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Details Title: Intermediate III, Test III Description: Cash Flows, International Accg Stds Total Flash Cards: 49 Created: 12/09/2006 13:10:25	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term How often are interim financial reports prepared? Definition Quarterly. Term On interim reports, the emphasis is on what part of the financial statements? Definition Income components. Term What is the major issue that interim financial reporting faces? Definition Is each period different from the rest of the year or a partof the annual part of the year. (Discrete vs Integral View) Term APBO Generally Adopts the _____ Viewpoint of Interim Reporting Definition Integral. Term Interim Reporting: When are revenues recgnized? Definition On the same basis as for the full year. Term How are period costs allocated for interim financial reporting? Definition Allocated on basis of time, benefit received, sales, etc. They are flexible, but subjective. Term How should you estimate COGS for interim financial reporting? Definition Gross profit method Term For temporary liquidation of LIFO, what should you use for valuation? Definition Current replacement cost -- only if product is to be replaced by year end. Term What tax rate should be used for Interim Fiancial Reporting? Definition Estimated annual effective tax rate -- cumulative ITE to date minus any ITE previously recorded. Term Should a company disclose EPS for interim financial reporting? Definition Yes -- both basic and diluted. Term SFAS 131 requires _____ and ____ segmental data for ublicly held companies Definition Interim, annual Term How must a company determine the operating segments it is involved in? Definition By the management approach -- how management segments the company internally in order to make operating decisions and assessing overall performance. Term What are the three requirements for segmental disclosures? Definition 1. Revenue must be at least 10% of the combined revenues (includes unaffiliated and intersegment sales) 2. Profit (or loss): at least 10% of the greater of the combined profit of all operating segments. [includes everything inetrnally associated with the segment including sales, interest revenue/expense, investment income, gains/losses, taxes, etc.... excludes any general corporate expenses not internally allocated) 3. Assets: At least 10% of the combined assets of all operating segments - excludes general corporate assets not allocated to segments. Term What is the limitation of segmenting? Definition Total revenue of all reportable segments must be at least 75% of total consolidated revenue (excluding any intersegment sales). Term What are the required disclosures of segmental disclosures? Definition 1. General information about each operating segment 2. Segment profit, including information on all sales (external and intersegment), interest revenue/expense, depreciation, investment income, taxes, extraordinary items. 3. Segment assets 4. Infrmation about products and geogrraphic areas 5. Sales to major customers, if at least 10% of total company revenues 6. Reconciliations of segment totals to corresponding enterprise totals. Term Working Capital Definition CA - CL Term Current Ratio Definition = CA / CL Term Quick Ratio Definition (Cash+ s-t investments + receivables) / CL Term AR Turnover Definition net credit sales/average net AR Term Inventory Turnover Definition CGS/Avg Inventory Term Rate of Return on Assets Definition (income/average total assets) comes ouut to be a % Term EPS Definition (net income - preferred stock divident)/weighted average shares of CS Term Book Value Per Share Definition CS Equity/shares of CS outstanding Term Debt to Equity Definition total liabilities/total equity Term Name the two types of price changes Definition General: Overall level of prices Specific: Market Value changes Individual goods and services Term General Price Level Indicies Measure...? Definition Overall inflation Term Constant Dollar Accounting adjusts only for...? Definition The effect of inflation. Term Specific Market Value Changes effect a firms...? Definition Individual assets and liabilities Term Crrent cost accounting Definition Adjusts for specific market value changes Term What are Monetary Assets? Definition All claims involving fixed number of dollars, regardless of the level of inflation. monetary assets -- cash and receivables, both short and long term. monetary liabilities -- most liabilities are monetary Term Are revenue and expenses monetary or non monetary? Definition Non-monetary if related to nonmonetary assets/liabilities. Term Purchasing power gains and losses arise from...? Definition Holding monetary assets and liabilities -- gains if have a liability, losses if hold monetary assets. Term Name the advantages of Constant Dollar Accounting Definition Greater comparability; reliable data because based on historical cost; new inforamtion; and income and asset amounts are mroe meantingful and easier to understand. Term What are the disadvantages to constant dollar accounting? Definition Cost/Benefit (if inflation isn't material); CPI-U is inappropriate for business; need current cost, not adjust historical cost; opposed by IRS and management; purchasing power gain may be misleading. Term Current costing: Revenues minus expenses at current cost = ? Definition Operating profit Term Asset's Current Cost - Historical Cost = ? Definition Holding Gain or Loss Term Name three different variations of current value: Definition Current Cost, Current Selling Price, Net Realizable Value Term The FASB says to use ________ or ____ for current ccost Definition Lower of Current Cost or NRV Term Advantages of Current Cost Accounting: Definition more relevant B/S valuation; separates holding gains and losses from operating profits; better future cash flow indicators. Term Disadvantages of Current Cost Accounting: Definition subjective and therefore not reliable; difficult to adjust for technological change; current entry prices are not always relevant. Term SFAS 89 Says that Supplemental Disclosures for Constant Dollar/Current Cost Accounting...? Definition are optional. Thse disclosures indicate purchasing power gains/losses; current cost for intbentory and PP&E; current cost income; holding gains and losses. Term What is financial capital maintenance? Definition Current GAAP -- historical costing. Term In a merchandising transaction, one must record... Definition using the current exchange rate at the date of transaction. two current/spot rates exist -- they are a buying rate and a selling rate. Term A financing transaction results from: Definition Delaying Local Currency Unit receipt or payment. Exchange rates usually fluctuate and as a result, there is a transaction gain or loss. This is caused by remasurement of LCUs into dollars at: 1. end of acg period 2. settlement of the receibable or payable Term Explain a fair value hedge Definition Hedge of a foreign currency credit sale of merchandise; exposed asset position is an excess of assets denominated in FC over liabilities denominated int eh same foreign currency. -- exchange g/l from receivable offsets exchange loss or gain from payable, if the hedge is effective - difference between spot and futures rate is called a discount -- represents cost to company of transferring risk to a bank. Term Explain a cash flow hedge Definition - anticipated future inventory purchase or sale with a foreign company. - no receivable or pay in foreign currency is recorded on books at time of contract. - any exchange gain or loss is deferred -- OCI Term Speculating in foreign currency exchange rates effects ____ right away Definition income.