AICPA考试要点摘录-FAR.docx

F1-standard setting, income statement, and reporting requirements1. Change in estimate-prospecting Changes in accounting principle that are inseparable from a change in estimate: depreciation method; change from the installment method to immediate recognition method because uncollectible accounts can now be estimatedChange in principle- retrospectiveChange in entity- restateE.g. Change in method of accounting for demo costs is a change in accounting principle inseparable from a change in estimate. Handled as change in estimate- prospectingChange from cash basis of accounting to accrual basis is correction of an error!Change in depreciation method is both a change in method and in estimate2. Comprehensive income excludes Owner Transaction: dividends, paid in capital10Kannual report10Qquarterly report11Kannual report of employee benefit plan40FCanadian company20Fother foreign company6Ksemi-annually report for foreign private issuers8Kmajor corporate event3&4&5filed by directors, officers, beneficial owners of more than 10% of a class of equity securities(only to show the ownership, no financial statement)3. Historical cost: operations are continuingCurrent replacement cost: optional supplemental price level financial statementNet realizable value: equipment in decision to end operations and quickly (3 months) dispose of its assets.Current reproduction cost: optional supplement price level financial statement4. Fundamental qualitative characteristics:Relevance: passing confirms money. Predictive value; conforming value, materialityFaithful representation: completely neutral is free from error. Completeness; neutrality; freedom from error5. Enhancing qualitative characteristics: compare and verify in time to understandComparability, verifiability, timeliness, understandability, cost constraint6. US GAAP Standard-setting process: exposure draftmajority vote for issuanceredeliberate on the issueaccounting standards updatemajority vote to amend accounting standard codification7. Two underlying assumptions of financial statement preparation and presentation: going concern, accrual accounting8. IASB standard-setting process: publish a discussion paper(not required)exposure draft (at least 9 members should approve for issuance)drafts the IFRSat least 9 members should approve9. Statement of position: issued by AICPA American Institute of Certified Public AccountantsStaff accounting bulletin: issued by SEC securities and exchange commissionAccounting research bulletin: no longer issued at allAccounting standards update: issued by FASB as part of the due-process activities10. Gains or losses that are unusual in nature or occur infrequently but not both, are presented as a component of income from continuing operations. 11. Formal plan to sell a division, estimate impairment loss is recognized in the current period!12. Sequence of component of income: Income Discontinued operation Extraordinary items (千万要警惕！IFRS prohibit!)Accounting principle change (cumulative effect of a change in accounting principle is reported net of tax as an adjustment to beginning RE in the earliest year presented.13. The earliest period that a component of an entity can be reported in discontinued operations is when the component meets the following held for sale criteria:14. Gross conceptrevenues and expenses; Net conceptgains and losses15. Exit or disposal costs: involuntary employee termination benefits, cost to terminate a contract that is not a capital lease, costs to consolidate facilities or relocate employees.16. Adjustment for the prior period will be reflected in beginning RE, not on the income statement. The unrealized gain on the AFS is in OCI17. Discontinued operations: Loss from operations- All 12 months even though interim plan18. Revaluation surpluses recognized when intangible assets and fixed assets are revalued in OCI, IFRS only! And revaluation loss not included. Neither gain or loss is recognized as OIC under US GAAP19.20. Related party transaction under US GAAP: should disclose transactions out of ordinary course of business. E.g. loan to officers. Not include compensation!21. Requirements for annual financial statements(under Regulation S-X): periods presented(BS 2, IS/CF 3)22. Deadline to file Large accelerated filer: 60 days (10K), 40 day (10Q)Accelerated filer: 75days, 40 day (10Q)Other: 90 days(10K), 45 days(10Q)23. Required disclosure of 10Q for companies with absence of seasonal fluctuations: the end of the preceding fiscal year in addition to the most recent quarter end.24.25. Related party transaction disclosure under IFRS: disclose transactions out of ordinary course of business, include compensation(officers salaries), not include officers expense!26. Disclosure of risks and uncertainties: nature of operations, use of estimates in the preparation of financial statements, certain significant estimates, current vulnerability due to certain concentrationsInterim financial reporting27. Interim financial reporting should be viewed as reporting for an integral part of an annual period.28. Temporary loss in market value： not recognizedPermanent loss in market value: recognized, if reverse in the following period, recognize increase29. Tax expense not recognized in last quarter should be added to current quarter30. Quantitative thresholds for reportable Segments, 10% size test: revenue, reported profit or loss, assets; 75% reporting sufficiency test. 有赚有赔分开算，看gain占赚了的比重，看loss占损失的比重是否超过10%First time adoption of IFRS:31. Opening IFRS financial statements(BS-3, Others-2, 当年，上年，上年期初)32. Adjustments go directly to RE or another category of equity at the date of transition to IFRS33. Interim financial statement: E.g. Y2 Q3 financial report should includeCash flow: Y2 Q3, Y2 Q1-Q3, Y1 Q3-Y2 Q3.Balance sheet: Y2 Q3, Y1 year end. No corresponding required!Income statement: 同Cash flow, may include Y1 Q4-Y2 Q3, Y0 Q4-Y1Q334. An entity has modified liability for its interactive data exhibits for a period of 24 months from the time the filer first is required to submit interactive data files.F2-maching foreign currency accounting1. Cost to defense an intangible asset(legal fee), successful-capitalized, unsuccessful-expensedUnder US GAAP R&D expensed, exception: Computer software (sell to outsiders) - technological feasibility, capitalize - greater of straight line or current year revenue/estimated total revenueExpense costs: planning, design, coding, testing until technological feasibilityCapitalize costs: coding, testing, producing product masters after feasibility Inventory: duplicate, packagingComputer software for internal use straight line ; change mind to sell, recover cost first, then recognize revenueUnder IFRS, development can be capitalized.2. Revaluation of asset: below the costincome statement; above the costOCI3. All organizational costs (star-up costs) should be expensed when incurred.4. Goodwill impairment :lecture 1 Page 24,255. Completed contract method: revenue not recognized until the project is complete if profit; loss recorded in full when it is discoveredInstallment method: calculate gross profit rate every year, recognize deferred gross profit= profit rate*installment receivable6. Under IFRS: exchange of similar assets are not regarded as exchange with commercial substance, no gains are recognized! 7. Foreign currency: translation adjustments-OCI, remeasurement income statement8. Amortization of capitalized software costs equals the greater of straight-line amortization or sales revenue from the software for the period/total projected sale9. Under US GAAP, R&D is expensed, the cost of patent= costs of registering the patent. Amortization period = lesser of legal life or economic life10. Software for internal use, unrelated to production is not considered R&D11. Sales revenue includes tax!12. Reversal of impairment losses is prohibited under US GAAP unless the asset is held for disposal; IFRS allows reversal13. Equipment in R&D: for current project onlyinclude all, for current and future project- depreciation expense included14. Revaluation gain: reverse the revaluation loss first on income statement, then recognized in OCIRevaluation loss: always in OCI15. Goodwill impairment test at which level:US GAAP: reporting unitIFRS: cash-generating unitLoss on goodwill impairment is booked on the income statement16. Gross profit=net sales-COGS17. Installment receivables at year-end on current year sales lead to deferred gross profit18. 区分installment sales method & cost recovery methodInstallment sales method: it is doubtful that the amount due will be collected (impossible to establish a reasonable bad debt percentageCost recovery method: collection is in doubt19. Exchanges lacking commercial substance:No boot, no gain; boot paid, no gain; boot received 25%, recognizedNew basis = FV of new assets unrecognized gain = BV of old asset + gain boot倒挤出来的20. Exchange with commercial substance:Always recognize gains and losses; as sale, G/L = FV of asset- BV of assetNew basis = FV of old asset + boot = FV of asset received21. Current cost amounts of inventory and PPE are measured at current cost or lower recoverable amount at the measurement date22. G/L resulting from foreign exchange transactions that are an extension of the parents domestic operations are income from continuing operations23. Foreign currency transaction gain/loss is calculated on the balance sheet date with comparison to the spot rate on 12/3124. Translation(current) method：all income statement items are translated using he weighted-average exchange rate.If a foreign subsidiarys local currency is the functional currency and the economy of the foreign entity is not highly inflationary, then the translation method is used.25. Income tax-basis financial statements differ because it recognize certain revenues and expenses in different reporting periods26. On personal statement of financial condition, estimated income taxes equals the difference between fair values and tax bases of assets and liabilities27. Other comprehensive bases of accounting (OCBOA) are non-GAAP presentations that have widespread understanding and support, including cash basis, tax basis, a definite set of criteria have substantial support, regulatory basis.Cash flow report not required!28. Cash basis financial statements use the Modified Cash Basis Financial Statements to include accrual basis accounting. Common modifications include:29. Personal Statement of financial condition: Assets are reported at estimated fair value30. R&D costs of any nature undertaken on behalf of others under a contractual arrangement dont expense; costs of R&D performed by another company is also expensed as R&D cost31. The equipment can only be capitalized if it had an alternative use! If the equipment can be used only for certain project, it should be expensed right away32. Annual premium paid is recognized as insurance expense over time33. Under installment method, the amount of deferred gross profit is a contra account to AR34. Royalties received should be reported as revenue in the period earned not evenly over the life of the agreement. B/c royalties are usually a percentage of actual sales generated unevenly over the life of the agreement35. Current cost financial statement report holding gains and losses on all accounts(期初期末资产差额)Price level index is not “current method”, it is used for “historic/constant dollar”36. disclose information about the effect of changing prices should report in supplementary information to the financial statements37. translation loss from wholly owned foreign subsidiary is not included in net income, rather, in OCI-shareholders equityinstallment method，外汇交易损失不熟悉38. gains from remeasuring a foreign subsidiarys financial statements from the local currency should be reported as part of continuing operationsF3 marketable securities and business combinations企业合并会计1. Equity method： should have the ability to exercise significant influence2. Acquisition method下：In process R&D Carry as assets!3. GAAP Full goodwill method: Paid/%-total FV noncontrolling interest includes goodwillIFRS Part goodwill method: Paid-total FV*% noncontrolling interest doesnt include goodwill4. Bargain purchase(negative goodwill) is credited to gain,not goodwill5. 计算支付对价的时候，要把当期发生的成本费用化！不要资本化！关联方交易会计6. Intercompany sales计算方法，两家公司的revenues相加-合并报表上的revenues7. 母子公司之间买卖股票要100% eliminate！8. 对被投资公司持股50%以下，Receivables and payables to the investee要单独列报，但不用consolidate合并。9. No intercompany receivables should be report on consolidated balance sheet.10. 关联方交易中的Carrying amount of inventory: cost = revenue*profit margin cost*% held in inventory = Carrying amount of inventory关联方交易的利润：卖给第三方的，调减 COGS，留在企业内部的，调减inventory11. Bonds集团内公司从外部购买了关联企业的债券，视为债券回购，立即确认利得损失=买价-账面值，利得计入gain，损失调retained earnings。之后interest, amortization of discount or premium 都要 eliminate如果母公司发行，子公司购买，就没有弄controlling interest什么事，如果子公司发行，母公司购买，就要按比例确认controlling interest.12. Common stock 集团内公司从外部购买了关联企业的股票，视为库存股交易，不确认利得损失公司不能从买卖自己的股票中获利。13. Income consolidation： 先把sales加起来，再eliminate internal transaction。Cost同理14. 母公司卖给子公司equipment，抵消分录直接credit equipment差额母公司卖给子公司inventory， 抵消分录把sales全部抵消，未卖给第三方部分调减inventory cost，剩下部分调减COGS15. Intercompany transactions associated with I/S 还包括dividends payment！AFS16. Available for sale: no gain or loss! Only OCI!Unrealized lossIf temporary: OCI Valuation accountIf not temporary: realized lossCost of individual security17. Sale of security:Trading securities: realized gain/loss= selling price-(orginal cost +/- unrealized gain/loss previously recognized) AFS:realized gain/loss= selling price-orginal cost 18. Trading securities: when Mark to Market, use “Valuation Account”, rather than “trading securities-A”19. If the decline in value is other than temporary, recognize impairment loss, debit HTM securitiesF4-working capital and fixed assets1. Basic rule: estimate doesnt count, wait until real. Estimating uncollectible accounts receivable: direct write-off method = wait until real, is not used under GAAPAllowance method:(1)percentage of sales 预估多少坏账就记多少bad debt expense, 贷记allowance for uncollectible accounts(2)percentage of accounts receivable at year-end method. 期末坏账准备已定，当年的bad debt expense倒挤(3)aging of receivables method 按账期分类，估计不同的坏账额，加起来是期末预估值，当年的bad debt expense倒挤2. Factoring accounts receivableWithout recourse: CashDue from factorLoss on sale of receivableAccounts receivable3. Page 17 transfers and servicing of financial assets 没看！4. Discounting a note at a bank: interest that the bank wants = (Face value+interest)*interest rate5. Under IFRS, individual fixed assets cannot be revalued alone. If it is revalued, then the entire class of fixed assets to which that asset belongs must be revaluedRevaluation of fixed assets is only under IFRS!6. Fixed asset impairment loss:Assets held for use: impairment loss = FV or PV future net cash flow-net carrying value (restoration prohibited)Assets held for disposal: impairment loss = FV or PV future net cash flow-net carrying value + cost of disposal (restoration permitted)7. Allowance method is consistent with accrual accounting, direct write-off is not8. Certificate of deposit:存款单， asset9. Issue common stock to pay the short term debt, subsequent to the end of the year but before financial statement issuance, should offset short-term liabilities right away!10. Collection of an account previously written off:JE#1: restore the account previously written off:Accounts receivableAllowance for uncollectible accountsJE#2: record the cash collection on the account:CashAccounts receivableSo, no effect on accounts receivable, increase allowance!11. Deferred tax liability arising from depreciation is reported as noncurrent liability12. Post-dated check(填迟日期支票) is not included in cash and equivalents because it is dated after the balance sheet date; cash in bond sinking fund (债券偿债基金) account is not included13. Current ratio(流动比率) = current assets (cash, AR, inventory)/current liabilityQuick ratio(速动比率)14. Estimate uncollectible accounts expense follows the accounting concept of matching15. Goods not received from FOB destination does not increase accounts payable16. When a company pledges receivables in return for a loan, the assigning company will retain title to the receivables and will use the proceeds collected from the receivables to repay the loan17. There are only two reconciling items for the balance of Bank statement: deposits in transit & outstanding checks; service charges, NSF checks, credit memos, interest income, errors made by the company is not included!18. balloon note: 前期周期性少量付款，剩余的期末大笔付清。Line of credit: 信用额度19. price index = ending inventory at current year cost/ending inventory at base year cost20. freight-out is a selling expense, not an item that is capitalizable as inventory21. the dollar value LIFO method adjusts inventory retail prices and ending inventory cost for price-level changes22. consignment sale: advertising paid is fully expensed, freight cost is allocated pro rata23. total interest for constructing a building to capitalize = smaller of total interest incurred, avoidable interestAvoidable interest = weighted average amount of accumulated expenditures = total expenditures/2*interest rate on special bor