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24 Cards in this Set
- Front
- Back
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Avoidable Interest Formula |
Avg. Accumulated Expenditures * Interest Rate * Construction Period - Avoidable interest is amount capitalized which could have been avoided by not undertaking the project. - Capitalize lower of Avg vs Actual Interest |
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Non-monetary Asset Treatment Criteria |
1. FV of asset received and exchanged are unknown 2. Exchange is done to facilitate sales 3. Transaction lacks commercial substance |
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Non-monetary exchange treatment - No criteria met |
1. Use FV method 2. Calculate Realized G/L FV Given Up vs. CV given up 3. Recognize All realized Loss and Gains 4. Asset Received (Dr) Loss (Dr) Acc/Dep (Dr) Asset Given Up (Cr) Gain (Cr) |
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Non-monetary exchange treatment - All FV unknown |
1. Use Carrying Value Method 2. Gains and Losses not recognized 3. Asset Received (Dr) Acc/Dep (Dr) Asset Given (Dr) |
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Non-monetary exchange treatment - Criteria 2/3 - No Boot |
1. Calculate Realized G/L FV Given Up vs. CV Given Up 2. Only recognize loss 3. Asset Received (Dr) Loss (Dr) Acc/Dep (Dr) Asset Given Up (Cr) |
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Non-monetary exchange treatment - Criteria 2/3 - Boot Paid |
1. Calculate Realized G/L FV Given Up vs. CV Given Up 2. Only recognize loss 3. Asset Received (Dr) Loss (Dr) Acc/Dep (Dr) Asset Given Up (Cr) Cash (Cr) |
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Non-monetary exchange treatment - Criteria 2/3 - Boot Received |
1. Calculate Realized G/L FV Given Up vs. CV Given Up 2. Recognize loss and partial gians Gain = Realized Gain * (FV Boot)/(FV Boot * Asset Received) 3. Cash (Dr) Asset Received (Dr) Loss (Dr) Acc/Dep (Dr) Asset Given Up (Cr) Gain (Cr) |
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Types of Capital Expenditures |
1. Betterment - improve asset w/o extending the useful life (Debit Asset, Credit Cash) 2. Major Repairs - Improve Asset and extend useful life (Debit A/D, Credit Cash) |
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Sum of the Years Digits Formula |
n(n+1)/(2) where n is the number of years depreciated Multiply Depriciable base by (# years left)/(Sum of Years Formula) |
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Tangible Asset Impairment Procedure - Held for Use |
1. Test for Impairment - Impaired if CV > Non discounted Future Cash Flow 2. Measure Loss - CV vs. FV - Loss goes to income 3. Continue to Depreciate w/ lower depreciation |
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Tangible Asset Impairment Procedure - Held for Sale |
1. Write down as a loss 2. Measure Loss - CV vs. FV - Costs to Sell (NRV) Loss goes to: Material Disc. items- Discontinues operations Immaterial - Income 3. Don't depreciate; Only GAAP case where write ups are allowed |
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Intangible Asset Impairment - Finite Life |
1. Amortize and Test for Impairment: CV> Nondiscounted Future Cash Flows 2. Measure Impairment Loss: CV vs FV Loss Goes To: Material Disc. items- Discontinued operations Income - All others 3. Continue to amortize w/ lower amortization |
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Intangible Asset - Indefinite Life |
1. Don't amortize; Test for impairment: CV vs FV 2. Measure Impairment Loss: CV vs FV Loss Goes To: Material Disc. items - Discontinued operations 3. Do not amortize |
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Goodwill Impairment |
1. Don't amortize. Test for Impairment: A) CV unit GW >0 and B) CV unit GW > FV unit GW it may be impaired. May skip A and B if CV unit GW < 0 2. Test for impairment 2: CV GW alone > Implied FV GW alone 3. Measure Impairment Loss: CV GW alone - implied FV GW (FV unit - FV all items except GW) 4. Do not amortize. |
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Software for Sale or Lease Treatment |
Start<>Tech Feas - R&D expense Tech Feas<>Mkt Feas - Capitalize as SW Mkr Feas<>End - Inventory (duplication + packaging costs) Other Expenses - Maintnence and other support Amortization - Use greater between S/L method or ratio: (current rev/est. life rev.) Lower of CV or NRV(write down if NRV is lower) |
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Software for Internal Use Treatment |
Prelim (Start<>Probable Completion): Similar to R&D Development (Prob. Compl.<>Implementation): Capitalize Costs Post Implement(Implement<>End) -Amortize Capitalized Costs |
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PP&E IFRS Treatment |
1. Recorded at Cost 2. Cost Model: Cost - Acc/Dep - Acc/Impair = CV 3. Revaluation Model: FV@Date-Acc/Dep post revalue - Acc/Impair pose revalue = CV 4. Acc/Dep (Dr) Revaluation Surplus OCI (Cr) 5. Disposal - Gain/Loss : Profit Ravluation surplus : R/E |
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Intangible Assets IFRS recorded at |
1. Aquired&Identifiable - Cost 2. Aquired in Biz Comb.& Identifiable - FV 3. Aquired in Biz Comb & NOT identifiable - Plug 4. Internally Developed&Identifiable - Cost of development 5. Internally Developed & Not identifiable - Do not recognize |
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Intangible Assets IFRS Cost Model |
1. Finite Life: Cost - Acc/Amort - Acc/Impairment=CV 2. Indefinite Life: Cost - Acc/Impairment=CV |
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Intangible Assets IFRS Revaluation Model |
1. Finite Life: FV@Date - Acc/Amort -Acc/Impairment = CV 2. Indefinate Life: FV@Date - Acc/Impairment =CV |
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Investment Property IFRS Treatment |
1. Recorded at Cost 2. Cost Model: Cost - Acc/Dep - Acc/Impairment =CV 3. Fair Value Model: FV=CV |
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IFRS Impairment test |
Impaired if CV>Recoverable Amount Recoverable Amount is greater of A) Net Selling Price = FV-Costs of Disposal B) Value in Use = Est Future Cash Flow |
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IFRS PP&E Impairment |
1. Cost Model: Dep/Exp OR Impairment Loss (Dr) Acc/Dep(Cr) 2. Revaluation Model: Revalue Surplus (Dr); Impairment Loss (plug)(Dr); Asset or Acc/Dep (Cr) |
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IFRS Intangible asset Revaluation |
1. Finite- Test when CV>Recoverable Amount Indefinate - test annually 2. Cost Model: Finite - Amort/Exp OR Impair Loss (Dr); Acc/Amort (Cr) Indefinite - Impar/Loss (Dr); Asset (Cr) 3. Revaluation Model: Finite - Reval Surplus (Dr); Impar/Loss (Dr); Asset OR Acc/Amort (Cr) Indefinite - Reval Surplus (Dr); Impairment Loss (Dr); Asset (Cr) |
