Basic Theory and Financial Reporting D. Financial Statements
A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
Cash Basis Financial Statements
The only asset is cash, revenue is recognized when cash is received; and expenses are recognized when they are paid.
Change in Accounting Principle
Change from one generally accepted accounting principle to another.
Constant Dollar Accounting
A method of reporting financial statement elements in dollars which have the same purchasing power.
Correction of an error
A correction of a material error from a prior period.
A valuation technique that reflects the amount that would be required currently to replace the service capacity of an asset.
Cash and other assets or resources that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.
Current Cost Accounting
A method of valuing and reporting assets, liabilities, revenues, and expenses at their current cost at the balance sheet date or their use or sale.
Obligations whose liquidation is reasonably expected to require the use of existing resources properly classified as current assets, or the creation of other current liabilities.
Results from disposal of a business component.
Disount Rate Adjustment Technique
A present value technique that uses a risk-adjusted disount rate and contractual, promised, or most likely cash flows.
Expected Cash Flow
The probability-weighted average of possible future cash flows.
An unusual and infrequent event which has material effects.
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market paricipants at the measurement date under current market conditions.
Fair Value Option for Reporting Financial Assets and Financial Liabilities
An election can be make to value certain fiancial assets and liabilities at fair value.
Prospective financial statements that present the knowledge and belief of responsible party in terms of expected financial position, results of operations, and cash flows.
Prospective financial statements that present the knowledge and belief of responsible party, based on one or more hypothetical assumptions, the enterprise's financial position, results of opertations, and cash flows.
Registration statement for US/foreign companies.
Information about material events for US/Foreign companies.
Annual report for US/foreign companies.
Highest and Best Use
The use of nonfinancial assets by market particpants that would maximize the value of the asset of the group of assets and liabilities within which the asset would be used.
A valuation technique that converts future amounts to a single current amount. The fair value measurement is determined on the basis of the value indicated by current market expectations about those future amounts.
Level 1 Inputs
Quoted prices in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
Level 2 Inputs
Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 Inputs
Unobservable inputs for the asset or liability.
A valuation technique that uses prices and other releveant informaton gererated by market transactions involving identical or comparable assets, liabilities, or a group of assets or liabilities, such as a business.
Modified Cash-Basis Financial Statements
Cash basis financial statements with modifications that have substantial support.
Most Advantaeous Market
The market that mazimizes the price that would be recived to sell the asset or minimizes the amount to be paid to transfer the liability taking into account transaction costs and transportation cost.
Inputs that are developed using market data and that reflect the assumptions that market participants would use when pricing the asset or liability.
A tool used to link future amounts to a present amount using a discount rate.
A market in which that greatest volume and level of activity occurs.
Prospective Financial Information
Any finacial information about the future.
Realized Holding Gains
The difference between current cost and distorical cost of asset consumed.
Describes reporting requirements for asset-backed securities.
Regulation Fair Disclosure (FD)
Mandates that publicly traded companies disclose material information to all investors simultaneously.
Describes that form and content of financial statements filed with the SEC.
Describes the requirements for information and forms required by Regulation S-X.
Regulatory-basis Financial Statements
Based on rules estalished by a regulatory agency.
Person(s), usually management, who are responsible for assumptions underlying the information.
A program that is planned and controlled by management and materially changes either (1) the scope of the business or (2) the manner in which the business is conducted.
Compensation sought by risk-adverse market participants for bearing the uncertainty inherent in the cash flows of an asset of a liability.
Events occurring after the balance sheet date but before the financial statements are issued or available to be issued.
The common risk shared by an asset or a liability with the other items in a diversified portfolio.
Tax-Basis Financial Statements
Prepared on the basis of tax laws and regulations.
Unrealized Holding Gains
Increases in the current cost of assets held throughout the year.
The risk specific to a particular asset or liability.
Unusual or Infrequent Items
An unusual or infrequent event considered to be material that does not qualify as extraordinary.