FAR Flashcards
(151 cards)
fWhat does a change in estimate affect?
Only current and subsequent periods. DOES NOT AFFECT RE OR PRIOR PERIODS
What does an accounting change of principle affect?
Shown net of tax on the RE statement
When is restating prior years financial statements required?
Only when comparative financial statements are shown for prior period adjustments of discovered errors, changes in entity or changes in accounting principle.
What does it mean to agree upon forward rate?
It means that it is the foreign price is locked in and does not change.
What is included in revenues for a single step income statement?
Sales of goods, services and rentals.
What is included in Comprehensive Income?
Any changes to stockholders other than owner investments and distributions to owners.
Where are gains reported that are unusual and infrequent?
Income from continuing operations.
Where is unrealized gains for availablie-for-sale securities reported?
Other Comprehensive Income (OCI)
Where does Income from Discontinued Operations fall on the IS?
After Income from Continuing Operations after tax.
What is the “held for sale” criteria
- Management commits to a plan to sell
- the component is immediately avaiable for sale in current condition
- active program to locate a buyer has been initiated
- The sale of the component is probable and the sale is expenceted to be completed within one year
- The sale of the component is being actively marktered.
- It is unlikely that significant change to the plan to sell will be made or that the plan will be withdrawn.
What is included in other comprehensive income (OCI)?
Pension Adjustments, unrealized gains (losses) on available-for-sale debt securities and hedges, foreign currency items, and instrumen-specific credit risk.
How to calculate the loss from discontinued operations before sold?
Losses from the activity plus the impairment loss.
When are stock dividends & stock splits treated?
As if it had occurred at the beginning of the year.
When is a 10-Q required to file for an accelerated filer?
40 days after the end of the period.
Is treasury stock included in basic EPS calculations?
Yes
Are dividends in arrears reported on the balance sheet?
No, they are disclosed. Dividends are a liability until they are declared.
How do you allocate “issue proceeds” of a basket purchase or sale of convertible preferred stock?
Based on relative fair market values.
Under the cost method, do treasury stock transactions affect retained earnings?
Only if the resale of the stock was higher than the acquisition price.
What happens when reaquired shares are reissued at a lower price?
It will decrease the APIC until $0 and then decrease RE.
When are convertible securities included in the computation of diluted EPS?
Only when they are dilutive. If they are anti-dilutive, ignore.
Are unrealized losses for on tradingn securities part of comprehensive income?
Yes, but it is already included in Net Income. Other comprehensive income is PUFI
When distributing property as a dividend, what two things will happen?
A gain/loss will occur and it will decrease RE
What is the value of the common stock when issued?
Amount of shares x the stated value. Anything additional is APIC
What is a liquidating dividend?
It is the difference between the cash dividend declared and RE. Only when the dividend is greater than the RE.