chapter 2 Flashcards
(53 cards)
deferred credits
unearned revenue or deferred revenue is a liability
realization
really happens in the real world
recognition
record
accrual
income statement impact/no current cash impact
deferral
no current income statement impact/ balance sheet impact( cash impact)
expense on income statement
expired costs
Unexpired costs
stay on balance sheet for now1. asset 2. deferred charge
revenue recognition when the right of return exists
recognize at time of sale if all requirement met
initial franchise fees recognize as revenue
when “ substantially performed”
franchisee’s firstday of operations
continuing franchise fees recognized as revenue
when earned
purchase of intangible aseets
record at cost
legal and registration fees incurred to obtain an intangible asset should also be capitalized
internally developed intangible assets
expense, because is R&D
costs associated with intangible assets could be capitalized
- successful defense( unsuccessful is expensed and test asset for impairment)
- registration or consulting fees
- design costs
- other direct costs to secure the asset
Under IFRS R&D
Research expensed, development could capitalized
amortization of intangible assets
must have finite life
and amortize use straight-line
if an intangible asset becomes worthless during the year
expense
If an intangible asset change in useful life
recalulate amortization
if an intangible asset is sold
compare carrying value at the date of sale with selling price to determine the gain or loss
US GAAP finite life intangible assets are reported at
cost less amortization and impairment
IFRS finite life intangible assets are reported at
cost model like GAAP or revaluation model
revaluation model under IFRS of finite life intangible
initial FV, revaluation losses to IS, revaluation gains to OCI. revaluation losses 先抵消revaluation gains. gain 也是先抵消 loss
initial franchise fees for franchisee
is intangible asset and amortize
continuing franchise fees for franchisee
expense as incurred
start up costs
expense
