Acctg for Transfers Flashcards Preview

FAR CPA Custom > Acctg for Transfers > Flashcards

Flashcards in Acctg for Transfers Deck (11)
1

If a firm surrenders control over an entire asset, a sale has occurred. TF

True

2

If a firm surrenders components of an asset not participating interest, a sale has occurred. TF

False, this would make it secured borrowing.

3

If a firm surrenders components of an asset which are participating interest, a sale has occurred. TF

True`

4

A servicing liability results when expected revenues > the expected costs of servicing, as reflected in FV. TF

False, servicing asset.

5

A servicing asset results when expected revenues

False, servicing liability.

6

When a servicing liability/asset has a carrying value less than FV an impairment loss is recognized. TF

True

7

The servicing function is not inherent in all financial assets. TF

False, it is inherent in all.

8

Expected gross profit = projected revs - total servicing cost. TF

True

9

Debtors can write of liabilities as soon as they realize they cant pay them. TF

False, debtors can only write off debts if the debtor either pays the creditor and is relived of the obligation or by order of law/court.

10

In substance defeasance is...

when a company places purchased securities in an irrevocable trust and pledges them for future principal and interest payments on its LT debt.

11

IFRS: Financial assets are derecognized when 1: the asset has been transferred outside the transferors consolidated group and 2. the transferor has transferred substantially all risk and rewards of ownership. TF

True