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FAR Formulas > Rev Rec, Inventory, PP&E, Financial Instruments, Bonds > Flashcards

Rev Rec, Inventory, PP&E, Financial Instruments, Bonds Flashcards

1
Q

Percentage of Completion

A 
Step 1:
Contract Price
-Estimated Total Cost
=Gross Profit
Step 2:
Total Cost to Date / Total Estimated Cost of Contract
Step 3:
Step 1 x Step 2
Step 4:
PTD at current FYE

Current year-to-date GP

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2
Q

Comprehensive Income

A

Net Income + Other Comprehensive Income

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3
Q

Most Advantageseous Market

A

Price - Transaction Cost (higher of)

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4
Q

Segment Profit (or Loss) Defined

A

Revenues
- directly traceable costs : Internal, external
- reasonably allocated costs: by management
Gets to Operating profit (or loss) “EBIT”

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5
Q

10 percent “Size” Test

A

Revenue: 10% or more of combined Revenue
P&L: Absolute amount of the segment’s P;L is 10% or more of the combined profits and losses of all operating segments
Assets: 10% or more of combined assets of all operating segments

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6
Q

75 Percent “Reporting Sufficiency” Test

A

75% of total external (consolidated) revenue reported by operating segments needs to be included in reportable section

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7
Q

Converting Cash Basis Revenue to Accrual Basis Revenue

A 
Cash Basis Revenue
\+Ending AR
- Beginning AR
- Ending Unearned Revenue
\+Beginning Unearned Revenue
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8
Q

Converting Cash Paid (Basis) for Purchases to COGS Accrual Basis

A 
Cash Paid for Purchases
\+Ending AP
- Beginning AP
- Ending Inventory
\+Beginning Inventory
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9
Q

Converting Cash Paid (Basis) for Operating Expenses to Accrual Basis Operating Expenses

A 
Cash paid for operating expenses
\+Ending Accrued liabilities
- Beginning accrued liabilities
- Ending prepaid expenses
\+Beginning prepaid expenses
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10
Q

Accounts Receivable End Balance

A

Beginning Balance
+Credit Sales
- Write Offs, $ Collected, Convert to Note receivable

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11
Q

COGS Calcualtion

A

Beginning Inventory
+Purchases = CGAFS
-Ending Inventory (physical count)

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12
Q

Net Realizable Value

A

“Market Ceiling”

Net Selling Price - Costs to Complete

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13
Q

Market Value

A

Middle Value

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14
Q

Market Floor

A

NRV - Profit Margin

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15
Q

Weighted Average Method & Moving Average

A

Total cost of inventory available / total units of inventory available
*for moving average, do this after each purchase

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16
Q

Dollar Value LIFO, Price Index

A

Ending Inventory at Current year cost / Ending inventory at Base year cost

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17
Q

Gross Profit Method

A

Sales 100% then Gross Profit and COGS will make that up that total sales percentage

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18
Q

Cost Basis “Model” Carrying Value

A

Historical Cost - Accumulated Depreciation - Impairment

*Both IFRS and US

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19
Q

Revaluation Model Carrying Value

A

*IFRS only
*The “R” in OCI
Fair Value at Revaluation Date - Subsequent Accumulated Depreciation - Subsequent Impairment

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20
Q

Straight Line Depreciation

A

Cost - Salvage Value (Depreciable Base) / Estimated Useful Life

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21
Q

Sum of Years Digits Depreciation

A

(Cost - Salvage Value) x Remaining Life of Asset / Sum of yers digits
OR
N x (N+1) / 2 *where N = Estimated useful life

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22
Q

Units of Production Depreciation

A

Step 1: Cost - Salvage Value / Estimated Units or Hours = Rate per unit or hour
Step 2: Rate per Unit or hour x Number of units produced or hours worked = Depreciation Expense

23
Q

Double Declining Balance Depreciation

A

(2 / Useful Life) x (cost - accumulated depreciation)

24
Q

Depletion Base

A

Cost - Residual Value
OR
Cost to purchase property
+development costs to prepare the land for excavation
+any estimated restoration costs
- residual value of land after the resources are extracted

25
Q

Total Depletion

A

Unit depletion rate x Number of “units extracted”

26
Q

Unit Depletion Rate (Depletion per Unit)

A

Depletion base / estimated recoverable units

27
Q

Step 1 of Exchanges Lacking Commercial Substance

A

*Do the Math First

FV old - BV old = Gain or Loss

28
Q

Exchanges Lacking Commercial Substance: No Boot is Received

A

No Gain

29
Q

Exchanges Lacking Commercial Substance: Boot is Paid

A

No Gain is Boot is less than 25%

30
Q

Exchanges Lacking Commercial Substance: Boot is Received

A

Recognize Proportional Gain if Boot received is less than 25%

31
Q

Exchanges Lacking Commercial Substance: Boot is 25% or more of total consideration

A

Both parties recognize the gain as a monetary exchange

32
Q

Revaluation Model (Intangibles)

A

*IFRS only

Fair Value on revaluation date - subsequent amortization - subsequent impairment

33
Q

Amortization of Capitalized Software costs: Percentage of Revenue

A

Total capitalized amount x (current gross revenue for period / total projected gross revenue for product)

34
Q

Amortization of Capitalized Software costs: Straight Line

A

Total Capitalized Amount x (1 / Estimate of economic life)

35
Q

Determining Impairment (PP&E, intangible with finite life)

A

Step 1: compare carrying value to undiscounted future net cash flows
Step 2: If step 1 fails Amount of Impairment Fair Value - Net Carrying Value add cost of disposal for assets held for disposal

36
Q

Determining Impairment (Intangible with Indefinite Life)

A

Step 2 only: Fair Value - Net Carrying Value

37
Q

Equity Method

A

Beginning Balance
+Investors share of investee’s earnings
- Investor’s share of of investee’s dividends
= Ending Balance

38
Q

Acquisition Method

A 
C: Common stock
A: APIC
R: Retained Earnings of sub eliminated
I: Investment in Sub is eliminated
N: NCI is created
B: Balance Sheet of Sub is adjusted to FV
I: Identifiable Intangible Assets of Sub are recorded at their FV
G: Goodwill of Gain is required
39
Q

Noncontrolling Interest at Acquisition Date

A

Fair Vale of Sub x NCI %

40
Q

Noncontrolling Interest After Acquisition Date

A

Beginning NCI
+NCI share of sub net income
- NCI share of sub dividends
= Ending NCI

41
Q

FV of Subsidiary

A

Acquisition cost + NCI at FV

42
Q

Goodwill

A

FV Subsidiary - FV Subsidiary Net Assets

43
Q

Present value of $1

A

Future Value / (1 + r)^n

44
Q

Future Value of $1

A

Present Value x (1 + r)^n

45
Q

Present Value of Ordinary Annuity

A

Annuity Payment x Present Value of Ordinary Annuity of $1 for appropriate n & r

46
Q

Present Value of Annuity Due

A

Present Value of ordinary annuity x (1 + r)

47
Q

Future Value of an Ordinary Annuity

A

Periodic Payment x Future value of an ordinary annuity of $1 for appropriate n and r

48
Q

Bonds Issues

A

Coupon / Price = Market

49
Q

Straight Line Method Bond Period Amortization

A

premium or discount and bond issuance cost / number of periods bond is outstanding

50
Q

Straight Line Method Bond Interest Expense

A

Face Value x Stated interest rate *either minus premium amortization or plus discount and bond issuance cost amortization

51
Q

Effective Interest Method Bond Interest Expense

A

Carrying Value at the beginning of the period x Effective (market) interest rate

52
Q

Effective Interest Method Discount Amortization

A

Interest Expense - Interest Payment (coupon)

53
Q

Effective Interest Method Premium Amortization

A

Interest Payment - Interest Expense

FAR Formulas (3 decks)

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