Intermediate 1 Research Paper
Directions: Type your answer starting on the line after each question.
1. FASB Accounting Standards Codification FASC
a. When did the FASC Codification become effective?
The FASC became effective for interim and annual periods ending after September 15, 2009 even though the authoritative version of the Codification was released on July 1, 2009.
b. Did the FASC change prior GAAP?
The FASC did not change prior GAAP but it instead reorganized previous GAAP into a new structure. This new structure is organized into a new research database that is supposed to be user friendly and make finding certain GAAP easier to use.
c. What does the FASB expect from …show more content…
Several examples of continuing involvement that are provided by the ASC include: Servicing arrangements, agreements to purchase or redeem transferred financial assets, arrangements to provide financial support and the transferor’s beneficial interests in the transferred financial asset.
3. Inventories FASC 330-10
(a) Identify the primary authoritative guidance for the accounting for inventories.
The primary authoritative guidance for the accounting of inventories is FASB Accounting Standards Codification topic 330.
(b) List three types of goods that are classified as inventory. What characteristic will automatically exclude an item from being classified as inventory?
The three types of goods that are classified as inventory are goods awaiting sale (finished goods), goods in the course of production (work-in-process), and goods to be consumed directly or indirectly in production (raw materials). The definition of inventory does not include any long term assets that are subject to depreciation accounting. Therefore if an asset is depreciable, it is not included as inventory.
(c) Define “market” as used in the phrase “lower-of-cost-or-market.”
The word market in the phrase “lower-of-cost-or-market” means the replacement cost of your inventory. It is the cost that it