Wiley CPAexcel Exam Review 2014 Focus Notes: Financial Accounting and Reporting

Wiley CPAexcel® Exam Review 2014 Focus Notes: Financial Accounting and Reporting......Page 5
Copyright......Page 6
Contents......Page 7
Preface......Page 9
About The Contributor......Page 11
Objectives of Financial Reporting......Page 13
Qualitative Characteristics of Accounting Information......Page 15
IFRS® and U.S. Conceptual Framework as Converged......Page 16
Elements of Financial Statements......Page 17
IFRS Elements......Page 18
Basic Rules and Concepts......Page 19
Cost Recovery Method......Page 20
Converting from Cash Basis to Accrual Basis......Page 21
Balance Sheet......Page 23
Special Disclosures......Page 27
Reporting the Results of Operations......Page 30
Extraordinary Items......Page 35
Change in Accounting Principle: Allowed Only if Required by New Accounting Principles or Change to Preferable Method......Page 37
Discontinued Operations......Page 41
Reporting Comprehensive Income......Page 43
Accounting for Changing Prices......Page 44
SEC Reporting Requirements......Page 47
Fair Value Measurements......Page 48
Fair Value Concepts......Page 49
Goods in Transit......Page 51
Inventory Errors......Page 53
Periodic versus Perpetual......Page 54
Inventory Valuation Methods......Page 55
FIFO Application—Valuing Cost Of Sales and Ending Inventory......Page 56
LIFO Application—Valuing Cost of Sales and Ending Inventory Using the Periodic Method......Page 57
Applying LIFO Layers......Page 58
Application of LIFO......Page 59
Dollar-Value LIFO......Page 63
Dollar-Value LIFO—Calculating a Price Level Index......Page 69
Lower of Cost or Market......Page 70
Gross Profit Method for Estimating Inventory......Page 71
Conventional Retail (Lower of Cost or Market)......Page 72
IFRS: Inventory......Page 73
Percentage of Completion......Page 74
Calculating profit......Page 75
Recognizing Losses......Page 76
IFRS Construction Contracts......Page 77
General Rule......Page 78
Land and Building......Page 79
Capitalization of Interest......Page 80
Costs Incurred After Acquisition......Page 81
Depreciation and Depletion......Page 82
Double-Declining Balance......Page 83
Sum-of-the-Years’ Digits......Page 84
Group or Composite......Page 85
Impairment......Page 86
Application of Impairment Rules......Page 87
Disposal of Property, Plant, and Equipment......Page 88
IFRS Impairment......Page 89
Nonmonetary Exchanges......Page 90
Initial Accounting......Page 94
Amortization......Page 95
Goodwill......Page 96
Impairment......Page 97
IFRS: Property, Plant, and Equipment......Page 98
Patents......Page 99
Research and Development (R & D)......Page 100
Software......Page 101
Bank Reconciliation......Page 104
Accounts Receivable......Page 105
Uncollectible Accounts......Page 106
Notes Received for Cash......Page 108
Calculating Interest......Page 109
Notes Received for Goods or Services......Page 110
Financing Receivables—Discounting......Page 112
Financing Receivables—Assignment......Page 113
Financing Receivables—Factoring......Page 114
Financing with Recourse......Page 115
Financial Statement Analysis......Page 116
Accounts Payable......Page 120
Contingencies......Page 121
Contingencies and Provisions......Page 122
Estimated and Accrued Amounts......Page 123
Insurance......Page 126
Royalties......Page 127
Service Contract......Page 128
Compensated Absences......Page 131
Miscellaneous Liabilities......Page 132
Lessee Reporting......Page 133
Capital Leases......Page 135
Disclosures......Page 138
Lessor Reporting......Page 139
Sales-Type and Direct-Financing Leases......Page 141
Operating Leases......Page 144
Sale-Leaseback Transactions......Page 145
IFRS Lease Rules......Page 146
Issuance—Interest Date......Page 147
Issuance—Between Interest Dates......Page 148
Bond Issue Costs......Page 153
Bond Retirement......Page 154
Convertible Bonds......Page 155
Detachable Warrants......Page 157
Disclosures......Page 158
IFRS......Page 159
Troubled Debt Restructuring......Page 160
Bankruptcy......Page 163
Pension Expense......Page 164
Pension Expense Entries:......Page 166
Disclosures......Page 167
IFRS Pension Accounting......Page 168
Types of Benefits......Page 169
Postretirement Benefit Expense......Page 170
Income Tax Expense......Page 171
Current Income Tax......Page 172
Permanent and Temporary Differences......Page 173
Deferred Tax Assets and Liabilities......Page 175
Accounting for Uncertainty in Income Taxes......Page 179
Issuance of Common Stock......Page 181
Treasury Stock......Page 183
Characteristics of Preferred Stock......Page 185
Equity Instruments with Characteristics of Liabilities......Page 186
Dividends......Page 187
Preferred Stock—Special Issuances......Page 189
Retained Earnings......Page 191
Prior-Period Adjustments......Page 192
IFRS and Owner’s Equity......Page 193
Stock Options Plans......Page 194
IFRS and Stock Options......Page 196
Quasi Reorganizations......Page 198
Disclosure of Information about Capital Structure......Page 200
Earnings per Share (EPS)......Page 202
Methods of Reporting Investments......Page 207
Equity Method......Page 208
Fair Value Option......Page 213
Marketable Securities (MES)......Page 214
IFRS Investments......Page 216
Life Insurance......Page 217
Cash Equivalents......Page 218
Format of Statement......Page 219
Inputs to the Cash Flow Statement......Page 220
Components of Direct Method......Page 222
Adjustments under Indirect Method......Page 223
Investing Activities......Page 224
Financing Activities......Page 225
IFRS and Cash Flows......Page 226
Business Combinations/Acquisitions......Page 227
Accounting for an Acquisition......Page 229
Eliminate the Investment......Page 232
Eliminating Entries......Page 236
Variable Interest Entities (VIEs)......Page 239
Push-Down Accounting......Page 240
IFRS Business Combinations......Page 241
Investments in Derivative Securities......Page 242
Characteristics of Derivatives......Page 243
Use of Derivatives......Page 244
Financial Instruments......Page 246
IFRS Derivatives......Page 248
Fair Value Option and Measurements......Page 249
Definition of Segments......Page 253
Reportable Segments—Three Tests......Page 254
Admitting a Partner......Page 256
Excess Contribution by New Partner—Bonus Method......Page 257
Excess Contribution by New Partner—Goodwill Method......Page 258
Contribution Below New Partner’s Capital—Bonus Method......Page 259
Contribution Below New Partner’s Capital—Goodwill Method......Page 260
Retiring a Partner......Page 261
Payment Exceeds Partner’s Balance—Goodwill Method......Page 262
Partnership Liquidation—Five Steps......Page 263
Foreign Currency Transactions......Page 264
Forward Exchange Contracts......Page 265
Foreign Currency Financial Statements......Page 266
General Rules......Page 268
Special Rules......Page 269
IFRS: Interim......Page 271
Basic Statements......Page 272
Principles Applied......Page 273
Governmental (State and Local) Accounting......Page 275
Funds......Page 277
Methods of Accounting......Page 278
Financial Statements of Governmental Units......Page 279
Management Discussion and Analysis (MD&A)......Page 281
Government-Wide Financial Statements......Page 282
Fund Financial Statements......Page 292
Notes to Government Financial Statements......Page 302
Required Supplementary Information......Page 303
General Fund Accounting......Page 305
Capital Projects Fund......Page 313
Debt Service Fund......Page 314
Proprietary Funds......Page 315
Fiduciary Funds......Page 316
Interfund Transactions......Page 318
Solid Waste Landfill Operations......Page 322
Government Consolidations......Page 323
Financial Statements of Not-for-Profit Organizations......Page 324
Contributions Made to and Received by Not-for-Profit Organizations......Page 331
Hospital Revenues......Page 337
College Tuition Revenues......Page 338
Index......Page 339