Flashcards in FAR - JH Deck (80):

1

## Income - Accrual accounting

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

Accrual to Cash (same as SOCF)

2

## Expense - Accrual accounting

###
Cash to Accrual (same as SOCF)

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

3

## Decision Usefulness: 2 Primary Characteristics

###
1. Relevance - Predictive value, Confirmatory value, Materiality.

2. Faithful Representation - Completeness, Neutrality, Free from Error.

4

## 4 Enhancing Qualitative Characteristics

### Comparability, Verifiability, Timeliness, Understandability

5

## Definition of current asset's operating cycle

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

6

## Consolidated F/S accounting concept - which entity?

### Economic entity

7

## Going Concern assumption supports...

### Supports historical cost; not @ liquidation value.

8

## Fair value based on "what" price and transaction

### Based on EXIT price and a hypothetical transaction

9

## HTM is measured at what option?

### Amortized cost & FV

10

## Form 10-Q periods presented

###
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

11

## Large accelerated filer ($700M or more)

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

12

## Accelerated filer ($75-700M)

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

13

## Non-accelerated filer (less than $75M)

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

14

## IASB Monitoring Board

### Appoints trustees of IFRS Foundation

15

##
IFRS Foundation (22 members) appoints 3 who?

IFRS Foundation responsible for what?

###
1. IASB Members

2. IASB Interpretation Committee

3. IASB Advisory Council

Fund-raising for entire operations for the IASB.

16

##
IFRS Interpretation Committee is...

IFRS Advisory Council is...

###
1. Emerging Issues Task Force

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

17

## 2 Assumptions under IASB Framework (no enforcement)

###
1. Going Concern

2. Accrual Basis

18

## IFRS for SMEs for inventory valuation approaches

###
1. FIFO or;

2. Weighted Average

19

## IFRS requires what classifications for Stmt of Fin. Position?

### Current & Non-current assets and liabilities

20

## What are the 4 items in Stmt of Comprehensive Income?

###
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)

21

## What's included in personal F/S?

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

22

## What is the purpose of the Private Company Council?

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

23

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

### Cost or Equity Method

24

## All notes receivable are recorded how?

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

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