Term
| Revenue Recognition occurs (GAAP) |
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Definition
1. Persuasive evidence of an arrangement exists.
2. Delivery has occurred or svcs have been rendered
3. price is fixed and determinable
4. collection reasonably assured |
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Term
| Revenue recognition (IFRS) |
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Definition
1. Revenue and costs incurred for transaction can be measured reliably
2. proable that econmic benefits will flow to entity
3. entity has transferred risks and rewards
4. does not retain managerial involvement to the degree assoc. with ownership or ctrl |
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Term
| Revenue recognition is deferred if: |
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Definition
These conditions NOT met:
1. sales price substantially fixed at sale.
2. buyer assumes all risks of loss
3. buyer paid consideration
4. product sold is complete
5. amt of future rtns can be reasonably estimated. |
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Term
| Franchisor accounting (revenue) |
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Definition
PV of contract amounts!
1. initial franchise fees-revenue when substantially performed
2. continuing franchise fees-revenue when earned. |
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Term
| Internally-developed Intangible assets: exceptions |
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Definition
1. legal fees rel. to successful defense
2. registration or consulting fees
4. design costs
5. direct costs to secure asset |
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Term
| Research and development costs (IFRS) |
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Definition
research costs are expensed, but devlopment may be capitalized if:
1. technological feasibility established
2. intends to complete intangible
3. ability to sell or use intangible
4. generate future economic benefits
5. adequate resources are available to complete development and sell/use asset |
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Term
| Intangible assets acquired in arms length transaction--how to capitalize? |
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Definition
1. amt of cash disbursed or FV or other assets dist.
2. PV to be paid for liabilities incurred
3. FV of consideration received for stk issued. |
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Term
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Definition
| may be valued under cost(basically US gaap) or evaluation model (recognized at cost and revalued to FV, then amortized. revaluations performed regularly so that CV doesn't differ materially from FV @ reporting pd end) |
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Term
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Definition
| Intangibles are intitially recognized at cost, then revalued to FV @ subsequent revaluation date and amortized. revaluation. Anything below original cost=IS. Anything over original cost= OCI |
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Term
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Definition
Initial franchise fees=intangible asset and amortized over greater of expected life or benefit
-Continuing franchise fees-expense
-start up costs-expense |
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Term
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Definition
| design changes, troubleshooting, marketing research, quality control testing, reformulation of compound |
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Term
| Computer software to be sold, leased, licensed |
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Definition
| Expense until technological feasibility, capitalize after tech feasibility and amortize over greater of %revenue or S/L when released for sale. |
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Term
| Computer Software developed Internally for obtained for internal use only |
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Definition
Same as software for sale, but just use S/L amortization.
If later sold, use cost recovery system. |
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Term
| Impairment of intangibles other than goodwill (GAAP) |
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Definition
1. compare CV to UNDISCOUNTED CF
2. CV to FV (or discounted CF if no FV), impair |
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Term
| Goodwill Impairment (GAAP) |
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Definition
| calculated at reporting unit lvl |
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Term
| Completed Contract method |
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Definition
GAAP only. Can be used when
1. difficult to estimate the cost of contract in progress
2. many in progress and equal number completed each year
3. short duration, collections not assured |
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Term
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Definition
| will cause change in future cash flows. can either be in areas of risk, timing, or amount |
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Term
| Nonmonetary exchanges: Have commercial substance |
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Definition
Recognize all gains and losses.
1. G/L: FV received-BV given
2. Basis of new: FV given up + Cash given up |
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Term
| Nonmonetary Exchanges: lack commercial substance |
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Definition
1. Recognize gain to extent of boot (25% rule)
2. Recognize all losses |
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Term
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Definition
| Monetary assets and liabilities are fixed in denominated dollars regardless of inflation |
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Term
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Definition
| fluctuate in value with inflation |
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Term
| Criteria for functional currency |
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Definition
1. foreign ops are self contained and integrated within the country
2. day to day ops don't depend on parent's functional currency
3. local economy isn't highly inflationary (100% over 3 yrs) |
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Term
| Remeasurement vs translation |
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Definition
remeasurement is INTO functional currency.
translation is into Reporting currency |
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Term
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Definition
1. BS: Monetary items: current yr rate
nonmonetary items: historical
IS: BS-related: historical
nonBS-related: weighted avg
Plug G/L to NI to get RE right (real G/L) |
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Term
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Definition
IS: weighted avg
BS: Assets and liab: current yr
CS/APIC: historical
RE: roll fwd
plug is to net income (to balance) |
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Term
| Personal financial statements |
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Definition
statement of fnan condition
stmt of changes in net worth
*liabilities at est current amt
**life insurance loans payable are netted against cash surrender value
***vested pension plan reported at FV |
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