SEC Flashcards
How is FV measured when there is an impairment loss?
Measured based on observable inputs in the principle market. FV is the price in that market without adjustments for transaction cost.
T or F. Factoring receivables without recourse is a sale of receivables.
True
What is a receivable pledge?
A pledge or assignment is using receivables for collateral. The company that made the pledge maintains control.
T or F. With a pledge, the A/R remains with the assignor. When cash is collected from pledged A/R it is remitted to the assignee. This is not a sale like factoring
True
What is a change from cash basis to accrual based accounting?
An error correction. Reported retrospectively. Its NOT a change in accounting principle.
What is cost approach based on?
Current replacement cost
What is the market approach based on?
Information such as market transactions for similar items
What is the income approach?
Uses methods based on market expectations about future amounts or cashflows like earnings.
What is FV based on?
The highest and best use by market participants.
