Deck 1 Flashcards
(29 cards)
Change in accounting estimate is reported:
Prospectively - component of income from continuing operations
Change in accounting principle is reported:
Retrospectively - restating all prior periods presented.
Cumulative effect is an adjustment to beginning retained earnings if NONCOMPARATIVE financial statements aren’t presented or if financial statements don’t go back that far - change earliest presented.
Correction of an error is reported:
Prior period adjustment to retained earnings
Change in accounting principle that is inseparable from effect of a change in accounting estimate is reported:
Prospectively - component of income from continuing operations
Change from cash basis to accrual basis is reported as:
Correction of an error: prior period adjustment
Prior period adjustments to retained earnings are presented:
Net of tax
Changes in entities is reported:
Retrospectively - restate comparative financial statements for prior period adjustments
Change in depreciation method is
A change in BOTH method and estimate, but reported as a change in estimate - prospective
New method used as of beginning of year and start with current book value of asset
IFRS change in principle reporting requirements
3 balance sheets - end of current, end of prior, beginning of prior
2 of other statements - end of current, end of prior
If it can’t be determined if a change was in estimate or principle, change is considered:
A change in estimate and accounted for prospectively
Change in reporting entity is treated:
Retrospectively, including note disclosures, and application to all prior financials presented
IFRS disclosure requirements for material error correction
Amount of correction at beginning of earliest period presented
Nature of error
Impact of the correction on basic and diluted earnings per share for reach period presented
Cumulative effect of change in accounting principle equals:
Difference between retained earnings at the beginning of the period of the change and what retained earnings would have been if the change was applied to all prior periods, assuming comparative financials statements are not presented
Cumulative effect of changing from lifo to weighted average is treated:
Retrospectively - all data is available
Cumulative effect of changing from weighted average to lifo is reported:
Prospectively - data on historical LIFO layers not available - impracticable to calculate cumulative effect.
Minimum reporting requirements for first IFRS financial statements
Three statements of financial position (balance sheets)
Two statements of comprehensive income
Two separate income statements
Two statements of cash flows
Two statements of changes in equity
Related notes, including comparative information
What is the definition of comprehensive income?
Changes in equity of a business during a period from transactions and other events and circumstances from non-owner sources.
Other comprehensive income includes:
Changes in funded status of a pension plan
Unrealized gains and losses on available for sale debt securities
Foreign currency items
Effective portion of cash flow hedges
Where is AOCI reported?
As a component of stockholders equity on the balance sheet
A held to maturity debt security is reclassified as available for sale
Unrealized holding gains and losses reported as OCI
An available for sale debt security is reclassified as held to maturity
Moves out of OCI
Unrealized gains and losses on available for sale debt securities are reported:
As a part of OCI
Comprehensive is presented
Either on the face of a combined “statement of income and comprehensive income” statement as a separate section below net income, or in a separate “statement of comprehensive income”
Reclassification adjustments
Move other comprehensive income items from accumulated other comprehensive income to the income statement
