Personal F/S, Segments, & Interim Reporting

Question 0

What is the Asset and Liability Valuation for Personal Financial Statements?

Answer 0

Reported at estimated current value

Question 1

Which 2 Statements are required for Personal Financial Statements?

Answer 1

Statement of Financial Condition

Statement of Changes in Net Worth

Question 2

How are estimated taxes that would be paid if all assets were converted into cash and all liabilities were paid be presented for Personal Financial Statements?

Answer 2

Presented on Statement of FInancial Condition between Liabilities and Net Worth

Question 3

How is Life Insurance shown for PFS?

Answer 3

Only show Cash Surrender Value net of any loans against the policy

Question 4

What is the presentation for Personal Financial Statements?

Answer 4

Assets
-Liabilities
-Estimated Taxes on Assets Sold
= Net Worth

Question 5

How should business interests that constitute a large percentage of total assets be shown for PFS?

Answer 5

Should be separated from other investments

Question 6

Interim Reporting F/S and accounting principles

Answer 6

Short-term F/S for periods <1 year

Same accounting principles used for annual reporting purposes should be applied to interim periods

Question 7

Interim Reporting Discrete & Integral Views

Answer 7

Discrete -
Interim period is a separate accounting period
Not GAAP
Integral -
Interim period is part of the annual period
GAAP

Question 8

Interim reporting rules that differ from normal GAAP

Answer 8

Gross Profit Method may be used to estimate COGS and Ending Inventory
Temporary declines in Inventory aren’t recognized

Question 9

How are Discontinued Ops and Extraordinary Items presented for Interim Reporting

Answer 9

Aren’t prorated
Fully recognized in Interim Period as incurred
If it occurs in Q3, it’s recognized in Q3

Question 10

Cumulative Gains and Losses for Inteirm Reporting

Answer 10

Reported as if they occurred in the first quarter

Question 11

Inventory Valuation for Interim Reporting

Answer 11

If inventory experiences a decline in value during an interim period, the loss is recognized in the interim period
- If the loss is expected to be only temporary, no loss is recognized

Question 12

Problems with Interim Reporting

Answer 12

The matching principle gets messed up - expenses incurred in one period may benefit future periods

Question 13

Segment Reporting requirements

Answer 13

Required by publicly traded companies

Question 14

Test of Significance for a Segment

Answer 14

(Must meet one of these requirements)

1. Revenue of segment is 10% or more of total
2. Profit is 10% of more of total
3. Segment assets are 10% or more of total
4. 75% Test
   - All segment revenues must equal 75% of total external revenues

Question 15

Segment Reporting Disclosure requirement

Answer 15

If 10% or more of enterprise revenue comes from one customer, the segment making the sales must be disclosed