FAR F1 Financial Reporting Flashcards
What is filed on Form 8-K?
Form required by SEC to be filed by all companies to report any major changes in the company. This is filed immediately (4 days) upon changes.
Corporate asset acquisitions/ disposals
Accountant changes
Financial statement changes
Management changes
Changes in securities
On Dec. 1 of the current year, Clay Co. declared and issued 6% stock dividend on its 100,000 shares of outstanding common stock. There was no other common stock activity during the year. What number of shares Should Clay use in determining basic EPS for the current year?
The stock dividend that was issued would be treated within the fiscal year. The additional 6% declared would be added to the existing outstanding shares and that # would be used to determine EPS.
6% x 100k shares = 6000 shares
100k + 6k = 106,000 shares outstanding
What is the EPS formula?
Basic EPS = (Net Income - Any Dividend Payouts) / WASCO or Outstanding Common Stock
What is the deadline to file Form 10-K for an accelerated filer?
Accelerated filers have 75 days to file Form 10-K.
An accelerated filer is a company that has a worldwide market value of outstanding common equity greater than or equal to $75m
A US publicly traded company’s second fiscal quarter ends on March 31. If the company is an accelerated filer, how many days does the company have to file Form 10-Q? What day is the dead line?
Form 10-Q is due within 40 days of the period end.
May 10
What should a full set of financial statements include?
Balance Sheet
Income Statemnt
Statement of Comprehensive Income
Statement of Cash Flows
Statement of Changes in Owners’ Equity
What is meant by a “classified” BS?
Classified balance sheet lists out current and non current assets and liability’s
Name the expense that each of the unexpired costs turns into as they expire:
- Inventory
- Prepaid insurance
- Net book value of fixed assets
- Unexpired cost of patents
- Cost of goods sold
- Insurance expense
- Depreciation expense
- Amortization expense
Are gains and losses on disposal of assets shown on a gross basis or net basis?
NET BASIS - gains and losses are reported at net amounts (proceeds less the net BV)
How does a multiple step income statement differ from a single step income statement?
Multiple step lists operating revenue and expenses separate from non operating rev and exp and other gains and losses.
Single step does not seperate operating from nonoperating. Total expenses are subtracted from total revenue
The gain or loss from discontinuted operations can consist of?
- Impairment loss - cost of holding onto the asset is greater then the $ it is generating
- Gain or loss from operations
- Gain of loss from disposal of asset
How do we account for increases in the fair value of a discontinued component?
The increase in fair value means that there will be a GAIN recognized minus the costs to sell.
This is reported in period of increase
What qualifies for a disposal to be reported in discontinued operations?
If the disposal will have a major effect on the company’s operations and financial results
What are two types of foreign currency transactions?
- Operating transactions - any transactions that involve imports, exports, lending, borrowing, and investing
- Forward exchange contracts - agreement to exchange currency at a future date with a set rate
What is the purpose of appropriating Retained Earnings?
To disclose to shareholders that some of the earnings are not available to pay dividends because the cash has been restricted expansion of the company.
When the purpose has been achieved, it should be restored to unappropriated retained earnings.
