” or
As a component of the “statement of changes of owners’ equity” (U.S. GAAP only).
The income tax expense or benefit allocated to components must be disclosed, either on the face of the statement or in notes to the statement.

Question 2

OCI IFRS

Answer 2

The company’s other comprehensive income includes the pension gain, the foreign currency translation loss, the revaluation surplus and the unrealized gain on the available for sale security. The unrealized loss on the trading security and the revaluation loss will be reported in net income, not other comprehensive income.

Question 3

related party disclosures

Answer 3

The only related party transaction that would require disclosure (assuming that all amounts are material to the financial statements) would be the loans to officers since they are outside of the ordinary course of business.
Under IFRS, loans to officers and key management compensation would require disclosure as well.

Question 4

disclosure requirement related to risks and uncertainties

Answer 4

Significant estimates should be disclosed when it is reasonably possible (not probable) that the estimate will change in the near term and that the effect of the change will be material. Immaterial items are not disclosed.

Question 5

The summary of significant accounting policies

Answer 5

includes components such as: measurement bases, accounting principles and methods, criteria, and policies such as basis of consolidation, depreciation methods, revenue recognition, etc.
Concentration of credit risk, Plant asset composition, Pension plan assets and vested benefits will be described in a specific note

Question 6

going concern

Answer 6

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.

Question 7

going concern

Answer 7

Management should consider both qualitative and quantitative factors. These factors include current financial condition, sources of liquidity, obligations due in the next year, and funds necessary to maintain operations. Management should consider obligations due or anticipated in the next year, even if they are not recognized in the financial statements.

Question 8

loss is probable

Answer 8

When the loss is probable and estimable, the expected loss must be recorded in full. This loss becomes such at the end of the fourth quarter. Therefore, the inventory must be valued on the year-end at the lower of cost or market, recognizing the loss at that time.

Question 9

loss is permanent

Answer 9

Permanent declines in inventory market value should be reflected in interim financial statements in the period incurred

Question 10

reportable operating segment

Answer 10

Reported revenue (sales to external customers and intersegment sales) greater than or equal to 10% of combined revenue (internal and external) of all operating segments.
Reported profit/loss greater than or equal to 10% of the greater (absolute value) of:
- Combined profit of all operating segments that did not report a loss.
- Combined reported loss of all operating segments that did report a loss
Assets greater than or equal to 10% of the combined assets of all operating segments.
Should report to COO

Question 11

Operating profit by segments

Answer 11

is based on the measure of profit reported to the “Chief Operating Decision Maker.”
Equity in net income of another company, general corporate expenses, interest, income tax expense, and gains or losses on discontinued operations are all not included in segment profit unless they are included in the determination of segment profit reported to the “Chief Operating Decision Maker.”

Question 12

Revenue is 10% of ALL operating segments

Answer 12

In order to conform to GAAP, financial statements for public business enterprises must report segment information about a company’s major customers if that customer provides 10% or more of the combined revenue, internal and external, of all operating segments.

Question 13

Form 6-K

Form 10-Q

Answer 13

Form 6-K is filed semi-annually by foreign private issuers and contains unaudited financial statements. Form 10-Q, which is filed quarterly by U.S. registered companies, also contains unaudited financial statements. (if no seasonal fluctuations, YE B/S should be included with Quarter End B/S). Must be filed within 40 days for large corporations and 45 days for small corporations after the end of the first three quarters of each fiscal year. It must contain reviews of interim financial information by an independent CPA.

Question 14

Form 10-K

Answer 14

Form 10-K is filed annually by U.S. registered companies and must contain audited financial statements.

Question 15

Form 40-F

Answer 15

Form 40-F is filed annually by specific Canadian companies registered with the SEC and must contain audited financial statements.

Question 16

Form 20-F

Answer 16

Form 20-F is filed annually by non-U.S. registrants registered with the SEC and must contain audited financial statements

Question 17

Regulation S-X

Answer 17

an entity’s audited financial statements filed with the SEC should include balance sheets for the two most recent fiscal years and the statements of income, changes in owners’ equity, and cash flows for the three fiscal years preceding the date of the most recent audited balance sheet.

Question 18

An accelerated filer is an issuer:

Answer 18

With a public float of greater than or equal to $75 million,
Subject to the Securities Exchange Act’s reporting requirements for greater than or equal to 12 months,
That previously filed at least 1 report,
Which is not eligible to file quarterly and annual reports on Forms 10-QSB and 10-KSB.

Question 19

Form 10-K - timeframes

Answer 19

“large accelerated filers” (those with floats over $700 million) = 60 days
“accelerated filers” = 75 days
non-accelerated filers = 90 days

Question 20

Forms 3, 4, and 5

Answer 20

are required to be filed by directors, officers, or beneficial owners of more than 10 percent of a class of equity securities of a registered company. These forms do not contain the registered company’s financial statements because they are not filed by the company, and therefore are not required to present the company’s financial statements in an exhibit prepared using XBRL.

Question 21

Form 8-K

Answer 21

is a form required to be filed by all companies registered with the Securities and Exchange Commission (SEC). The form reports on major corporate events, including corporate asset acquisitions/disposals, accountant changes, financial statement changes, management changes, changes in securities, etc. Quarterly results of operations will be reported using Form 10-Q.

Question 22

Regulation S-X . Regulation S-B. Regulation S-K . Regulation S-T

Answer 22

Regulation S-X sets forth the form and content of and requirements for interim and annual financial statements to be filed with the SEC.
Regulation S-B sets forth the disclosure requirements for small business issuers.
Regulation S-K sets forth non-financial reporting requirements for various SEC filings used by public companies.
Regulation S-T sets forth rules governing electronic filings.