Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BECKER NOTES > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

Marketable Securities

A

Trading - FV - Unrealized G/L (I/S)
Avail for Sale - FV - Unrealized G/L (OCI)
Held to Maturity - Amortized Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Avail For Sale IFRS

A

Foreign Exchange G/L on Debt AFS - I/S

Foreign Exchange G/L on Equity - OCI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Realized losses on AFS in I/S

A

Sale
Transfer to Trading
Impairment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Transfer to and from Trading

A

I/S @ FV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

G/L on Hedge

A

I/S

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Impairment

A

Avail for Sale - I/S (Recovery to OCI)

Held to Maturity - I/S (No recovery)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Sale of Avail for Sale

Out of OCI, into I/S

A

Reverse unrealized G/L OCI

Record realized G/L I/S

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Business Consolidation

A

Economic substance over form

Do not consolidate if control is not with owners (legal reorganization, bankruptcy, with trustee)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Different year-ends

A

US GAAP - 3 months or less, use Sub’s FY (disclose)

IFRS - adjust

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Levels of control

A

COST - No significant influence < 20%
EQUITY - With significant influence 20% to 50%
(Largest shareholder, majority of board)
CONSOLIDATE - With control >50%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

COST Method

Avail for Sale/FV Method

A

Mark to market
Investment adjusted for unrealized G/L
Dividend Income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

EQUITY Method - “Investment in Investee” B/S

A

Ignore FV
+ Share in earnings
- Share in dividends
- Amortization of FV Difference

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

EQUITY Method - “Equity in Earnings” I/S

A

+ Share in Earnings

- Amortization of FV Difference

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Investment with C/S and P/S

A

Significant Influence - use C/S only

Income from Sub = P/F dividends + Share in Earnings avail for common shareholders (Net income - PF dividends)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Equity Method

A

Unconsolidated Investment over 50%

Joint venture`

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Cost to Equity

A

IFRS - Prospectively
US GAAP - Retro Adjustment (Use Cost %)
- Reverse unrealized G/L in OCI the Ret Ear

17
Q

ACQUISITION Method

A

Consolidate sub at 100% FV at acquisition date

Ret Ear, End adjust to Ret. Ear, Beg

18
Q

CARINBIG

A 
C/S Sub
APIC Sub
Ret Ear Sub
Investment in Sub
NCI
B/S adjusted to FV
Identifiable Intangibles to FV
Goodwill/Gain
19
Q

Acquisition Expenses

A

Direct and Indirect - expensed
Stock related costs - APIC
Bond Issuance cost - capitalized and amortized

20
Q

In-process R&D

A

Intangibles - if success amortize, expense if fail

21
Q

NCI

A 
Partial  =  FV of Sub's Net assets x NCI 
Full =  FV of Subsidiary x NCI %
22
Q

Cash Flow - Period of Acquisition

A
  1. Net cash acquired - Investing
    (Acquisition cost paid - Sub’s cash)
  2. A/L of sub added to A/L of parent
23
Q

Cash Flow - Subsequent Periods

A
  1. Exclude cash flow b/n parent and sub
  2. Reconcile net operating income to consolidated income
  3. Include dividends paid to NCI only
  4. Include acquisition of addtl shares on open market - investing
24
Q

Consolidation and Deconsildation

A
  1. Non-control to Control (Step)
    - Adjust previous C/S to implied FV
    - G/L on I/S
  2. Control to Control
    - No G/L, APIC adjustment
  3. Control to Non-control
    - Sale G/L to I/S
    - Adjust remaining C/S to FV to I/S
25
Q

Intercompany transactions

  • Eliminate 100% even with NCI
  • Do not eliminate if not consolidating
A
  1. B/S
    - Interco payables and receivables
    - Gain on inventory and fixed asets
    - Bonds & Prem/Disct with Investment
    2/ I/S
    - Interco Sales and COS
    - Interest exp and income
    - G/L on sale, depreciation exp
26
Q

Elimination Entry - INVENTORY

A

Dr Interco Sales
Dr Retained Earnings (Interco profit in Beg. Inv)
Cr Interco COS
Cr Ending Inventory (Interco profit in End Inv)
Cr Cost of Goods Sold (Interco profit in COS)

27
Q

Elimination Entry - Bond Transactions

A

Dr Bonds Payable
Dr Premium
Cr Investment in affiliate bonds
Cr Gain on extinguishment of bonds (or Loss)

28
Q

Elimination Entry - LAND

A

Dr Interco Gain on sale of Land

Cr Land

29
Q

Elimination Entry - PP&E

A
  1. Eliminate Interco Gain
    Dr Interco Gain on sale of PP&E
    Cr PP&E
    Cr Accum Depr
  2. Eliminate Excess Depreciation
    Dr Accum Dep
    Cr Dep Exp
30
Q

Combined F/S

A

Common control
Common management
Uncosolidated subs

31
Q

Combined F/S Transactions

A

Eliminate interco transactions
NCI same as consolidated F/S
C/S, Ret Ear and I/S added accross

32
Q

Push Down Acctg

SEC required for wholly ownedsub

A

A/L to FV @ acquisition date
Ret Ear of sub transferred to paid in capital
Net Inc of each sub includes dep, amort and interest exp at FV

BECKER NOTES (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions