Chapter 1 Flashcards
IDEA
I - Income from Continuing Operations
D - Income from Discontinued Operations
E - Extraordinary Items
A - Accounting Principle Changes
Treated like change in estimate (PROSPECTIVELY)
To LIFO
Change in Depreciation Methods
Change from Installment Method to Immediate Recognition
Comprehensive Income
Changes in Equity other than transactions with owners (Net Income + OCI)
OCI
P - Pension Adjustment U - Unrealized G/L on AFS F - Foreign Currency Translation Adj E - Effective Portion of Cash Flow Hedge R - Revaluation Surplus (IFRS)
Segment Reporting Test
10% of combined revenues (ext and int)
10% of GREATER of profit or loss (ext or int)
10% of combined assets of operation segments
75% of consolidated revenues (ext)
Disclosure Segment Reporting
US - assets and profits(losses) IFRS - assets, liabilities, and profits(losses) * No cash flow Operating Segments Products and Services Geographic Areas Major Customers
First time Adoption of IFRS
3 BS and 2 (IS, CI, CF, E and notes)
SEC Reporting
10K - annual 60-75-90 AUDITED 10Q - quarterly 40-45 UNAUDITED 11K - annual benefit 8K - major corporate events 3,4,5 - directors, owners NON-US 20F (other countries) and 40F (Canada) 6K - semi-annual Foreign UNAUDITED
Fundamental Qualitative Characteristics
Relevance and Representational Faithfulness
Relevance (Passing Confirms Money)
Predictive Value
Confirming
Materiality
Representation Faithfulness (Completely Neutral is Free from Error)
Completeness
Neutral
Freedom from Error
Enhancing Qualitative Characteristics
Compare and Verify to Understand in Time
Comparability
Verifiability
Understandability
Timeliness
Full Set of Financial Statements
Balance Sheet Income Statement Statement of Comprehensive Income Statement of Changes in Owners' Equity Statement of Cash Flow
Fundamental Assumptions - US GAAP
Entity Going Concern Monetary Unit Periodicity Historical Cost Revenue Recognition Matching Principle Accrual Full Disclosure Conservatism
Fundamental Assumptions - US GAAP
Going Concern and Accrual
Realization and Recognition
Realization: Sold and converted to cash or receivable
Recognition: Recorded in FS
10 Elements of FS - US GAAP
CREGL ALE needs ID
Comprehensive Income Revenues Expenses Gains Losses Assets Liabilities Equity Investment Distributions
6 Elements of FS - IFRS
ALEIEC
Assets Liabilities Equity Income Expenses Capital Maintenance
5 Elements of PV
UVOTE
Price for bearing Uncertainty
Expectations of timing Variations of future CF
Other factors (liquidity and market imperfections)
Time value of money (risk free interest)
Estimate of future cash flow
Discontinued Operations
G/L on Operations
G/L on Sale
Impairment Loss (BV less FV-cost to sell)
- Subsequent increase in FV (gain up to cumulative losses)
Component in Discontinued Operations
US GAAP 1. Operating segment 2. Reportable Segment 3. Reporting Unit 4. Subsidiary 5. Asset Group IFRS 1. Separate Major Line of Business or Geographical area of operations 2. Subsidiary acquired exclusively for resale
Exit and Disposal Activities
Involuntary employee termination benefits
Costs to terminate operating lease
Extraordinary Items
Abandonment/damage of plant due to infrequent earthquake or flood
Prohibition of product line due to new law
Expropriation of plant
First Note to FS
Summary of Significant Acctg Principles
- Measurement bases
- Principles and Methods
- Criteria
- Policies
- Pricing
