Star'd Flashcards

1
Q

ENHANCING qualitative characteristics:

A

-Comparability
(company-company)
*consistency = period-period

-Verifiability
(faithfully rep’d)

-Understandability
(concise)

-Timeliness

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2
Q

SFAC 5:

A

recognition and measurement of FS

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3
Q

fundamental assumptions and principles:

A
  • entity = separate corp/division
  • GC = entity will continue to operate in future
  • monetary unit = measure economic activity
  • periodicity = economic activity can be divided into meaningful time periods
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4
Q

5 elements of PV measurement:

A
  1. Est FCF
  2. Expectations about timing variations of FCF
  3. TVM (risk-free rate of interest)
  4. Price for bearing uncertainty (Cr risk)
  5. Other factors (liquidity issues + mkt imperfection)
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5
Q

COPAS price allocation:

A
  • if client can use machine without the other obligation, there will be 2 obligations
  • if client buys 2 obligations from 2 different competitors, they are 2 separate obligations (even if they need each other to perform)
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6
Q

satisfied over time:

A

[examples]:
- annual services

  • output method = newspapers produced/delivered
  • input method = CPA firm hours put into job
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7
Q

satisfied at point in time:

A

[department store example]:

  • control generally requires:
  • right to pmt to pay for asset
  • legal title to asset
  • physical possession of asset
  • customer accepted the asset
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8
Q

Rev Recognition; Principal vs Agent:

A
Principal = gross rev
Agent = net rev
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9
Q

repurch agreements:

A

is a borrowing (gave collateral), not a sale

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10
Q

bill-and-hold arrangements:

A

GR: not a sale (buyers request)

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11
Q

consignment:

A

not a sale

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12
Q

warranties:

A

treated as separate performance obligations if:

  • warranty is not req’d by law
  • coverage period is lengthy and

-no specific tasks required regarding compliance assurance

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13
Q

sale with ROR:

A

when expected to receive, a refund liability and asset related to subsequent product recovery is recorded

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14
Q

% completion method (contracts):

A

cost incurred:
Dr CIP
Cr Cash

billings:
Dr A/R
Cr Progress Billings

Pmt’s received:
Dr Cash
Cr A/R

est’d GP:
Dr cost of LT contract
Dr CIP
Cr Revenue from LT contract

construction completed:
Dr Progress Billings
Cr CIP

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15
Q

calculation for current GP for % completion method: [MEMORIZE THIS]

A

Step 1 [total GP]:
Contract Price
- total est and actual cost
= GP

Step 2 [%completed]:
Cost to date/total est cost = %

Step 3 [GP earned to date]:
GP* % completed

Step 4 [current GP]:
GP earned to date
(-) GP earned PY
= current GP

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16
Q

1st IFRS FS’s must present:

A

3 BS, 2 all others (and related notes)

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17
Q

disclosure of risks and uncertainties (GAAP):

A
  • nature of op’s (usually 1st note)
  • description of entity’s major P/S and its principal market including locations
  • use of estimates
  • certain significant estimates
  • current vuln due to certain concentrations:
  • vuln due to conc’s arising when entity is exposed to ROL that could be mitigated thru diversification
  • disclosure req’s:
  • *conc exists at FS date
  • *conc makes entity vuln to near-term impact
  • *reas poss that events could cause severe impact in near term
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18
Q

for GC basis (mitigation):

A

mitigation should be evaluated based on if it is effectively implemented and if plans will be successful

19
Q

subsequent evaluation periods:

A

*public:
files w/ SEC and must evaluate thru date FS is issued (longer than private)

*private:
all other filers eval thru date FS is available to be issued

20
Q

creation of new P’ interest with investment of additional capital (3 ways):

A
  1. Exact method:
    - use finger math
    (1/4 = 4-1; divide total capital accounts by 3 = new P’ interest contribution)
  2. Bonus Method:
    - bonus to existing partners when new partner pays more
    - bonus to new partner when new pays less (take out of existing accounts proportionately)

[example of bonus]:
A+B+C = 75k/3 = 25k

new paid 35k; 10k bonus for old partners proportionately

  1. GW Method:
    - only given to old partners
    - calculation:
    * *make agreed % investment to 100%
    * * new investment - BV = GW
    * *GW allocated prop’ly to capital accounts
21
Q

BDE; direct WO method:

A

*subseq collection of AR WO:
Dr BDE
Cr AR

*uncoll accounts recovered:
Dr Cash
Cr Uncoll accounts recovered (rev)

22
Q

BDE; allowance method:

A

*restore:
Dr AR
Cr Allowance

*cash collection:
Dr Cash
Cr AR

23
Q

computer software dvp costs: [to be sold, leased, licensed]

A
  • exp costs for planning, design, coding, testing incurred until TFE (tech feas estab)
  • capitalize costs for coding, testing, producing production masters incurred AFTER TFE up to point product is released for sale

[TFE is established upon completion of a detailed program design or working model]

24
Q

amortization of cap’d software costs (similar to % completion):

A

annual amortization is GREATER OF:

  1. % of rev OR
  2. SL amortization
25
Q

Debt Securities are:

A
  • corp bonds
  • redeemable PS (has maturity date)
  • gov sec’s
  • convertible debt
  • commercial paper (notes/drafts)

[NOT options/futures/forwards contracts, lease contracts, AR or NR]

26
Q

consolidation of 50%+ owned sub is not required when:

[GAAP vs IFRS]

A

[GAAP]

  • sub is in legal reorg
  • bankruptcy and/or sub operates under severe foreign restrictions

[IFRS]:

  • P itself is a wholly owned sub
  • P is not publicly traded
  • P company produces consol’d FS’s in compliance with IFRS
27
Q

financial lease criteria: (sales-type for lessor)

[capital lease]

A

[OWNES]

  • O = Title Transfer (ownership)
  • W = BPO (written option)
  • N = ~90% NPV of asset’s FV
  • E = lease life is ~75% econ life of asset
  • S = specialized asset and will not have an expected alt use to lessor when lease term ends
28
Q

Operating lease class’n (capital lease):

A
  • if OWNES not met
  • if “PC” is met, it will be direct financing lease for lessor; if 1 or less met it will be op lease
  • P = PV is ~90% FV
  • C = collection of lease pmt and RV is probable
29
Q

“REPORT N GO”

[lessee lease pmt items]:

A
  • R = Required contractual fixed payment
  • E = Exercised option (BPO)
  • P = PP at end of lease
  • O = Only indexed/rated variable payments
  • R = RV guarantees likely to be owed
  • T = Termination penalties (reas assured)

*N = Nonlease components

  • G = guarantees of lessor debt by lessee
  • O = Other variable lease pmt’s
30
Q

JE for operating leases: [lessee]

A

initial JE:
Dr ROU asset
Cr Lease L

subseq JE:
Dr Lease Exp
Cr Cash
Cr Lease L

Dr Lease L
Cr AD-ROU asset

*for AD, use amortization table (lease pmt - amort)

31
Q

JE for operating leases: [lessor]

A

*initial JE:
Dr L/R (calculate) (?)
Cr U/R

*1st lease pmt:
Dr U/R (?)
Cr Cash
-----------------------------------------
(most important)
Dr Cash
Cr rental income

Dr DE [BV/UL]
Cr AD

32
Q

JE for financing lease: [lessee]

A

*initial:
Dr ROU asset
Cr Lease L

*subseq:
Dr Int exp
Dr Lease L
Cr Cash/payable

Dr AE
Cr AD-ROU asset

33
Q

depreciable life for leases will be:

A

*meet [OW] test = asset life
(less DE)

*meet [NES] test = SHORTER of asset life or lease life (bigger DE)

34
Q

major diff b/w 2 CFO methods (direct and indirect) is:

A

the 2 starting points in the calculation:

[direct]:
uses NS as starting point

[indirect]:
uses NI as starting point

35
Q

MSWLF expenses should include:

A
  • cost of Equip expected to be installed and facilities expected to be constructed near/after the date that the landfill stops accepting solid waste and during the postclosure period. This equip should be limited to items that, once installed/constructed, will be exclusively used for the MSWLF. This may include gas monitoring and collection systems.
  • cost of final cover (capping) expected to be applied near/after date that landfill stops accepting solid waste
36
Q

enterprise fund criterias [primarily >50% self-supported by user charges]:

A
  1. Activity is financed w/ debt that is secured solely by pledge of net rev from fees and charges
  2. laws and regulations require cost of providing services to be recovered thru fees
  3. pricing policies of the activity establish fees and charges designed to recover its costs
37
Q

as a GR for EBP:

A

employees should disclose employer and employee obligations to contribution to the plan, a brief statement about the plan, and employee eligibility requirements

38
Q

categories of program revenues: [SOC]

A
  • S = Service Charges
  • O = Operating grants and contributions
  • C = Capital grants and contributions
39
Q

CFF (capital) includes:

A

acquiring and disposing of cap assets and any related debt

40
Q

CFF (non-cap) includes:

A
  • borrowing money for other than cap expend’s (TANs)
  • proceeds/pmt related to borrowing not attributable to acq, constr, improvement of cap assets
  • CR’s/CD’s related to grants or subsidies (support) not attributable to cap purposes
  • prop taxes not designated for cap purposes
  • cash paid to other funds (other than int svc)
  • operating transfer outs
41
Q

reconciliation for gov-wide FS at YE:

[CPAS RIDE or SIT]

A

*C = Cap Outlay (purchase of gen cap asset)
*P = Principal pmt on debt
*(A) = Asset disposals (NBV)
*(S) = OFS (loan proceeds)
*R = Revenue (accrual basis)
*(I) = IntEx (accrual)
* (DE)
*S = Service (int svc) NI
= change in NP of gov act’s (IS)
*IT = Interfund Transfer

42
Q

reconciliation for gov –> gov-wide (BS): [CAN SIT]

A
  • C = Cap Assets
  • (A) = AD
  • (N) = Non-CL
  • S = Svc (int svc NP)
  • IT = Interfund Transfer
43
Q

RSI for pension funds:

A

NPL = TPL - FNP