Sims Flashcards by Theresa Tetrault

Loss due to new international law for exports

Extraordinary Gain (both unusual and infrequent)

How well did you know this?

Not at all

Perfectly

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

Discontinued Operations

How well did you know this?

Not at all

Perfectly

Depreciate at 150% declining balance over 25 years.

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

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

How well did you know this?

Not at all

Perfectly

Sum of Years Digits (SYD) over 4 years

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

Salvage Value?

How well did you know this?

Not at all

Perfectly

Carrying value of received asset on a like-kind trade

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.

How well did you know this?

Not at all

Perfectly

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

enter the value with a minus sign

How well did you know this?

Not at all

Perfectly

If book value is given

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

If given, just use it!

How well did you know this?

Not at all

Perfectly

Small Stock Dividend

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

How well did you know this?

Not at all

Perfectly

Property Dividend

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

How well did you know this?

Not at all

Perfectly

Large Stock Dividend

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

How well did you know this?

Not at all

Perfectly

Estimated income tax

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

How well did you know this?

Not at all

Perfectly

Realization

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

How well did you know this?

Not at all

Perfectly

Revenues

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

How well did you know this?

Not at all

Perfectly

Earnings

Performance MEASURE
concerned primarily with
CASH-TO-CASH
cycles

How well did you know this?

Not at all

Perfectly

Measurement Method of L/T Receivables

PV of FCF

How well did you know this?

Not at all

Perfectly

Measurement Method of AFS Securities

Current Market Value

How well did you know this?

Not at all

Perfectly

Measurement Method for S/T Payables

Historical Cost

How well did you know this?

Not at all

Perfectly

Measurement Method of L/T Payables (Bonds)

PV of FCF

net payable less amort

How well did you know this?

Not at all

Perfectly

Accrual

Recognition precedes cash receipt/expenditure:

Payables (liability)

Receivables (asset)

How well did you know this?

Not at all

Perfectly

Deferral

Cash receipt/expenditure precedes recognition:

Unearned - cash received, not earned (liability)

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

How well did you know this?

Not at all

Perfectly

Economic Resources Measurement/Accrual Basis for

GOV

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

How well did you know this?

Not at all

Perfectly

Capitalize and Amortize a Franchise

Intangible Asset/Finite Useful Life

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

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

How well did you know this?

Not at all

Perfectly

Adoption of a pension plan

neither an accounting change or an error

How well did you know this?

Not at all

Perfectly

Avoidable Interest

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)

Capitalized Interest

Lower or Avoidable or Actual Interest

Interest Expense

Actual Interest less Capitalized Interest

Sum of Years Digits and Partial Years

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

Destruction of a warehouse by hurricane in Florida

Other income or expense included in NI

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

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

Accrual of deferred compensation before vestment

is still recorded as an accrued liability each period

Capitalize Expenses

when they "attach" insurance to inventory freight-in to inventory

Double Declining Balance

Ignore Salvage Value HC x 2/Est Life = Depr Yr 1 (HC - Depr Yr 1) x 2/Est Life 150% DB = .5/Est Life

Test for Impairment of Goodwill

Once per year ANY time, SAME time JE = Impairment Loss DR, Goodwill CR

Amortization of Capital Expenses

to charge against net income

BV for Asset Received | No commercial Substance with Boot

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

Finder's Fee incurred by Lessor (operating lease)

Capitalized and Amortized over the lease term and reduces rental income

Rental Income

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

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

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)

Lease bonus

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

Disclosure of lease obligation

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

Percentage increase in rent during the life of the lease

Recognize total payments for entire lease at s/l. Rent income/expense remains constant and does not increase when payment does

Profit for sales-type lease

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

Record decrease in lease obligation (capital lease)

Only at date of periodic lease payment Interest accrues constantly

Annual Executory Costs and Capital Lease

Expense only when incurred NOT part of initial lease obligation (liability) or minimum lease payments

Accounting for Bargain Purchase Option (BPO, Capital Lease)

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

Imputed Interest Rate

Debtors incremental borrowing rate Required when 0 or rate not given

Stated Rate and Market Rate

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

Simple and Compound Interest

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

Stock Warrants with Value

Increase APIC by FV APIC = Value Stock/Value Stock + Bonds X Selling Price Bonds

Redemption and RE

Gain/Loss to Net Income

PV Bonds (Market Rate)

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

Effect of Premium on Interest Exp

Decrease

Conversion of Bonds

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

Pension Expense Disclosure

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

Pension Asset/Liability

Pension Benefit Obligation less fair value of Pension Assets

Effect of Service Cost, Interest and Benefits Paid on PBO

SC and Int increase | BenPd decrease

1% increase/decrease in health care cost trend rate

disclose for: aggregate cost accum

IFRS and pensions

projected unit credit method (PV DBO) | net A/L IF legal right to use assets of one plan for obligations of another