Flashcards in Interim Financial Reporting Deck (23)
When are interim FS issued?
In between annual reports (ex. the 10-Q)
Interim statements (are/are not) audited?
Certain methods used for interim that are not allowed for annual. (Such as use of the gross profit method to calculate inventory) TF
A "discrete view" of the interim financial reports views each report as an integral part of the annual report. TF
False, discrete views are stand alone reports
All revenues are recognized on the same basis as the annual reports. TF
COGS is may be recognized on a basis other than the basis used in the annual report. TF
Exceptions to interim COGS reporting include:
1. Gross profit method may be used to estimate ending COGS
2. LIFO liquidation layer should be charged to COGS
3. Temporary declines in inventory market value not recognized, permanent yes
4. Planned mfg variances should be deferred if expected to be absorbed by year end
General expenses are reported using the same basis as the annual reports. TF
Income taxes and Discontinued Ops have no allowed exceptions to in regards to interim reporting. TF
Income taxes are reported using the_____ ______ ______ tax rate.
Gradual annual effective
Gains and losses on disposal of equipment are to be allocated to more than one period (integral view). TF
False, discretely presented
Extraordinary gains are always to be discretely presented. TF
True, and recognized in the quarter they occur
Expenses which clearly benefit more than one interim period may be allocated among periods benefitted (including property taxes). TF
Overall, interim financial reporting should be viewed primarily as a discrete presentation. TF
When determining allocation of expenditures and taxes it is important to remember which concept?
The period in which the benefit was used, is the period measured in comparison to the whole. (3 months, 6 months, 9 months, etc.)
Write downs of inventory, and inventory recoveries are recorded in the interim periods in which they occur. TF
LCM is _____ for interim reporting in the decline is expected to be recovered by year end.
Treatment for accounting principle changes and error corrections:
Retrospective approach, RE beg bal adjustment, restate previous periods within annual presentation
IFRS interim reports are based on an integral view while US reports are based on the discrete view. TF
False, IFRS discrete, GAAP integral. (key) IFRS is in general more restrictive in regards to allocative matters because of this.
IFRS cannot defer cost variances if recovery is expected. TF
True, not at all
IFRS does not mandate interim financial reporting. TF
Foreign tax rates and capital gains are taken into consideration when estimating the effective tax rate for interim reporting. TF