• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

Card Range To Study

through

image

Play button

image

Play button

image

Progress

1/32

Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

32 Cards in this Set

  • Front
  • Back
the fmv adjustment for a trading portfolio at the end of the period goes where...
income statement
the fmv adjustment for available for sale goes where...
stockholders' equity
what is used to prove significant control
equity method
when an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as...
a deduction from the investment account
what would indicate that an investor company does not have an ability to significantly influence an investee
investor owns 30% of the investee but another owner holds the remaining 70%
a company recently required an additional 30% of another company after previously owning 10% with no sig. influence. Using the equity method now, how will the investor report this change
a retrospective adjustment to restate all prior years
under the fair value option, what affects the income the investor recognizes from its ownership of the investee
changes in the fair value of the investor's ownership shares of the investee
when an investor elects the fair value option for a sig influence investment, cash dividends received by the investor from the investee should be recorded as...
dividend income
investor company applies equit method for 25% investment in another company. Goods were sold to the investee with a 40% gross profit. The investee sold all these goods. How should the investor report the effect of the intra-entity sale on its income statement
no adjustment is necessary
when do acquisitions occur
when control of another company happens
what does dissolution of investee mean
full effect at time of the acquistion with one single entry
what is the journal entry for dissolution
individual assets at fmv
(plug goodwill)
individual liabilities at fmv
cash
note payable
what happens when a company acquires an investee
choose to maintain their separate legal status
what are the reasons to keep legal status separate in an acquistion
facilitate performance measurement and facilitate a later sale of that unit
what are the journal entries for an acquisition
investment
cash
note payable
at end of period:
assets & liab - fmv
investment account
what is the current gaap for consolidation of financial info
acquistition method
what is the acquisition method
fmv at time of acquisition
what is the difference between physical assets and intangibles for acquisition method
difficulty assigning fmv to intangibles vs physical assets
what is in process R&D using acquistion method
intangible assets
what are the differences between prior GAAP purcahse method and acquistion method
no in process R&D, fees paid to make acquistion happen were included as part of price (expensed under current GAAP), long term assets need to be written down (recognize a gain when bargain purchase occurs), ignore contingent consideration
what occurred during prior pooling method
ignored fmv and combined book values
what is a theoretical justification for consolidated financial statements
in form the companies are separate; in substance they are one entity
what is a statuatory merger
a business combination in which only one company continues to exist as a legal entity
what is the appropriate accounting treatment for the value assigned to in process R&D acquired in a business combination
capitalize as an asset
in its financial statements, the acquiring firm should report the value assigned to the long term lease contract of the acquired entity as...
an intangible asset
when does gain recognition accompany a business combination
when a bargain purchase occurs
using the acquistion method, costs paid to attorneys and accountants for services in arranging a merger should be...
recorded as an expense in the period of the merger
when negotiating a business acquistion, buyers sometimes agree to pay extra amounts to sellers if performance metrics are acheived in the future. how should buyers account for such contingent consideration in recording an acquisition
the fair value of the contingent consideration is included in the overall fair value of the consideration transferred, and a liability or additional owners' equity is recognized
a company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. why might the company decide to apply the initial value method for internal reporting purposes
the method is a relatively easy method to apply
a company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. why might the company decide to apply the equity method for internal reporting purposes
operating results appearing on the parent's financial records reflect consolidated totals
if no legal, regulatory, contractual, competitive, economic, or other factors limit the life of an intangible asset, the asset's assigned value is allocated to expense over...
indefinitely with an annual impairment review until its life becomes finite
a subsidiary's recording of the fair value allocations as well as subsequent amortization is...
push down accounting