What do a classified Balance Sheet?
Distinguish between non-current assets and current assets as sales as non current liabilities and non-current liabilities.
Types of Assets?
- Current Assets
- Investments
- PP&E
- Intagibles
- Other Assets
Types of liabilities?
- current liabilities
- long-term liabilities
What require IFRS and GAAP about notes?
require that a description of all significant policies must be include as an integral part of F/S.
What is the preferred presentation?
Summary of Significant Accounting Policies
Items identify and describe in Summary of Significant Accounting Policies?
- Measurement basis uses in do the F/S
- Accounting Principles and Methods
- Criteria
- Pricing
- Policies
Accounting policies described?
- Basis of consolidation
- depreciation methods
- amortization of intangibles
- inventory pricing
- accounting for recognition of profit on LT-construction contracts
- recognition revenue from franchising or leasing operations.
Items not included ?
- Composition of accounts and amounts in dollar of account balances
- Details relating to changes in accounting principle
- dates of maturity and amounts of LT-Debt
- Yearly computation of depreciation, depletion, amortization
Remaining notes to the financial statements?
Contain all other information relevant to decision makers. Are not presented either the body of the financial statement or in the summary of significant accounting policies.
Examples of remaining notes?
- changes in stockholder equity
- required marketable securities (carrying value and gross unrealized)
- contingency losses
- contractual obligations
- pension plan description
- post balance sheet disclosures
What include related party disclosure?
- affiliate of an entity
- entities counted for using the equity method(investment in affiliate and joint ventures)
- parents or subsidiary or subsidiaries of a common parent
- Trusts for the benefit of employees such as pensions and profit sharing trust
- Management of an entity and their immediate family members
- owners of more than the 10%(principal members) and there immediate family.
Examples of related party transactions?
- sales, purchase, and transfer of real or personal property
- services received
- use of property and equipment by lease
- borrowing, lending and guarantees.
- Maintenance of compensating bank balances for the benefit of related party
- intra-entity billings based on allocation of common cost
- Filings of consolidates tax returns.
what include Material Related Party Transaction? US GAAP
- -Nature of the relationship
- a description of the transaction for each period
- dollar amounts of the transactions
- Amounts due to or from the related parties at each balance sheet date.
- the name of the related party if necessary to understand the relationship
What exclude Material Related Party Transaction?
- compensation arrangement
- expenses allowances
- other similar items
What include Material Related Party Transaction? IFRS
- compensation arrangement
- -Nature of the relationship
- a description of the transaction for each period
- dollar amounts of the transactions
- Amounts due to or from the related parties at each balance sheet date.
- allowances for bad debts related to amounts due from related parties
- bad debt expense or write offs of debts due from related parties.
What is and what include disclosure of compensation arrangements? IFRS
entities are require to disclose key management personnel compensation in total.
- short term employee benefit
- post-employment benefit
- other long-term benefits
- termination benefits
- share-based payments
US GAAP require disclosure of compensation arrangements?
- No. However, SEC regulation do require that disclosure
- IFRS also require that type of disclosure.
What include Disclosure of Risks and Uncertainties ?
- Nature of operations
- Use of estimates in the presentation of F/S
- Certain Significant Estimates
- Current Vulnerability Due to Certain Concentrations
What mean certain significan estimates? Examples?
- When that estimate will change in the near term and that the effect of the change will be MATERIAL, an estimate of the effect of the change should be disclose.
- EXAMPLE:
- deferred tax asset
- capitalized computer software
- Loan valuation allowances
- amounts reported in long-term contracts
- litigation-related obligations
What mean current vulnerability due to certain concentrations?
-arise when an entity is exposed to risk of loss that could be mitigated through diversification.
Examples of concentrations?
- concentrations in:
- volume of business transacted with a particular customer, supplier, lender
- revenue from particular product, services, or fund-arisings
- the available supply resources, such as materials, labor, services
- market or geographic area
How it disclose current vulnerability due to concentrations?
-Should met all of the following:
1-concentration exist at the F/S date
2-concentration makes the entity vulnerable to the risk of a near-term sever impact.
3- it is at least reasonably possible that the event that cut cause the sever impact will occur in the near term.
