Flashcards
Financial reporting
Cards in this deck (19)
- 1IFRS RevenueIFRS 15
*Identify the Contract (9)
*Identify the Performance Obligation (22)
*Determine the Transaction Price (46)
*Allocate the transaction price to each performance obligation (73)
*Recognize Revenue when each obligation is met (35) - 2ASPE RevenueASPE 3400:
*Recognition 3400.05.06: Performance
*Consignment sales: 3400.13 Significant Risk/Reward Transfer
*Customer Refund: Focus on measurement of consideration, old product recognize rev and create liability, new product defer revenue - 3Subsequent EventsIAS 10/ ASPE 3820
Adjust if conditions existed at BS date:
*Contingent Liability: Lawsuit
*Inventory: Lower of cost and NRV
*Customer Bankruptcy: AR impairment Test - 4Change in Estimate vs PolicyIAS 8 / ASPE 1506
Only make policy change if:
*Provide more relevant info
*Required by GAAP
Change in estimate if new info is provided - 5Non-Monetary Transactions ASPEASPE 3831.06
Measure at fair value unless :
*Lack commercial substance>Change in cashflow config or entity specific value
*Exchange product in normal course of operations to facilitate sales
*Fair value of asset given up/received cannot be determined
*Transactions involves owner
***Therefore measure at carrying value of asset given up - 6Non Monetary Transactions IFRSIAS 38 PPE
Measure at fair value unless meet PPE or intangible definition
*Lack commercial substance>Change in cashflow config or entity specific value
*Fair value of asset given up/received cannot be determined
***Carrying value of asset given up - 7Related Party Transaction RecognitionIAS 24 / ASPE 3840
Identify if related
*Control, Joint, Significant Influence
*Management of entity
*Immediate Family Member - 8Related Party Transaction Measurement DefaultIAS 24 / ASPE 3840
Default to carrying amount with gains/losses in equity - 9Related Party Transaction Measurement Exchange amountIAS 24 / ASPE 3840
Use exchange amount and record gain/loss income if:
*Normal course of operations (same business) and monetary transaction or NMT with commercial substance
*Not normal but both apply:
Change in ownership >20%
Exchange amount is supported by evidence like fair value - 10Asset Held for Sale Recognition (If division, must consider discontinued operations)ASPE 3475 / IFRS 5
Recognition (6)
*Committed to sale
*Available for immediate sale
*Active plan to look for buyer
*Sale is probable
*Actively market for fair value
*Change of plan is unlikely - 11Asset Held for Sale Discussion (If division, must consider discontinued operations)ASPE 3475 / IFRS 5
*Balanced discussion
*Measure at lower of carrying value or FV minus cost to sell
*Cease to take depreciation when classified
*DR Impairment loss, CR PPE, reduce net income - 12Discontinued Operations DefinitionAPSE 3475 / IFRS 5
3 (e): Meet 1 of the following:
*Separate major business line or geographic area
*Single coordinated plan to dispose of asset altogether
*Subsidiary acquired exclusively with view of resale - 13Discontinued Operations Component of EntityASPE 3475 / IFRS 5
When component of entity is classified as held for sale or sold/stopped in fiscal
Component of entity when:
*has its own operation independent from rest of company
*generates its own cash flow - 14Discontinued Operations EffectsReclassify income/loss from continued to discontinued and disclose
*post tax profit/loss of discontinued operations
*post tax profit/loss recognize measurement of FV less cost to sell - 15PPE Asset CostsASPE 3061 / IAS 16
*Building: Price, tax, real estate commission, cost during construction
*Land: Price, legal/accounting fees, land transfer tax, demolition of old building
*Equipment: Price, tax, installation, assembly, transportation, testing, professional fees - 16PPE Additional CostsASPE 3061 / IAS 16
*Financing/Interest: only capitalize, if qualifying (takes long to get ready), only interest direct attributable to asset
*Training is not capitalized, employee benefits - 17PPE ConsiderationsIAS 16 / ASPE 3061
*Depreciable: Determine useful life, recalculate depreciation, difference goes to additional depreciation
*Discuss impairment - 18Betterment vs Repair ASPEASPE 3061
Betterment Criteria ASPE 3061.14:
*Increase in physical output/service capacity
*Quality of output improved
*Lower operating cost
*Useful life extended
If betterment, add carrying amount and depreciate over useful life, if significant component consider separate depreciation/capitalize - 19Better vs Repair IFRSIAS 16
IFRS uses major replacement/inspection
Definition of PPE (7):
*Probably that future economic benefits associated with the item will flow to entity
*Cost of item can be reliably measured
Capitalize if met, consider significant component
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- CPA Accounting Flashcards on Financial reporting, created by Charley Tung on 20/04/2022.
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- Charley Tung
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