Term
|
Definition
DR: Deferred Charge
CR: Cash |
|
|
Term
|
Definition
DR: Cash
CR: Unearned/Deferred REv |
|
|
Term
|
Definition
Dr: Cash
CR: Unearned Royalty |
|
|
Term
|
Definition
DR: Unearned Royalty
CR: Earned Royalty |
|
|
Term
| How is a patent amortized? |
|
Definition
| Shorter of is estimated life or remaining legal life |
|
|
Term
| Accounting for R&D Costs GAAP vs. IFRS |
|
Definition
| GAAP: Expense unless materials, equipment, or facilities that have alternate future uses. Or, R&D costs undertaken on behalf of others. IFRS: Expense research and capitalize development |
|
|
Term
| Computer Software development IFRS and GAAP |
|
Definition
IFRS: same rules as always. Expense research and capitalize development.
GAAP: Expense costs incurred until technological feasibility, capitalize costs incurred after technological feasibility |
|
|
Term
Amortization of software costs
(Software Developed to be Sold, Leased, or Licensed) |
|
Definition
annual amortization is greater of:
percentage of revenue (Total capitalized amount x (current GR for period/Total projected GR for product)
OR
Straight Line: Total capitalized amount X (1/economic life) |
|
|
Term
| Amortization of Software costs developed internally or for internal use only |
|
Definition
| expense costs up to technological feasibility, capitalize costs after technological feasibility. Capitalized costs are amortized on a Straight-Line basis. |
|
|
Term
| Impairment of Intangibles with Finite Lives |
|
Definition
step 1: determining the impairment - use undiscounted future net cash flows
step 2: amount of impairment - use fair value (discounted cash flows) |
|
|
Term
| Impairment of Intangible with Indefinite Lives |
|
Definition
| Use step 2 only: amount of impairment - use fair value (discounted cash flows) |
|
|
Term
BS presentation of Completed Contract Method
(completed contract not allowed under IFRS) |
|
Definition
cost more --> Asset
billed more --> Liability |
|
|
Term
| Percentage of Completion Method |
|
Definition
(cost incurred/total expected cost) = (work done/total expected work) = % of job earned
current asset account: cumulative costs incurred + cumulative GP recognized > cumulative billing
Current Liability:
cumulative billings > cumulative cost incurred + cumulative GP recognized |
|
|
Term
| Exchanges having commercial substance |
|
Definition
| an exchange has commercial substance if the future cash flows change as a result of the transaction. The change can either be in the areas of risk, timing, or amount of cash flows. Fair Value approach is used |
|
|
Term
| Exchanges lacking commercial substance |
|
Definition
Gains:
no boot received = no gain
boot is paid = no gain
boot is received = recognize proportional gain (<25% rule)
Boot is 25% or more of total consideration: recognize as monetary exchange
Losses:
losses should be recognized |
|
|
Term
|
Definition
| entire gain or loss is recognized for financial accounting purposes |
|
|
Term
|
Definition
1st: Income statement @ weighted avg. 2nd: BS @ yr end rate, CS & APIC @ historical, roll forward R/E 3rd: Plug Equity: AOCI Reported puFer
See page F2-51
|
|
|
Term
| Remeasurement Method (RBI) |
|
Definition
1st: Balance Sheet monetary @ yr end rate, non monetary @ historical
2nd: IS @ weighted avg, historical for BS related record
Plug: G/S so IS is at amount necessary for RE plug. Idea |
|
|
