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28 Cards in this Set
- Front
- Back
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How are discontinued operations and extraordinary items that occur at midyear initially reported?
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Both should be included (prorated) in net income and disclosed in the interim financial statement notes.
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What constitutes a reportable segment?
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One having 10% of all revenue, including revenue from unaffiliated sales and from intersegment sales
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What is a required enterprise-wide disclosure regarding external customers for a public company?
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Report segment information about a company's major customers if that customer provides 10% or more of the combined revenue, internal and external, of all operating segments.
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Service cost represents the increase in the projected benefit obligation resulting from |
Employees' services rendered during the year. |
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Under U.S. GAAP, amortization of unrecognized prior service cost is calculated by assigning an |
Equal amount of the cost to the future periods of service of each employee at the date of amendment to the plan. |
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Under U.S. GAAP, the accumulated benefit obligation is the present value of |
Future retirement payments attributed to the pension benefit formula to employee services rendered prior to a date, based on current and past compensation levels. |
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Mnemonic for Pension Cost |
S - Service Cost + I - Interest Cost (Beg. PBO * Disc Rate) - R - Return (expected) on Plan Assets (Beg FV * Eff. Rate) + A - Amort. of Prior Service Cost +/- G - Amort of Gains(-)/Losses(+) - E - Amort. of Transition Asset |
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Absent any actuarial gains or losses, the net pension gain or loss incurred during an accounting period under U.S. GAAP is the difference between the |
Expected return on plan assets recorded in net periodic pension cost and the actual return on plan assets earned during the accounting period. This amount is reported in other comprehensive, after-tax, in the period incurred. |
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Expected return on plan assets is calculated as |
Beginning fair value of plan assets × Expected rate of return |
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Ending Fair Value of Plan Assets Calculations |
Beg. FV of plan assets + Contributions - Benefits Paid + Actual Return on Plan Assets |
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Gain on net periodic plan asset is recorded with the following journal entry |
DR: Pension benefit asset/liability CR: Other comprehensive income DR: Deferred tax expense - OCI CR: Differed tax liability |
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Under U.S. GAAP, unrecognized pension gains or losses are amortized over the |
Average remaining service period if, at the beginning of the year, the gain or loss exceeds 10% of the greater of the beginning of the year PBO or the beginning of the year market related value of plan assets |
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Net loss amortization calculation when, at the beginning of the year, PBO exceeds the fair value of the plan assets |
Unrecognized Net Loss - 10% of Greater of Beg. PBO/Plan Assets = Excess Excess / Avg. Remaining Svc Life = Amort. |
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U.S. GAAP requires that all overfunded (FV plan assets > PBO) pension plans be aggregated and reported as a __1__, and that all underfunded (FV plan assets < PBO) pension plans be aggregated and reported as a __2__ |
1. Noncurrent asset 2. Current liability (to the extent that the benefits payable in the next year exceed the fair value of the pension plan assets), a noncurrent liability, or both. |
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Under U.S. GAAP, unrecognized prior service cost, unrecognized transition obligations and unrecognized net gains or losses must be reported in |
Accumulated other comprehensive income, net of tax, until recognized as a component of net periodic pension cost through amortization. |
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Under IFRS, remeasurements of the defined benefit liability (asset), including remeasurements from actuarial gains, are reported in |
Other comprehensive income and are not reclassified (amortized) to the income statement |
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Under IFRS, past service cost is recognized on the income statement in |
Period of the plan amendment. |
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Are corporations permitted to report income statement gains and losses from treasury stock transactions? If no, how are they treated? |
Not allowed to report income statement gains & losses from treasury stock transactions. Treasury stock "G&L" are reported as direct adjustments to stockholders' equity. Gains recorded by crediting APIC - Treasury Stock. Losses are recorded by reducing any existing APIC - Treasury Stock to $0, and then debiting any additional loss to Retained Earnings. |
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Book Value per Common Share = |
Common Stockholder's Equity / Common Shares Outstanding |
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Equity instruments issued for employee services are to be valued at the date of the grant. |
Grant. |
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T or F: Compensation expense relative to stock options is recognized regardless of whether the option is exercised. |
True |
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When the cost method is used to account for treasury stock, common stock is reported on the balance sheet as the |
Total shares issued at par value |
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For a large stock dividend, retained earnings is debited for the par value of the additional shares issued. |
For a large stock dividend, retained earnings is debited for the par value of the additional shares issued. |
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Contingent shares (that are dilutive) (are/are not) included in the calculation of basic earnings per share (EPS). Stock options (do/do not) enter into the calculation of basic EPS. |
Contingent shares (that are dilutive) are included in the calculation of basic earnings per share (EPS) if (and as of the date) all conditions for issuance are met. Stock options do not enter into the calculation of basic EPS. |
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In computing the weighted-average number of shares outstanding for earnings per share (EPS) determination, a stock dividend (or a stock split) to the same class of shareholders is treated how? |
Retroactively recognized and treated as if it had occurred at the beginning of the year. In addition, EPS for all prior periods presented must be adjusted as though the shares had been outstanding for the entire period presented. |
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EPS disclosures are required for |
-All companies with publicly traded common stock or potential common stock including Stock options, Stock warrants, Convertible securities, "Contingent stock" agreement -Companies that have made a filing or are in the process of filing with a regulatory agency in preparation for a public sale of common stock. |
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Shares issuable upon the exercise of a stock option (are/are not) considered contingent shares as ___________ |
Shares issuable upon the exercise of a stock option are not considered contingent shares as the option holder is required to pay the strike price to exercise the options. |
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Basic EPS Calculation |
Net Income - Cum. PS Divid. Required = Income Avail. to Common Stockholders / Avg. Comm. Stock Outstanding = Basic EPS |
