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F1 Flashcards

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1
Q

Multi Income Statement

A

Separates operating (income from operations) and non- operating (Interest, G/L and Investments) revenues and expenses.

Benefit: Enhanced user info
Calculate various ratios

NI before & after tax

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2
Q

Accounting Principles Board (APB)

A

Part time committee of AICPA

Issued accounting principles board opinions (APBO) and APB interpretations

Determined GAAP from 1959-1973

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3
Q

Classified B/S

A

Distinguishes current vs non-current

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4
Q

Comprehensive Tax Reporting

A

If displayed net of tax, tax benefit/expense must be disclosed in footnotes

or

If before tax, then can be shown on statements

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5
Q

Comprehensive Income

A

Change in Equity from non owner sources

NI (Continuing and Discontinued operations)
+
OCI (PUFER)

Reported interim, not reported on Per Share Basis

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6
Q

Reportable Segment Profit (Loss)

A 
Revenue (For segment, internal and external)
-
Directly traceable costs
-
Allocated costs (By CFO)
=
Operating Profit (EBIT)

Does not include General revenues or expenses income or interest.

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7
Q

Securities Exchange Commission

A

Legal authority to establish GAAP
Allows profession to self regulate
Formed by Securities exchange act of 1934

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8
Q

Literature in Codification

A

FEDPRIA

FASB
Emerging issues task force
Derivative implementation group issues
APBO
ARB
Accounting Interpretations
AICPA
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9
Q

GAAP vs IFRS (Notes to F/S disclosures)

A

IFRS - disclose judgements AND Estimates

GAAP - estimates only

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10
Q

GAAP Conceptual Frameworks Underlying Financial Accounting

A

Serves as basis for all FASB pronouncements

Provide basis for concepts

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11
Q

IFRS

A

Includes IFRS, IAS, Interpretations

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12
Q

Comprehensive Presentation

A

Single or 2 Statement Approach

Single - Rev to NI to CI

Two Statements- Rev to NI then NI to CI

GAAP or IFRS for both

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13
Q

Size Test

A

10% of
1. Assets 2. Revenue or 3. Profit (Loss)

Both External and Internal

Materiality test

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14
Q

Segment Reporting

A

Includes inter company transactions
Public companies only
Operating segments

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15
Q

Error Correction

A

non-GAAP to GAAP

PY Adj/Restate

  1. Comparative f/s
    Correct error in prior statement
    If year not presented, adjust RE
  2. Not comparative
    Adjust Beg RE net of tax
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16
Q

Operating Segments

A

Earn or incur own rev/expense

Discrete (Traceable) f/s info available

NOT 1. Corporate Headquarters 2. Pension Plan

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17
Q

Measurement/Valuation of Held for Sale

A

Lower of

  1. Carrying Value
    or
  2. FV less cost to sell (NRV)
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18
Q

Presentation order of I/S and R/E statement

A

IDA

Income from continuing operations (Before then after Tax)

Discontinued Operations (Net of Tax)

Accounting Principles Change (Cumulative effect on RE net of tax)

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19
Q

Reporting Sufficiency Test

A

75% of External Sales (Not Internal)

add up until 75% of all consolidated revenue

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20
Q

Held for Sale Requirements

A
  1. Commits plan to sell component
  2. Available for immediate sale as is
  3. Program to locate buyer
  4. Probable sale in one year

IFRS- Individual A’s and L’s measured for G/L

GAAP - Impairment analysis as a whole component

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21
Q

Other Comprehensive Income

A

Direct to equity - PUFE(R)
Excluded from NI

Pension Adjustment
Unrealized G/L (AFS only)
Foreign Currency G/L (Translation or effective)
Effective cash flow hedges
Revaluation Surplus (IFRS only)
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22
Q

Effective Tax Rate

A

(Yr to date income x estimated effective tax rate) minus provisions

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23
Q

Change in Estimates

Study These Flashcards
A

Prospective approach

Current and future income from continuing operations

Change in principle inseparable from change in estimate

24
Q

Major Customers

Study These Flashcards
A

If one customer generates 10% or more revenue from customer then identification of segment receiving revenue must be disclosed.

25
Discontinued Operations Calculations
All year incurred 1. Impairment loss (CV-NRV) 2. G/L continuing operations (for whole year not sold) 3. G/L sale/disposal (SP-NRV) Net of Tax end of year
26
SEC Reporting Requirements
1. Registration Statements 2. 10-K (Annual audited US companies) 3. 10-Q (Quarterly unaudited US companies) 4. 11-K (Employee benefit) 5. 20-F, 40-F (Annual foreign issuers in US) 6. 6-K (Semiannual foreign issuers in US) 7. 8-K (Major corporate events) 8. 3,4,5 (Filed by directors, owners)
27
FASB
Established 1973, determined GAAP since Issued EIFT, SFAC
28
SEC Literiture Standards included in Codification
Regulation for Accounting IS Emerging 1. Regulation SX 2. Financial Reporting Releases 3. Accounting Series Releases 4. Interpretive Releases (IR) 5. Staff accounting bulletins (SAB) 6. ETIF
29
Committe on Accounting Procedure (CAP)
Part-time committee of AICPA that released accounting research bulletins (ARB) Determined GAAP from 1939-1959
30
AOCI
OCI is closed to this account
31
Imminent Liquidation
no longer going concern Basis
32
Discontinued Operations Req
Strategic shift or major effect on operations AND 1. Has been disposed or is classified as Held for Sale
33
Change in Accounting Entity
Retrospective/ Restate Restate if comparative f/s are presented IFRS does not include this
34
SFAC NO. 5 (Recognition Financial Statements)
Full Set of Statements IFRS only assumption (Going Concern)
35
FASB Accounting Standards Codification
Single source of authoritative US GAAP If not included, not a part of GAAP
36
Interim Reports
Not required by Gaap or IFRS SEC requires reporting of interim Timeliness over reliability (Unaudited) Integral part of annual statements
37
Exit or Disposal Activities
Downsizing, closing a hub requires recognition of a liability right now (PV) for costs associated with disposal Reported in continuing operations if not discontinued activities
38
International Accounting Standards Board (IASB)
Established 2001 part of IFRS Develop single set of high quality global standards
39
SFAC NO. 6 (Elements of F/S)
REGL AL needs ID ``` CI Rev Exp Gains Losses Assets Liability Invest owners Distributions ``` IFRS - Capital maintenance
40
Liability for exit or disposal activity recognized if...
1. Obligating event has occured 2. Results in present obligation to transfer assets 3. Entity has little/no discretion to avoid future transfer of assets ``` Costs now (PV) Operating losses (Period they occur) ```
41
Private Company Council
formed by financial accounting foundation to improve standards setting for private companies Provide alternate to GAAP to make statements more relevant/cost beneficial
42
SFAC NO. 8 (Chapter 1)
Disclose useful information to primary users (External) investors, creditors, lenders Info on assets, liabilities, effective and efficiency.
43
Change in AOCI by Component
Beg Bal + (OCI +/- Amounts reclassified) Tax effects must be disclosed in footnotes SE section of B/S
44
SFAC NO. 4 (Non- Business Orgs)
Lack ownership | non profit
45
SFAC NO. 8 Chapter 3 (Qualitative Characteristics)
Relevant and Faithful 1. Relevance a. Predictive b. Confirming value c. Materiality 2. a. Completeness b. Neutrality c. Freedom from error
46
Reclassification Adjustments
Avoids double counting Moves OCI from AOCI to I/S B/C they have to hit I/S
47
Enhancing Qualitative Characteristics (SFAC No. 8 Chapter 3)
1. Comparability 2. Verifiability 3. Timeliness 4. Understandability
48
Going Concern Basis req
1. No sub. Doubt - No disclosure 2. Sub doubt alleviated through mgmt mitigation- Disclosure 3. Sub doubt not alleviated - Disclosures (NOT liquidation basis)
49
SFAC NO. 7 (CF Info)
1. Estimated FCF 2. Expectations about timing variations of FCF 3. TVM 4. Price of uncertainty 5. Other factors
50
Single Step I/S
Total Rev- Total Exp (Including Tax) Simple Only net of tax
51
Statements of financial accounting concepts (SFAC)
Conceptual Framework
52
Accounting Changes (3)
1. Change in estimate (Prospective) 2. Change in principle (Retrospective) if not discernible, treat as change in estimate 3. Change in entity (Restate)
53
Change in Accounting Principle
Retrospective Should not be made for event that is non reoccurring Adjust beg RE PY Restated
54
Annual F/S Req
1. Audited 2. B/s (2 most recent) 3. I/S, CF (3 most recent)
55
Summary of Significant Accounting Policies
GAAP and IFRS require description of policies be included as an integral part 1st or 2nd note a. Depreciation method b. Consolidation basis c. Interperiod tax allocation d. Inventory pricing e. rev recognition

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