FAR

Question 1

Transaction Cost & Transportation Cost Considerations In Fair Value.

Answer 1

Both Are Considered To Determine Most Advantageous Market(When Principal Market is Absent) but Fair Value Is Not Adjusted By Transaction Cost.

Question 2

What is the revenue classification for Fines & Forfeiture for a Local Government?

Answer 2

Charges for Services or Programs. Because they result from charges to those who are directly affected by the Service or Program even though they receive no benefit.

Question 3

Governmental Accounting: What is the method required for Statement of Cash Flow?

Answer 3

Indirect Method

Question 4

IFRS vs GAAP

Answer 4

IFRS is more principle based vs GAAP is more rule based.

Question 5

Inventory valuation 2015 ASU

Answer 5

Inventory measured under FIFO or Avg Cost should be reported at lower of Cost or NRV. Inventory under LIFO or Specific Identification should be reported Lower of Cost or Market.

Question 6

10-K, 10-Q filing deadlines

Answer 6

10-K 10-Q
Large Accelerated filers 60 40
Accelerated filers 75 40
Non Accelerated filers 90 45

Question 7

Statement of Functional Expenses is required for what kind of NFP entities?

Answer 7

Voluntary Health and Welfare Organizations. VHWOs

Question 8

Govt Accounting: What is the treatment of Debt Issuance Costs?

Answer 8

Debt Issuance Costs are expensed in current period. Exception: Prepaid Insurance.

Question 9

Governmental NFP entities: Treatment of Cash from Grants to finance Operating deficits.

Answer 9

They are listed under Non financing activities

Question 10

Treatment of Overdrafted Bank A/c

Answer 10

Treated as current liability. It is not netted against other Bank balances.

Question 11

NFP: Treatment of restricted cash from contribution for long term assets on SCF?

Answer 11

Financing Activities

Question 12

Govt: What funds use Other financing Sources & Other financing Uses accounts?

Answer 12

Governmental Funds

Question 13

What basis do Governmental Fund Budgets use?

Answer 13

Modified Accrual Basis. The same as the what Governmental funds use.

Question 14

For what funds Budgetary comparisons are required?

Answer 14

Governmental funds. Budgetary comparison statements can be part of Basic Financial Statements or RSI-Required supplemental Information.

Question 15

Treatment of 3 month Treasury bill purchase on SCF

Answer 15

No treatement. 3 month T bill is cash equivalent.

Question 16

Segment reporting: Disclosure is required when

Answer 16

10% or more revenue comes from one customer or 10% or more revenue comes from export sales

Question 17

NFP entity’s accounting policy to imply time restriction on gifts of long lived assets affects

Answer 17

the depreciation of the contributed asset. Donated asset is considered Temporarily restricted asset(Time) The depreciation is unrestricted assets reclassified from that Temp restricted asset. NFP also depreciated other long lived assets and the treatments would be similar.

Question 18

Govt: Enforceable legal claim

Answer 18

it determines the recognition of imposed non exchange revenues(property taxes) as assets. However, property taxes are susceptible to accrual and usually recognition takes place even if the legal claim does not arise immediately.

Question 19

IFRS When govt grant can be recognized as revenue

Answer 19

there is reasonable assurance that

1. entity will satisfy with conditions of grant
2. the grant will be received

Question 20

govt: MD&A is part of

Answer 20

RSI

Question 21

NFP Pooling of investment of contributions with different kinds of restrictions is allowed?

Answer 21

Yes, but realized and unrealized G/L must be allocated based on donor restrictions. board policies and relevant laws

Question 22

NFP investement earnings may be reported net of expensed as long as

Answer 22

disclosure of the expense is made elsewhere in financial statements

Question 23

cash basis statements are sometimes provided to creditors and investors

Answer 23

it happens

Question 24

Cash basis accounting

Answer 24

no current deductions for cap exp.

Question 25

Major funds

Answer 25

Mgmt can designate a major fund without meeting 10% and 5% criteria. Fiduciary funds are never major funds. Major fund reporting does not apply to Internal Service funds. Gen. fund is always a major fund.

Question 26

Govt. Only Gen fund can have unassigned fund balance.

Answer 26

other governmental fund balance would be considered assigned because it is accounted for in a separate govt fund(Capital Projects fund etc.)

Question 27

Major exception to modified accrual basis in governmental funds applies to

Answer 27

Principal & int on Gen long term debt

Question 28

Paramount objective in Govt reporting is

Answer 28

ACCOUNTABILITY It has 3 sub objectives: Interperiod Equity,Budgetary & fiscal compliance. Service efforts and accomplishments (SEA)

Question 29

IFRS GAAP - Comp Income statement

Answer 29

Both allow combined Income and Comp income statements

Question 30

Under IFRS, firms are required to include effects of price changes during periods of price instability and high levels of inflation.

Answer 30

good to know