Term
| the two fundamental qualitative characteristics of useful financial information |
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Definition
| Relevance and Faithful Representation |
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Term
| Are leases eligible for the fair value option? |
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Definition
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Term
| To comply with the disclosure requirements related to risks and uncertainties, an entity is required to disclose... (4 items) |
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Definition
| the nature of its operations, the use of estimates, certain significant estimates, and vulnerability to certain concentrations of risk. |
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Term
| Faithful representation consists of... (3) |
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Definition
Free from Error, Neutrality and Completeness.
Remember that Roger is never on the FENC. |
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Term
| Relevance consists of... (2) |
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Definition
Predictive value and confirmatory value (feedback value), or both.
(Roger is P.C.) |
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Term
| 3 approaches to measure fair value |
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Definition
| (MIC), the Market approach, Income approach and the Cost approach |
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Term
| appropriate methods for recognizing expenses include...(3) |
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Definition
| cause and effect, such as charging inventory to cost of goods sold; systematic and rational allocation, such as depreciation of property and equipment; and immediate recognition, such as recognizing salaries expense as it is incurred. |
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Term
| Accumulated other comprehensive income is reported in ___ and is a component of _____. |
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Definition
| The Statement of Financial Position and is a component of stockholders’ equity |
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Term
| The 3 basic elements of financial reporting are... |
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Definition
| assets, liabilities, and equity or net assets |
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Term
| Primary Qualitative Characteristics |
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Definition
makes information useful
(Relevance and Faithful Representation) |
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Term
| Enhancing Qualitative Characteristics (Relate to both Relevance and Faithful Representation) |
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Definition
(Roger is CUT like a V)
-Comparability (Consistency)
-Understandability
-Timeliness
-Verifiability |
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Term
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Definition
-Contributions/investments by owners
-Distributions to owners (dividends)
-Comprehensive income |
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Term
| Items that affect Comprehensive Income, but not net income are... (4) |
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Definition
(DENT)
-Derivative cash flow hedges
-Excess adjustment of Pension PBO and FV of plan assets at year end
-Net unrealized gains or losses on "available-for-sale" securities
-Translation adjustments for foreign currency |
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Term
| Difference between "Recognition" and "Realization" |
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Definition
Recognition- booking an item in the financial statements
Realization- converting non-cash resources into cash or a claim to cash |
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Term
| What is Fair Market Value? |
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Definition
| the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. |
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Term
| Accumulated other comprehensive income is reported in which of the financial statements? |
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Definition
| The statement of financial position |
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Term
| The fair value for an asset or liability is defined as |
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Definition
| The price that would be paid to acquire the asset or received to assume the liability in an orderly transaction between market participants |
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Term
| a special risk of multiple and /or large defaults that are all affected by the same or common issue |
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Definition
| Concentration of credit risk |
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Term
| Which items are required to be recognized at fair value? |
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Definition
-Trading and Available-for-Sale Securities
-Impairment losses
-Assets acquired and liabilities assumed in a business combination (only recognize at fair value initially, do not adjust subsequently)
-Derivatives |
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Term
| Which items do not qualify for the fair value election? |
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Definition
-Pension plan, post-retirement, and other post-employment benefits
-Leases
-Financial instruments that are components of equity
-Share based payments and stock options |
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Term
| 4 qualities of a lease that make it a capital lease |
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Definition
-TT: Title Transfers
-BPO: Bargain Purchase Option
-75%: of its useful life
-90%: PV of minimum lease payment is 90% of FMV |
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Term
| The Economic Entity assumption |
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Definition
| the assumption that a business is separate and distinct from its owner or owners. |
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