Financial Statements Flashcards Preview

FAR 2014 > Financial Statements > Flashcards

Flashcards in Financial Statements Deck (81)
Loading flashcards...
1

Which Personal Financial Statements are required?

Statement of Financial Condition & Statement of Changes in Net Worth

2

How are assets and liabilities valued in a Personal Financial Statement?

Estimated current value

3

How are estimated taxes that would be paid if all assets were converted into cash and all liabilities paid presented on a Personal Financial Statement?

Presented on Statement of Financial Condition between Liabilities and Net Worth

4

What is the general presentation on a statement of financial condition?

Assets
- Liabilities
- Estimated taxes on assets sold
: Net Worth

5

How is life insurance presented on a Personal Financial Statement?

Only shown if there is cash surrender value

It is shown net of loans against the policy

6

How are business interests shown on a Personal Financial Statement?

Business Interests that constitute a large percentage of total assets should be separated from other investments

7

What is the discreet view in an Interim Financial Statement?

Interim period is a separate accounting period - not GAAP

Same accounting principles used for annual reporting should be used.

8

What is the integral view in an Interim Financial Statement?

Interim period is a part of the annual period - GAAP

Gross profit method may be used to estimate COGS and inventory

Temporary declines in inventory aren't recognized

9

How are discontinued operations & extraordinary items reported in Interim Financial Statements?

Aren't prorated

Fully recognized in Interim Period as incurred

If it occurs in Q3 - it's recognized in Q3

10

How are cumulative gains and losses reported in Interim Financials?

Reported as if they occurred in the first quarter

11

How is inventory valuation handled in Interim Financials?

If inventory experiences a decline in value during an interim period - the loss is recognized in the interim period

If the loss is expected to be only temporary - no loss is recognized

12

What is one of the primary problems with interim reporting?

The matching principle gets messed up - Expenses incurred in one period may benefit future periods

13

For whom is Segment Reporting required?

Publicly traded companies

14

What factors cause a segment to be significant and therefore to be reported separately?

Revenue of segment is 10% or more of total

Profit is 10% or more of total

Segment assets are 10% or more of total

75% Test - All segment revenues must equal 75% of total external revenues

15

What is the disclosure requirement regarding sales of 10% or more for one customer?

If 10% or more of enterprise revenue comes from one customer - the segment making the sales must be disclosed

16

How to report gain or loss from single occurrence not directly related to operation of pension plan

Report as part of that occurrence and not part of plans activity

17

What is the corridor approach

Determines gain or loss amortization on unrecognized net loss
Recognized gain or loss is excess of 10% of greater of PBO or MRAV over unrecognized net loss
Value / average remaining service period is amortization

18

Number of years required to disclose estimated future contributions to defined benefit plan

Following year only

19

What is prior service cost? How is it recognized?

PV of retroactive benefits given to employees for years of service provided before date of amendment to plan
Recognize as expense (amortized) during service periods of those employees who are expected to receive benefits under plan

20

What is pension interest cost?

Increase in FV of plan assets due to passage of time

21

How does plan amendment for prior service cost affect current and past financial statement

Change reflected on current and future statements
No retroactive change

22

What is unfunded accrued pension cost?

A liability recognized when the net periodic pension cost exceeds amount the employer has contributed to the plan

23

Calculate PBO

Beg PBO + service cost + interest - benefits paid

24

What is used as the Defined benefit plan discount rate

Settlement rate

25

Treatment of multiple defined benefit plans

Aggregate all overfunded plans as no current asset ; aggregate all underfunded plans as noncurrent liability

26

Journal entry to record underfunded plan

DR OCI

CR pension liability

27

What is included in special termination benefits

Lump sum payments and PV of future payments

28

What is included in the PBO reconciliation

Service cost
Benefits paid
Interest cost
Contribution by plan participants
Actuarial G/L
Plan amendments
Divestiture and settlements
Special termination benefits

29

Disclosure of health care costs for pension

Must disclose the effect of 1% increase or decrease in health care costs

30

Calculate expected future service method

Group employees according to time remaining to retirement. Multiply the number in each group by the period to retirement. Divide into # of employee service years