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21 Cards in this Set
- Front
- Back
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Per US GAAP, what are the three components to Relevance?
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(PRE-FEED-TIME)
Predictive Value, Feedback Value, and Timeliness |
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Per US GAAP, what are the three compenents to Reliability?
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(NRV)
Neutrality, Representational Faithfulness, and Verifiability. |
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What are the second qualitative characteristics to both Relevance & Reliability?
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Comparability, and Consistency.
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Comprehensive Income includes all changes in equity other than "owner" sources. These items affect Comp. Income except for:
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(DENT)
Derivative cash flow hedges Excess adjustment of Pension PBO and FV of plan assets at year end Net unrealized gains or losses on "A4S" securities Translation adjustments for foreign currency |
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What are the two capital maintenance concepts?
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Physical Capital Maintenance concept-only recog. events when asset is sold or liability is settled
Financial capital maintenance concept - recog. event as a change in value |
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Name 5 Monetary Terms. Historical Cost is one.
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-Replacement Cost
-Fair Market Value -Net Realizable Value -Present Value |
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US GAAP is "rules" based and IFRS is considered:
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"Principles" based. It sets general principles and allows for professional judgement.
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IASB Framworks sets forth 4 principle qualitative characterstics of fin. stmts. What are they?
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Relevance
-Predictive Value, Confirmatory value, Materiality Reliability -Neutrality, Faithful Representation, Substance over form, Prudence, completeness Understandability Comparability |
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Fair value measurement approach involves 6 steps. What is the first?
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Identify the asset or liability to be measured
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Fair value measurement approach involves 6 steps. What is the second?
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Determine the principle or most advantageous market (highest or best use)
-Principle mkt: think NYSE -Most Advantageous mkt: max price to get asset or min price to get rid of liability --Price adj for cost to transport |
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Fair value measurement approach involves 6 steps. What is the third?
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Determine the valuation premise.
-"In-use" - used with other assets -"in-exchange" - stand alone |
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Fair value measurement approach involves 6 steps. What is the four?
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Determine proper valuation technique to measure fair value
-Market Approach -Income approach -Cost approach |
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Fair value measurement approach involves 6 steps. What is the fifth?
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Obtain inputs for valuation
Level 1, Level 2, Level 3 |
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Fair value measurement approach involves 6 steps. What is the sixth?
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Calculate the fair value of the asset
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What is the Market approach when discussing fair value measurement approach? (step 4)
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Market Approach
-uses prices and relevant informationf rom market transactions for identical or comparable assets/liabilities |
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What is the Income approach when discussing fair value measurement approach? (step 4)
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Income Approach
-uses present value techniques to discount cash flows or earnings |
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What is the Cost approach when discussing fair value measurement approach? (step 4)
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Cost Approach
-uses current replacement cost --change in method is considered a change in accounting estimate |
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For step 5 of the fair value measurement approach, what is a level 1 input?
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Level 1
Uses quated prices from active markets (stock quotes) |
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For step 5 of the fair value measurement approach, what is a level 2 input?
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Level 2
Directly or indirectly observable inputs, other than lvl 1 (yield curves, bank prime rates, interest rates, credit risks, default rates on loan) (2 similar buildings in a downtown mkt) |
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What is a level 3 input for step 5 of the fair value measurement approach?
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Unobservable inputs are used if lvl 1 or 2 are not available
(fin forecasts or expected cash flows) |
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Revenues inflows are:
(think more complex definition) |
revenues are inflows of assets or settlements of liabilities, or both, during a period as a result of an entity's MAJOR or PRIMARY operations.
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