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FAR - JH Flashcards

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1
Q

Income - Accrual accounting

A

Cash to Accrual (Liab.-add BEG; subtract END/Asset - subtract BEG; add END)
Accrual to Cash (same as SOCF)

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2
Q

Expense - Accrual accounting

A

Cash to Accrual (same as SOCF)

Accrual to Cash (Liab.-add BEG; subtract END/Asset - subtract BEG; add END)

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3
Q

Decision Usefulness: 2 Primary Characteristics

A
  1. Relevance - Predictive value, Confirmatory value, Materiality.
  2. Faithful Representation - Completeness, Neutrality, Free from Error.
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4
Q

4 Enhancing Qualitative Characteristics

A

Comparability, Verifiability, Timeliness, Understandability

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5
Q

Definition of current asset’s operating cycle

A

Operating cycle of one year or less - WHICHEVER IS LONGER!

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6
Q

Consolidated F/S accounting concept - which entity?

A

Economic entity

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7
Q

Going Concern assumption supports…

A

Supports historical cost; not @ liquidation value.

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8
Q

Fair value based on “what” price and transaction

A

Based on EXIT price and a hypothetical transaction

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9
Q

HTM is measured at what option?

A

Amortized cost & FV

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10
Q

Form 10-Q periods presented

A
  1. B/S - quarter; PY FYE
  2. I/S - quarterly and YTD and PY quarterly and YTD
  3. CF - cumulative YTD for CY; PY FYE
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11
Q

Large accelerated filer ($700M or more)

A

10-K - 60 days ; 10-Q - 40 days

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12
Q

Accelerated filer ($75-700M)

A

10-K - 75 days ; 10-Q - 40 days

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13
Q

Non-accelerated filer (less than $75M)

A

10-K - 90 days ; 10-Q - 45 days

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14
Q

IASB Monitoring Board

A

Appoints trustees of IFRS Foundation

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15
Q 
IFRS Foundation (22 members) appoints 3 who?
IFRS Foundation responsible for what?
A
  1. IASB Members
  2. IASB Interpretation Committee
  3. IASB Advisory Council

Fund-raising for entire operations for the IASB.

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16
Q

IFRS Interpretation Committee is…

IFRS Advisory Council is…

A
  1. Emerging Issues Task Force

2. Advises IASB on priorities, cost-benefit, etc.

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17
Q

2 Assumptions under IASB Framework (no enforcement)

A
  1. Going Concern

2. Accrual Basis

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18
Q

IFRS for SMEs for inventory valuation approaches

A
  1. FIFO or;

2. Weighted Average

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19
Q

IFRS requires what classifications for Stmt of Fin. Position?

A

Current & Non-current assets and liabilities

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20
Q

What are the 4 items in Stmt of Comprehensive Income?

A
  1. Unrealized gain/loss on AFS securities
  2. Unrecognized pension/post-retire benefit cost
  3. Foreign currency transaction adjustments
  4. Certain deferred gains/losses from derivatives (hedges)
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21
Q

What’s included in personal F/S?

A

Stmt of Fin. Position & Stmt of Changes in Net Worth

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22
Q

What is the purpose of the Private Company Council?

A

To assist the FASB in identifying whether and when a private company accounting standard should be developed.

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23
Q

For IFRS SMEs, what accounting method can be used with significant influence?

A

Cost or Equity Method

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24
Q

All notes receivable are recorded how?

A

PV of future cash flows (> 1 yr); PV - any discounts will be amortized.

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25
What are current & noncurrent notes receivable recorded at?
Current - Face value | Noncurrent - PV
26
Impaired note receivable are written down to?
PV of future cash flows expected to be collected using original interest rate; Loss or expense is recorded as difference b/t PV of CFs and original carry value.
27
1. Interest method is collected... | 2. Cost recovery method is collected...
1. Each year | 2. In total, but only when new carry value (PV of CFs) is received.
28
Inventory Costs includes what?
Freight-in, insurance, taxes paid, material handling/packaging costs, transport to consignees.
29
Inventory Costs does not include what?
Interest, advertising, freight-out, advance commissions.
30
What costs reduce inventory?
Purchase discounts & returns/allowances
31
Periodic Inventory (WA)
COGAS/# units available, multiply by either COGS or End Inventory, whichever you are calculating.
32
Periodic Inventory (Purchases) (FIFO)
HIGHEST Net Income COGS - lowest (earliest) costs End Inv - highest (latest) costs
33
Periodic Inventory (Purchases) (LIFO)
LOWEST Net Income COGS - highest (latest) costs End Inv - lowest (earliest) costs
34
FIFO favors...
Balance sheet; approximation of CURRENT costs
35
LIFO favors...
Income statement; approximation of NONCURRENT costs, but COGS CURRENT
36
LIFO is bad and good why?
Minimizes profits & chosen to minimize income tax
37
Dollar Value LIFO advantages are...
1. reduces effect of liquidation problem 2. allows to use FIFO internally 3. reduces clerical costs
38
Dollar Value LIFO (Conversion Index)
End Inv in CY dollars/End Inv in Base Yr dollars
39
Cost-to-Retail Ratio
COGAS cost/COGAS Retail
40
Retail Inventory Method (Calculate End Inv @ cost)
End Inv @ retail X C/R ratio
41
End Inv Overstated equals...
COGS Understated (OPPOSITE)
42
Beg Inv Overstated equals...
COGS & Purchases Overstated (SAME)
43
IFRS vs. GAAP Inventory
IRFS 1. LC or NRV vs. LCM 2. Same cost formulas vs. may be different formulas 3. Reversal of write-down permitted vs prohibited 4. LIFO prohibited vs. permitted 5. Cost flow assumption mirrors physical flow vs. does not
44
AAE
Accumulated Average Expenditures
45
Capitalized interest (2 methods)
1. Weighted Average (total interest/total principal)xAAE Subtract cap. interest from total interest = int. exp 2. Specific (capitalize interest on construction loans first, then other, if necessary. Subtract cap. interest from total interest = int. exp
46
AAE
Int. exp is difference b/t total int. cost and int. capitalized
47
AAE > debt
All interest is capitalized
48
Post-acquisition expenditures depreciate over...
the SHORTER of its useful life or remaining life of larger asset.
49
SL Method of Depreciation
Cost - salvage value / useful life
50
Sum of Years Digit Method
(N(N+1))/2
51
Double-Declining Method (SV not used)
Cost(2/N) ; i.e. Yr 2 = (Cost-depr yr1)(2/N), etc.
52
Natural Resources contains...
Cost of acquiring, exploring, etc. ; does NOT include cost of extracting of resource
53
Natural Resource (sum capitalized)
Acquisition, Exploration, and Development costs
54
Depletion is...
Allocation of costs to inventory
55
Depletion Rate
(natural resource acct balance-RV)/total est. units
56
Depletion for a period calculation is...
(Depletion rate)x(# units removed in period)
57
Extraction costs and Production costs
Debited to inventory, NOT natural resource
58
PPE IFRS
1. Est. useful life/depr. method reviewed annually 2. Revaluation PERMITTED (ENTIRE class) 3. Interest earned CAN BE offset by interest costs
59
No Significant Influence (
1. Trading - FV current, Unreal G/L in earnings, Real G/L not recorded, dividends are income. 2. AFS - FV curr/noncurr, Unreal G/L in OCI, Real G/L recognized, dividends are income. 3. HTM - Amort. cost, Real G/L recognized. 4. Equity method - Real G/L recognized 5. Cost method - No Unreal G/L, Real G/L recognized.
60
Investment reconciliation
Initial cost (Purchase - accrued interest) + Interest revenue (Initial cost x mkt rate x time) - Cash paid (Face value x state rate x time) Investment @ B/S
61
IFRS Investments (debt instruments)
Amortized Cost or FV; only debt instruments may be transferred b/t categories & RESTATED.
62
Joint Venture contributions are measured at what value?
Carrying value
63
Cost of stock rights formula
MV of one right/MV of one w/out right + MV of one right
64
IFRS Investment Property valued at...
Cost or FV (subsequent measurement); GAAP -cost only
65
Leasehold improvements amortization
SHORTER of useful life or lease life
66
Cash surrender value - Revenue recognized
Proceeds less the cash surrender value
67
Goodwill impairment is tested at what level?
Reporting unit level
68
Goodwill defined as...
Excess of FMV of net assets acquired
69
IFRS Intangibles
1. Revaluation of goodwill ALLOWED in active market 2. Reversal of impairment loss ALLOWED 3. Goodwill recognized at cash-generating unit level
70
For IFRS, what is the recoverable amount?
The greater of FV less costs to sell or value in use.
71
To calculate deferred revenue
Beg DR+cash received-earned rev=End Rev
72
Note payable (Discount)
Increases liability ; stated rate
73
Note payable (Premium)
Decreases liability ; stated rate > market rate
74
Stated rate
Determines cash payment of interest
75
Convertible bond methods (2 types)
1. BV Method - bond balances to stock accounts; no gain/loss recognized 2. MV Method - stock accounts are credited to MV of stock/bond, bond accounts are closed, and gain/loss is recorded for difference. (MV stock vs. bonds - diff is gain/loss.
76
Debt retirement (Gain/Loss)
When cash paid BV-DIC = Loss
77
Number of issued shares consists of...
of O/S and Treasury
78
Called or Redeemed Stock
1. All OE accounts are removed and dividends in arrears are paid first. 2. DEBIT diff goes to RE 3. CREDIT diff goes to Contributed Capital
79
Increase in contributed capital T/S scenario...
Reissue price>cost ; Purchase price
80
Decrease in contributed capital T/S scenario...
Reissue priceorig. issue price

FAR (19 decks)

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