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FAR > Sims > Flashcards

Sims Flashcards

1
Q

Loss due to new international law for exports

A

Extraordinary Gain (both unusual and infrequent)

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2
Q

Impairment loss due to writing down a component to fair value before its sale

A

Discontinued Operations

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3
Q

Depreciate at 150% declining balance over 25 years.

A

Current year depreciation
= 150% / 25 years
= 1.5 / 25
= .06

Multiply by Carrying Value (Cost less Accum D)
Salvage Value?

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4
Q

Sum of Years Digits (SYD) over 4 years

A

Year 1 = 4/4+3+2+1 = 4/10
Year 2 = 3/10
Year 3 = 2/10
Year 4 = 1/10

Salvage Value?

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5
Q

Carrying value of received asset on a like-kind trade

A

Recognize gain/loss on fair value received compared to carrying value of asset given up.

Basis/carrying value of asset received is then its fair value.

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6
Q

If you will use the table cell to subtract the input value

A

enter the value with a minus sign

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7
Q

If book value is given

A

don’t mistake it for Accum D and subtract it to calculate book value

If given, just use it!

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8
Q

Small Stock Dividend

A

Less than 20-25% of stock outstanding
Accounted for based on fair value of shares issued

Increase # shares issued & outstanding
Credit C/S and APIC (for value of stock)
+ Debit Retained Earnings (same total amount)
= $0 change in total Stockholders Equity

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9
Q

Property Dividend

A

DOD -
Debit/Credit Accum D (to write up/down to fair value
Credit/Debit gain/loss to recognize gain/loss prior to distribution (like a liquidating distribution, it’s recognized at the actual value given up)

Debit Retained Earnings (now for Fair Value of Property)
Credit Dividends Payable

DOP - Remove asset and payable
Debit Div Payable
Debit Accum Depr
Credit Asset

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10
Q

Large Stock Dividend

A

Greater than 20-25% of stock outstanding
Accounted for based on PAR value of shares issued

Increase # shares issued & outstanding
Credit C/S (for PAR value of stock)
+ Debit Retained Earnings (same total amount)
= $0 change in total Stockholders Equity

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11
Q

Estimated income tax

A

Be sure to look for existing Income Tax Expense/Payable and only Dr/Cr for the change to arrive at the total estimated amount

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12
Q

Realization

A

Process of CONVERTING
NONCASH resources and rights
to CASH or claims to cash

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13
Q

Revenues

A

INFLOWS or other enhancements of assets or settlements of liabilities
From DELIVERING or producing GOODS,
OR rendering SERVICES or other activities
= (constitute)
the entity’s ongoing OPERATIONS

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14
Q

Earnings

A

Performance MEASURE
concerned primarily with
CASH-TO-CASH
cycles

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15
Q

Measurement Method of L/T Receivables

A

PV of FCF

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16
Q

Measurement Method of AFS Securities

A

Current Market Value

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17
Q

Measurement Method for S/T Payables

A

Historical Cost

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18
Q

Measurement Method of L/T Payables (Bonds)

A

PV of FCF

net payable less amort

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19
Q

Accrual

A

Recognition precedes cash receipt/expenditure:

Payables (liability)

Receivables (asset)

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20
Q

Deferral

A

Cash receipt/expenditure precedes recognition:

Unearned - cash received, not earned (liability)

Prepaids/Depr - expense “paid”, not incurred
(asset, contra asset)

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21
Q

Economic Resources Measurement/Accrual Basis for

GOV

A

Proprietary (Enterprise/Internal Service)
Fiduciary (Private Purpose, Pension, Investment,
Agency)

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22
Q

Capitalize and Amortize a Franchise

Intangible Asset/Finite Useful Life

A

Captalize (initial cost + present value of future installment payments)

Amortize (Capitalized amount s/l by term of useful life)

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23
Q

Adoption of a pension plan

A

neither an accounting change or an error

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24
Q

Avoidable Interest

A 
Interest on direct debt-related expenditures at stated rate PLUS
Interest on (WA Accum Expenditures less direct debt-related expenditures) TIMES blended rate (other interest/other principal)
25
Q

Capitalized Interest

A

Lower or Avoidable or Actual Interest

26
Q

Interest Expense

A

Actual Interest less Capitalized Interest

27
Q

Sum of Years Digits and Partial Years

A

Calculate each of the (2) relevant years total depreciation and multiply by fraction of each year then add them together.

28
Q

Destruction of a warehouse by hurricane in Florida

A

Other income or expense included in NI

29
Q

Impairment loss from writing down a component unit to fair value prior to its sale

A

Discontinued Operations (results of operations from a component unit is sold or held for sale.)

30
Q

Accrual of deferred compensation before vestment

A

is still recorded as an accrued liability each period

31
Q

Capitalize Expenses

A

when they “attach”
insurance to inventory
freight-in to inventory

32
Q

Double Declining Balance

A

Ignore Salvage Value
HC x 2/Est Life = Depr Yr 1
(HC - Depr Yr 1) x 2/Est Life

150% DB = .5/Est Life

33
Q

Test for Impairment of Goodwill

A

Once per year
ANY time, SAME time

JE = Impairment Loss DR, Goodwill CR

34
Q

Amortization of Capital Expenses

A

to charge against net income

35
Q

BV for Asset Received

No commercial Substance with Boot

A

CV asset given up
less Boot
plus Gain recognized on boot received

36
Q

Finder’s Fee incurred by Lessor (operating lease)

A

Capitalized and Amortized over the lease term and reduces rental income

37
Q

Rental Income

A

Rent Revenue
Less Depreciation (annual portion)
Less Executory Costs (in full)
Less Finder’s Fee (amortized portion)

38
Q

Lessor recording of variable rental payments over term of operating lease.

A

S/L accrual to date (determined by total value of full lease)
less actual negotiated fluctuating payment amounts per rental agreement
= accrued rent receivable (excess)/deferred rent revenue (deficiency)

39
Q

Lease bonus

A

recognize annual (s/l amortization over lease term) not at inception

40
Q

Disclosure of lease obligation

A

Future (remaining) minimum lease payments in aggregate for remaining life of lease and annually for each of next five years.

41
Q

Percentage increase in rent during the life of the lease

A

Recognize total payments for entire lease at s/l.

Rent income/expense remains constant and does not increase when payment does

42
Q

Profit for sales-type lease

A

Manufacturer/Dealer Profit

FV (usu lesser of PV of lease pmts or given)
less cost of leased property

Recognized in total at inception:
Sales (CR) and COGS (DR)

Interest income is computed on lease receivable less any principle paid to date

43
Q

Record decrease in lease obligation (capital lease)

A

Only at date of periodic lease payment

Interest accrues constantly

44
Q

Annual Executory Costs and Capital Lease

A

Expense only when incurred

NOT part of initial lease obligation (liability) or minimum lease payments

45
Q

Accounting for Bargain Purchase Option (BPO, Capital Lease)

A

PV of one for BPO amount is added to PV of annuity for the lease payments.

46
Q

Imputed Interest Rate

A

Debtors incremental borrowing rate

Required when 0 or rate not given

47
Q

Stated Rate and Market Rate

A

Stated < Market = Discount
Stated = Market = No Discount/Premium
Market < Stated = Premium

48
Q

Simple and Compound Interest

A 
Simple = P X I X T
Compound = I on P + I (earned and not w/d)
49
Q

Stock Warrants with Value

A

Increase APIC by FV

APIC =
Value Stock/Value Stock + Bonds X Selling Price Bonds

50
Q

Redemption and RE

A

Gain/Loss to Net Income

51
Q

PV Bonds (Market Rate)

A

PV Annuity = stated interest pmts
Plus
PV of one = face value of bonds

52
Q

Effect of Premium on Interest Exp

A

Decrease

53
Q

Conversion of Bonds

A

B/P CR (remove)
Prem/Disc B/P DR (CR) (remove)
C/S CR (par value)
APIC CR (plug)

54
Q

Pension Expense Disclosure

A

Service Cost
+Interest (settlement rate x PBO)
-Actual Return on Plan Assets (End-Beg + BenPd - Contrib)
+Amort PSC Xn(n+1)/2 n= Most/Least
+-Deferred G/L unrecog expected - act
+-Amort deferred G/L in excess of corridor (in excess of 10% of greater of PBO or MRAV/years remaining svc period
+- Actuarial G/L

55
Q

Pension Asset/Liability

A

Pension Benefit Obligation less fair value of Pension Assets

56
Q

Effect of Service Cost, Interest and Benefits Paid on PBO

A

SC and Int increase

BenPd decrease

57
Q

1% increase/decrease in health care cost trend rate

A

disclose for:
aggregate cost
accum

58
Q

IFRS and pensions

A

projected unit credit method (PV DBO)

net A/L IF legal right to use assets of one plan for obligations of another

FAR (9 decks)

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