Flashcards in Deck 27 Deck (21):
What kind of transaction qualifies as a discontinued operation?
The sale of a segment
What must occur for something to qualify as a discontinued operation?
The sale of a segment must qualify as a strategic shift and must have a significant effect on its operations
Difference between credit risk and market risk?
Credit risk: required to be disclosed while market risk is not required
When do you recognized the initial franchise fee as revenue?
When all conditions have been substantially performed
Substantial performance means:
Initial services have been performed and all other conditions of the sale have been met; no obligation to refund any payment
Rent expense includes:
First month's rent and an allocation of the bonus (last month's rent is prepaid expense)
Amounts reported in AOCI (such as unrecognized prior service cost) should be shown:
NET OF TAX
Routine employer contributions from general fund to pension trust fund would be accounted for as an:
Expenditure in general fund
Donor restricted cash contributions for long-term purposes should be shown where in the cash flow statement?
Change from FIFO to LIFO
Accounting principal change that is accounted for prospectively
Reporting sufficiency test for segments:
75% of the total "external sales" only
Examples of items that should be disclosed in the "summary of significant estimates"
Basis of consolidation, depreciation methods, amortization
What amount do you capitalize when recording the lease? the lesser of:
FV of asset or PV of minimum lease payments
Depreciable life for leases under GAAP vs. IFRS
GAAP: OW - use asset life, NS - use lease term; IFRS: lower of the two
What costs are included/excluded in the cost of the lessee
Included: BPO and guaranteed residual value; Excluded: executory costs
Net income =
Revenue - expenses - tax expense
What type of major government fund must prepare a cash flow statement?
Only the proprietary funds
Stock dividends vs. cash dividends declared
Stock dividends: memo entry only; cash dividends: reduce the investment account under the equity method
Interest expense over the term of the debt =
Cash interest paid + discount or - premium
How does a 50% stock dividend and 2:1 stock split affect weighted average common shares outstanding?
Will occur at beginning of the year; Multiple beginning balance by 1.5 and by 2.