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Who is the accounting standard codification single source of GAAP?
What is the Authoritative Literature in the codification? (FEDPRIA)
- Emerging Issues Task Force
- Derivative Implement Group Issues
- Accounting Principles Board Opinions
- Accounting Research Opinions
- Accounting Interpretation
Who issues IFRS standards?
What are the two pervasive constraints(US)?
What are the three pervasive constraints(International)?
- Cost Benefit
- Balance between qualitative characteristics
What are the primary qualities of decesion usefulness?
- Revelance-Pass Feels Terrific
- Predictive Value
- Feedback Value
- Nobody Belies on Financials unless Verfied
- Represenation Faithfulness
What are the secondary characteristics?
What is the presentation order of an Income Statement
Income from Continuing Operations(Gross)
Income from Discontinued Operations(Net)
Acumulative Effect of Change in Accounting Principles(Net)
What is included in Discontinued Operations? When?
- Impairment Loss
- Gain/Loss from Actual Operations
- Gain/Loss on Disposal
What is a component under GAAP?
Lowest level of an entity for which operations & cash flows can be clearly distinquished both operationally and Financially
- Operating Segment
- Reporting Segment
- Reporting Unit
- An Asset Group
What is a component under IFRS?
Major line of business or geographical areas
Subsidiary acquired exclusively with a view to resale
What is the criteria for 'Held for Sale'(GAAP)?
- All Criteria must be met:
- Mngt commits plan to sell component
- Available for immediate sale
- Active Program to locate a buyer has been initiated
- Actively Marketed
What additional criteria for 'Held for Sale' (IFRS)?
Before can be classified as 'Held for Sale' individual assets and Liabilties of component must be measured with applicable standards
GAINS/LOSS must be recognized
IFRS ONLY - NOT GAAP
When should results from operations be reported in discontinued operations?
- Component has been disposed of
- Is classified as 'Held for Sale'
What items should be included in discontinued operations for a period?
- Results of operations
- Gain or loss on Disposal
- Impairment Loss
- NET OF TAX
- All booked period incurred
Should discontinued operations continue to be depreciated/amortized?
What else must be recoginized for discontinued operations under GAAP?
- Involuntary Employee termination
- Costs to terminate contracts(Rent etc.)
- Obligating event has ocurred
- Results in a present obligation
- Little or no discretion to avoid the future transfer of assets
How do you recogize Extraordinary Items?
Unusual and Infrequent(GAAP)
Not recognized for IFRS
What are the accounting principle Changes and how are the handled?
- Changes in Accounting Estimate
- Handle prospective - don't restate
- Changes in Accounting PrincipleHandle retrospective
- Changes in Accounting EntityRestate
When there is a change in accounting Principle how do you handle retrospectively(IFRS)?
Must present 3 BS and 2 of all other FS
What are the exceptions to Accounting Principle changes?
- If impractical to Calc
- LIFO to FIFO
Beg Inv of the year of change is the first FIFO Layer
What is change in Accounting Entity?
Only recognized by GAAP
Occurs when entity being reported has changed composition
If occurs in current year all previous FS should be restated
Full Disclosure required
I.e. consolidated or combined FS presented in place of Individual companies
How do you handle error corrects in FS?
Correct info on FS if statement presented otherwise adjust R/E
under IFRS Only if impracticak to determine cumulative restate prospectively
What is Comprehensive Income and what are they?
Non-Owner transactions which are closed to the BS at period end
- Pension Adjustment
- Unrealized gains or losses
- Foreign currency items
- Effective portion of Cash flow hedge
- Revaluation Surplus(IFRS Only)
How is comprehensive income displayed on the BS?
- Net Income
- +Other Comprehensive Income(PUFER)
- Comprehensive Income
What types of companies does Comprehensive Income apply to?
Only FOR profit
Should not be reported on per share basis
Where should comprehensive Income be reported?
Single Statement of Comprehensive Income + Net Income
Income statement followed by seperate statement of Comprehensive Income
A statement of changes in Equity(US only)
How is the section of Stockholder Equity displayed on the BS?
- Capital Stock
- Pref Stock
- Common Stock
- Paid in Capital in excess of PAR
- Accum other Comprensive Income
Treasure Stock at Cost
What does IFRS require as a note in the FS?
Footnotes for IFRS?
requires explicit and unreserved statement of compliance
requires disclosure of judgement and estimates that mngt has amde in the process of applying accounting policies
- Loans to officers and officers salaries disclosure
What does GAAP require as a note in the FS?
Footnotes for GAAP?
Requires disclosure of significant estimates
- Off BS transactions
- Pensions plan descriptions
- Discontinued segments
- Loans to officers
Who requires Interim Financial reporting?
What is the minimum reporting requirements under IFRS?
- Condensed BS
- Condensed Comprehensive Income
- Condensed Changes in Equity
- Condensed Cash Flows
How are taxes Calced under IFRS/GAAP?
IFRS allows effective tax rate to be estimated
GAAP Enacted rate only
Who uses segment reporting?
Public Companies only
What is a reportable segment?
- 10% size test
75% reporting efficiency test
segmented cash flows not reported
under IFRS and GAAP
What is Fair Value?
- GAAP standardized definition except for
- Share based compensation
- Inventory pricing
- measurements based on specific objective
- FV measurements for used for lease classification measurements
FV does not include transaction costs but does include transportation costs
IFRS has not standardized FV
How do you measure Fair Value?
Use principal market with greatest volume for FV
Use most advantageous market if no principal market exists(Net of transaction costs)
What is the Fair Value Measurement Framework?
GAAP established for measuring FV
- Market Approach - assets or liabilties
- Use identical or comparable assets
- Income Approach - assets or liabilities
- convert to one future amount including cash flows for discounted amount
- current replacement cost of Assets
What is the hierarchy of Inputs?
Level 1(Most reliable) - Commodity in active market
Level 2 - Not active market
- Level 3 (Least Reliable) Mngt Inputs
- Unobservable Inputs
What must be included for first time adoption of IFRS?
- 3 BS
- End of current period
- End of prior period
- Beginning of Prior Period
- 2 IS
- 2 CF's
- 2 Changes in Equity
Book Adjustments to R/E
- How transition from GAAP to IFRS affected reported financial position, performance and cash flow
- reconciliation from GAAP to IFRS
- reconciliation of total comprehensive income
Use lower of cost or NRV for Inventory
- Opening IFRS BS uses FV for:
- financial Assets
- Fixed Assets
- Investments in Joint Ventures
What are the SEC Reporting Requirements?
11k -Annual report of employee bene plan
- 20F Foreign issues similiar to 10k
6k - Foreign private issuers
8k - Major Corporate events
Forms 3,4,5 Owning more than 10%
Reg 2-x form and content of requirements for interim and annual financial statement to be filed with SEC
What are the requirements for annual FS?
- 2 BS
- 2 IS
- 2 equity
- 3 CFs
- 2 BS
- 2 IS
- 2 Equity
- 2 CF
Under US GAAP is the cumulative effect of an inventory pricing change on prior year earnings report on the FS for LIFO to Weighted Average?
Yes. Only when going TO LIFO is an adjustment made to R/E
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