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51 Cards in this Set
- Front
- Back
Capital Lease - Journal Entries |
DR Asset FMV/PVMLP (lower of)* CR Liability FMV/PVMLP (lower of) DR Amort (over econ life if ownership transfers/term if no transfer) CR Acc Amort DR Interest Exp CR Liability DR Liability CR Cash *Discount rate=lower of:
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Loan/Note receivable (no interest) |
If loan doesn't have interest or rate is lower than market rate for comparable loans, fair value not equal to cash consideration. FV should be estimated as PV of future cash receipts discounted using prevailing market rates |
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Inventory Valuation (ASPE) |
Lower of cost and NRV NRV = estimated selling price in ordinary course of business less estimated selling costs. Case: Bruin Car PartsReference: ASPE3031.07, .10 |
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Betterment (ASPE) |
3061.14: Cost incurred to enhance service potential of an item of PPE Service potential may be enhanced when:
Case: Fire in the Sky |
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Asset Exchange (non-monetary) |
3831: Should be at more reliably measurable of FMV of assets unless:
If meets 1 of above, should be measured at carrying amount of asset given up, adjusted by FMV of monetary consideration received/given. Case: Fire in the Sky |
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Commercial Substance |
3061.11 Non-monetary transaction has commercial substance when entity's future cash flows are expected to change significantly as a result of the transaction |
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Contingent Asset (IFRS) |
IAS 37: Should not be recognized unless realization of income is virtually certain. ASPE 3290: Should not be recognized. |
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Related Party Transactions (ASPE 3840) |
General:
Transactions in normal course of operations:
Transactions NOT in normal course of business:
Case: Lock Stock & Barrel, KinfolkReference: ASPE 3840.08-.09,.18, .22, .29 |
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Revenue Recognition - Gross vs. Net |
If agent, should report net (IFRS and ASPE) ASPE additional guidance: Acting as principal when exposure to significant risks and rewards associate with sale, such as:
Acting as agent:
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Related party transactions (IFRS) |
Recorded as normal transaction with appropriate disclosure |
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Subsequent events (ASPE 3820) |
2 Types:
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Impairment of Long-lived assets (ASPE 3063) |
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Impairment of Long-lived assets (ASPE 3063) - indicators of impairment |
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Stock options (IFRS 2/ASPE 3870) |
IFRS: measure at FMV of goods/services received, unless not reasonably measurable
ASPE: Recognize fair value of options using pricing model (e.g. Black-scholes) when employee entitled to award.
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Subsidiaries (ASPE 1591) |
>50% - presumed control 3 options available:
Can't use cost if quoted on active mkt |
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Interests in Joint Ventures (joint control - 50%) (ASPE 3056) |
No one venturer has control 3 accounting choices:
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Investments (significant influence - 20-50%) (ASPE 3051) |
2 choices:
*if quoted in active mkt, must use equity or FMV |
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Financial Instruments (ASPE 3856) |
Must measure at cost unless quoted in active mkt (FMV). Can designate FV measurement at recognition |
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Asset Retirement Obligation (3110) |
Should be recognized when reasonable estimate of amount of obligation can be made.
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Revenue Recognition - Separately identifiable |
IFRS (IAS 18.13); ASPE 3400.11 The recognition criteria in this Standard are usually applied separately to each transaction. However, incertain circumstances, it is necessary to apply the recognition criteria to the separately identifiablecomponents of a single transaction in order to reflect the substance of the transaction. For example,when the selling price of a product includes an identifiable amount for subsequent servicing, thatamount is deferred and recognised as revenue over the period during which the service is performed |
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Returns |
Revenue Recognition IAS 18.16-17/ASPE 3400.21
Dash Computing |
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Warranties |
IAS 37/ASPE ?
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Interim reporting |
IAS 34/ASPE - X Minimum components:
See section for minimum disclosures Dash Computing |
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Contingencies vs provisions (IFRS) |
IAS 37 Provision:
Contingent Liability
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Contingent Liabilities (ASPE) |
ASPE 3290 Recognize when:
Disclose when:
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Accounting policy changes |
IAS 8/ ASPE 1506 Retrospective *Can only change if:
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Accounting estimate changes |
IFRS/ASPE - same Prospective only |
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Entries for % completion |
DR CIP inventory CR Cash/AP DR AR CR Billings on contract DR Cost of construction DR Construction in progress inventory CR Revenue |
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Long-term contracts - Difference between IFRS/ASPE |
If % complete not estimable: ASPE: completed contract IFRS: cost recovery |
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Revaluation Model |
IFRS only
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Sale-Leaseback (substantially same ASPE/IFRS) |
Finance lease
Operating lease If established at FMV:
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Forgivable Loan from Gov't |
IAS 20/ASPE 3800 (same) Treated same as grant as long as reasonable assurance entity will comply with terms |
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Gov't Grant |
IAS 20/ASPE 3800 (same) Recognize when reasonable assurance that:
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Borrowing costs |
IAS 23/(ASPE - Policy choice)
An entity shall begin capitalising borrowing costs as part of the cost of a qualifying asset on the commencement date. The commencement date for capitalisation is the date when the entity firstmeets all of the following conditions:
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Provisions |
IAS 37: Recognize when:
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Biological Assets/Produce |
IAS 41/ (ASPE - no separate section)
Both should be measured at FVLCTS
For change in FV: Dr biological assets Cr gain (due to change in price or physical change)
For sale: Dr cash/AR Cr biological assets (assuming already recorded @FV)
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Discontinued Operations (ASPE 3475) (IFRS 5) |
*If abandoned, don't need to go through HFS (see IFRS 5.13) ASPE: Same (clearer guidance for HFS, Disc op guidance is in definitions) Nationwide Mail, Nationwide Transportation |
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Discontinued Operations - disclosure |
Disclose a single amount in I/S = total of:
*Prior year comparatives also need to be adjusted |
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Journal Entries for Bond |
DR Cash CR Bond payable DR Bond interest expense CR Cash DR/CR bond payable (plug) |
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Types of financial instruments (IFRS) |
1. Financial instruments at fair value through profit/loss - change in FMV through profit/loss 2. AFS - change in FMV through OCI 3. HTM & Loans/Receivables - Gains/losses through profit/loss in period in which they arise |
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Financial instruments - initial recognition |
Recognize @ FMV when Co becomes party to contractual provisions |
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Financial instruments - transaction costs |
Expensed through profit/loss *except if measured at cost/amortized cost (add to carrying value) |
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Financial instruments - impairment (IFRS) |
Assess @ end of each reporting period whether any indications impairment
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Financial instruments - impairment (ASPE) |
Assess @ end of each reporting period whether any indications impairment Impairment loss = highest of:
Can reverse to extent previously recorded |
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Bonuses - should they be accrued? |
"An entity shall recognize financial asset/liability when they become party to the contractual provisions" If amount not known at year end and subject to discretion of the BOD, may not be liability @ y/e *But may be constructive obligation if they always pay |
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PPE - separate components |
Significant separable component parts should be separated when practicable and when estimates can be made of useful life *should use appropriate useful life |
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PPE - Derecognition |
IFRS only If entity replaces, then it must derecognize the carrying value of the part replaced |
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Preferred shares -equity or liability |
IAS 32: Preferred shares that provide mandatory redemption for fixed/determinable amt or gives holder right to require issuer to redeem for fixed/determinable amt =Liability Same for ASPE but hidden in appendix A26 |
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Convertible Debt (ASPE 3856) |
Classify component parts as liability or equity based on substance of contractual arrangement Acceptable methods:
*Method 2) required under IFRS |
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Convertible Debt - How to calculate |
Payments split and classified as interest/dividends in proportion to liability/equity |
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Calculate the balance of a bond at a point in time |
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