FAR

Question 1

Roger is PC and he’s a little Materialistic

Answer 1

Relevance:
Predictive value
Confirmatory value
Materiality

Question 2

Roger is never on the FENCe

Answer 2

Faithful Representation:
Error (free from)
Neutrality
Completeness

Question 3

Roger is CUT like a V

Enhancing Qualitative Characteristics

Answer 3

Comparability
Understandability
Timeliness
Verifiability

Question 4

Codification

Answer 4

FEDPRIA
F - Financial accounting standards Board FASB
E - emerging issues task force EITF
D - derivative implementation group issues
P - accounting principles board opinions
R - accounting research bulletins
I - accounting interpretations
A - American Institute of CPAs (AICPA)

Question 5

DENT (comprehensive income)

Answer 5

Derivatives cash flow hedge
Excess amortization for pensions
Net unrealizable gain/loss on AFS investment
Translation (foreign currency)

Question 6

FASB - accounting standards codification

Answer 6

The single source of authoritative nongovernmental US GAAP.

Accounting and financial practices that are not included in the codification are not GAAP!

Question 7

SEC Standards included in the codification

Answer 7

Regulation For Accounting IS Emerging

1. Regulation - Regulation S-X
2. For - Financial Reporting Releases (FRR)
3. Accounting - Accounting Series Releases ASR
4. I - interpretative releases (IR)
5. S - Staff Accounting Bulletins
6. Emerging - EITF Topic D and SEC Staff Observer Comments

Question 8

Goal of the PCC

Answer 8

The goal of the PCC is to establish alternatives to U.S. GAAP, where appropriate, to make private company financial statements more relevant, less complex, and cost-beneficial.

Question 9

The purpose of the IASB international accounting standards Board

Answer 9

The purpose of the IASB is to develop a single set of high-quality global, accounting standards.

Question 10

IFRS differences - Framework

Answer 10

IFRS - the concepts in the Framework can be applied

U.S. GAAP - The concepts in the framework cannot be applied.

Question 11

Conceptual frameworks

Answer 11

Conceptual frameworks are the basic reasoning for the underlining financial accounting, it is not GAAP.

Question 12

Chapter 1: Conceptual framework for financial reporting

Answer 12

Disclose the entity’s performance.
Provide financial information about the reporting company that is useful to the primary users for decision-making.
Meet the informational need.

Question 13

Income Statement

Answer 13

IDEA
Income from Continuing operations
Discontinued operations 
Extraordinary items
Accounting Principles

Question 13

Held For Sale

Answer 13

Component of the business or disposal group:

Adopt a plan, available for sale, looking for a buyer, expect to be completed in one year.

Question 15

Held for sale US vs IFRS

Answer 15

IFRS test individual assets while US GAAP test the whole component for impairment.

Question 16

Loss from discontinued operations

Answer 16

Impairment Loss + Operating loss + gain/loss on disposal

Question 17

Conditions to move component into discontinued operations

Answer 17

A strategic shift/major effect on Operations

GEL
Geographical area
Equity method investment
Line of business

Question 17

Change an estimate and accounting principle

Answer 17

Demo cost is a change in accounting principle inseparable from a change an estimate. When a change in accounting principle is inseparable from a change an estimate you will treat that as a change in estimate. The effect of this change is reported prospectively and is a component of continue operations.