Deck 17 Flashcards Preview

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Flashcards in Deck 17 Deck (20):
1

Valuation allowance

This will be recognized when it is more likely than not (50%) that part or all of the DTA will not be realized (not allowed under IFRS)

2

Required adjustment for deferred taxes =

Ending balance - current balance

3

DTA and DTL under IFRS are always recorded as:

Noncurrent

4

A gain occurring from a sale/leaseback should be reported as an:

Asset valuation allowance

5

Future tax deductions result in (Ex: allowance for doubtful accounts):

Deferred tax asset

6

Future taxable income results in (Ex: unrealized G/L on trading)

Deferred tax liability

7

Deferred tax asset is more likely than not, not to be realized; what occurs?

Increase tax expense and decrease the asset (increase valuation account)

8

Interest cost for pension plans =

Beginning PBO x Discount rate

9

Liquidating dividend =

Total cash dividend declared minus retained earnings

10

How does the exercise of stock rights effect RE and NI?

Increase RE but no effect on NI

11

Calculate common shares outstanding:

Common shares outstanding - treasury shares purchase + treasury shares reissued (does not includes the shares of convertible preferred stock)

12

Which has preference over the other? (Common or preferred stock)

Preferred stock (pay first)

13

Treasury stock gains and losses are recorded as:

Direct adjustments to stockholders equity (APIC); no effect on income statement

14

Book value per common share =

Common stockholder's equity/ common shares outstanding

15

Equity instruments issued for employee services are to be valued at what date:

Date of Grant

16

Compensation expense is calculated on what date?

The grant date and recognized over the service/vesting period

17

Intrinsic value of call option =

# of share options x (market price of stock grant date less exercise price of the share option)

18

Common shareholders' equity =

Total equity - preferred stock outstanding - cumulative preferred dividends in arrears

19

Change in retained earnings =

Net income/loss - dividends declared +/- prior period adjustments +/- changes reported retrospectively + adjustment from quasi-reorganization

20

Purpose of appropriating retained earnings:

To disclose to shareholders that some of the retained earnings are not available to pay dividends