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CFE > Financial Reporting > Flashcards

Financial Reporting Flashcards

1
Q

Revenue recognition criteria - IFRS

A
  1. Identify the contract
  2. Identify performance obligation
  3. Satisfaction of performance obligation
  4. Determine transaction price
  5. Allocate transaction price to performance obligations
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2
Q

Revenue recognition criteria - ASPE

A
  1. Collection
  2. Measurement of consideration - fixed or determinable
  3. Performance - transfer of risk and reward of the inventory
    ASPE additional criteria:
  4. arrangement
  5. delivery
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3
Q

Qualifying asset?

A

Asset takes a long time to get it ready to use

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4
Q

Intangible asset - Definition criteria

A
  1. Identifiable 2. Control 3. Future economic benefit
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5
Q

Intangible asset - Recognition criteria

A
  1. Future economic benefit 2. Measurable
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6
Q

Development criteria

A
  1. Technical feasibility
  2. Intention to sell
  3. Ability to use or sell
  4. Ability to measure
  5. Adequate financial and technical resources
  6. Future economic benefit
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7
Q

Impairment of asset - Process

A
  1. Identify indication of impairment + Conclude
  2. Recoverable amount versus carrying amount
    - recoverable amount is the higher of value in use and FV less costs to sell
  3. Depreciation
  4. Reversal of impairment loss
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8
Q

Provision - recognition criteria

A
  1. Obligation as a result of past event
  2. Probable outflow of resources
  3. Reliable estimate of amount of obligation.
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9
Q

Contingency - definition criteria

A
  1. Existing condition
  2. Uncertainty to amount of loss
  3. Resolve by occurrence or non occurrence of future event
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10
Q

Contingency - recognition criteria

A
  1. Likely outcome of legal liability

2. Reliable estimate of amount of obligation.

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11
Q

Onerous contract - Process

A
  1. The unavoidable lease costs exceed the economic benefit - conclude
  2. Provision recognition criteria
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12
Q

ARO - ASPE versus IFRS

A

ASPE - Liability - legal liability / amount can be measured

IFRS - Provision recognition criteria

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13
Q

Grant / Subsidy - Process

A
  1. Reasonable assurance on - collection/ compliance on the conditions
  2. Timing of the recognition
  3. Presentation (capital grant/ income grant)
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14
Q

Non-monetary transaction - CV versus FV (default)

A

IFRS: - FV of the asset received
1. Transaction lack of commercial substance
2. FV of asset received or given up cannot be determined
ASPE: the above two plus - FV of the asset given up
3. Exchange product in the normal course of operation to facilitate sales to customers
4. Transaction involves the owner

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15
Q

Related party transaction - exchanged amount (IFRS) versus carrying amount (ASPE) - UNLESS - decision tree

A
  1. Identification of related party
  2. Measurement of related party transaction - carrying amount unless
    1) normal course of operation - monetary transaction or non-monetary transaction with commercial substance
    2) not normal course of operation but substantive change in ownership interest and exchange amount is supported by independent evidence
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16
Q

Asset held for sale - Criteria

A
  1. Carrying amount recover through sale rather than use
  2. Available for immediate sale
  3. Sale is highly probable
  4. 1 management commitment on sale
  5. 2 active plan to sell
  6. 3 sales price is reasonable
  7. 4 change to plan is unlikely
  8. 5 shareholder approval
17
Q

IFRS versus ASPE

A
  1. Control
  2. Investment in associate
  3. Joint venture
  4. Development cost
  5. PPE valuation
  6. Impairment
  7. Provision & contingencies
  8. Related party disclosure
18
Q

Discontinued operation

A
  1. a component of the entity
    1) has its own operation 2) generate cash flow
  2. Criteria
    1) major line of business 2) single corodinated plan
    3) subsidiary acquired with a view to resell
19
Q

Capital lease criteria - ASPE

A
  1. bargain purchase offer or transfer of ownership
  2. lease term at least 75% of the useful life of the asset
  3. PV of lease payments at least 90% of FV of the asset
20
Q

Foreign subsidiary translation

A
  1. Integrated operation - temporal method

2. Self sustaining operation - current method

21
Q

NPO accounting choice

-general/restricted/endowment fund

A
  1. restricted fund method

2. deferral method

22
Q

Commercial substance

A
  1. configuration of the future cash flows of the asset received differs from those of asset given up
  2. the entity-specific value of asset received differs form those of asset given up
23
Q

PPE recognition criteria

A
  1. Future economic benefit

2. Cost can be measured reliably

24
Q

Betterment criteria - ASPE

A
  1. Increase in physical output or service capacity
  2. Quality of output improved
  3. Lower operating cost
  4. Useful life of asset extended
25
Q

Biological asset

A
  1. Consumable biological asset - used for sale
    - - measured at FV less costs to sell
  2. Bearer biological asset - used for production
    - - measured at quoted price or PV of expected cash flow
26
Q

Non allowable costs for inventory

A
  1. Admin salary
  2. Storage costs
  3. Selling costs
  4. abnormal waste
27
Q

PPE definition

A

When all criteria are met:

  1. Held for use of production of goods or services
  2. Acquired with intention to use on continuing basis
  3. Not intended for sale in ordinary course of business (ASPE only)
28
Q

Inventory definition

A

One of the following is met:

  1. Held for sale in the ordinary course of business
  2. Used in the process of the production
29
Q

Share based compensation

A
  1. Assess the likelihood of meeting conditions
    1) performance requirement 2) employee turnover
  2. Measured at FV of shares at grant date
  3. Vesting period discussion
    1) vested immediately 2) vested over the service period

CFE (2 decks)

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