F1-Standard Setting, IS, Reporting Requirements Flashcards
(34 cards)
What financial information is included in GENERAL PURPOSE financial reports?
1) resources of the entity
2) claims against the entity
3) how efficiently and effectively the entity’s management and governing board have discharged their responsibilities to use the entity’s resources.
Can inventory be measured using PV of Future Cash Flows?
No. PV of Future Cash Flows is used to measure LONG-TERM receivables or payables.
Briefly describe realization concept.
It’s the application of the accruals concept towards the RECOGNITION OF REVENUE.
Revenue is recognized (REALIZED) when earned.
When is a contingency recorded? Which GAAP principle illustrates this practice?
Record contingency when PROBABLE (not reasonably possible or remote).
Conservatism.
Unlike GAAP, what are the only fundamental assumptions under the IFRS conceptual framework?
1) Accrual Basis
2) Going Concern
Comprehensive income is…
all differences between beginning equity and ending equity other than transactions with owners.
Reductions in liabilities from delivering goods or services as part of NORMAL OPERATIONS is classified as…
Revenue
Which element iis not present in GAAP but is under IFRS?
Capital Maintenance adjustments.
They are increases/decreases in EQUITY that arise from revaluation or restatement of assets and liabilities.
What are the five elements of Present Value Measurement?
1) Estimate of future cash flow
2) Expectations about timing variations of future cash flows
3) Time value of money (risk-free rate of interest)
4) Price for bearing uncertainty (credit risk)
5) Other factors - e.g. liquidity issues and market imperfections
NOTE: LONG-TERM ASSET OR LIABILITY. For liabilities, also consider costs to settle and credit standing of the company.
What are the two approaches to determine PV in SFAC No. 7?
1) Traditional approach: contractually, scheduled known payments - e.g. Bonds
2) Expected cash flow approach: uses risk-free rate and focuses on PROBABILITIES of receiving future cash flows - e.g. Warranties
Primary reporting difference between developmental enterprises and established enterprises?
Developmental enterprises must provide additional disclosures:
1) identify financial statements as those of a developmental stage enterprise.
2) “CUMULATIVE” amounts: Balance Sheet (deficits accumulated), income statement since inception, cash flows since inception on statement of cash flows
3) Statement of Stockholders’ Equity: details about stock issuances. If non-cash, additional detail.
Both use GAAP.
True or False. An entity doesn’t have to make an explicit and unreserved statement that their first audited financial statements are in compliance with IFRS when first adopting IFRS.
False.
Describe which and how many financial statements needed under first set of IFRS statements.
BS - 3 (current period, end of prior period, and beginning of prior period = date of transition).
2 - CI, income, cash flows, changes of equity statements, and related notes.
What’s the effect on assets/liabilities when transitioning to IFRS?
Adjust values of assets/liabilities in accordance with IFRS standards through retained earnings at the date of transition.
Fair value: financial assets/liabilities, long-term assets, investments in subsidiaries, etc.
Inventory: lower of cost or NRV.
True or False. An entity transitioning to IFRS from GAAP should be consistent with the estimates made under GAAP?
True.
New estimates required by IFRS should be prepared in accordance with IFRS on date of transition.
Deadlines for Form 10-K issuers after the end of their fiscal years?
Large accelerated filers: 60 days
Accelerated filers: 75 days
Others: 90 days
What are the classifications for SEC filers?
Large accelerated: $700M+ worldwide market value in non-affiliates at end of most recent 2nd quarter.
Accelerated: $75M-$700M ……
Others: less than $75M
Deadlines for Form 10-Q issuers after the end of their fiscal quarters?
Large Acc - 40
Accelerated - 40
Others - 45
Annual report for company’s employment benefit plans?
Form 11-K
Describe Forms 20-F and 40-F.
For foreign issuers similar to 10-K. Canadian = 40-F. Other registrants use 20-F. If GAAP or IFRS not used, reconciliations to US GAAP required.
Describe Form 6-K?
Filed semi-annually by foreign private issuers. Similar to 10-Q.
Which form reports major corporate events? For example, major corporate acquisitions/disposals, etc.
Form 8-K
Describe who files Forms 3, 4, and 5.
Filed by directors, officers, or beneficial owners of more than 10% of a class of equity of securities of a REGISTERED company.
Which interim financial statements and for what periods are reported to SEC?
BS - most recent fiscal quarter and end of preceding fiscal year. Corresponding fiscal quarter required ONLY IF needed to understand impact of seasonal fluctuations.
Income - recent quarter, period from end of fiscal year and end of most recent quarter, and corresponding periods from prior year. 12-month rolling permitted.
Cash Flows - from end of most recent fiscal year to most recent fiscal quarter, and corresponding period from prior year. 12-month rolling permitted.
