Assurance - FR

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Government reporting entity (PS 1300.28 and .34)

"A government business enterprise with the following criteria (a) it is a separate legal entity with the power to contract in its own name and that can sue and be sued; (b) it has been delegated the financial and operational authority to carry on a business; (c) it sells goods and services to individuals and organizations outside of the government reporting entity as its principal activity; (d) it can, in the normal course of its operations, maintain its operations and meet its liabilities from revenues received from sources outside of the government reporting entity." USE ASPE if the above are met

Agriculture (IAS 41)

"This Standard shall be applied to account for the following when they relate to agricultural activity: (a) biological assets, except for bearer plants (ex apple tree - can keep growing apples) (b) agricultural produce at the point of harvest; and (c) government grants covered by paragraphs 34 and 35." IAS 41.10 "An entity shall recognise a biological asset or agricultural produce when, and only when: (a) the entity controls the asset as a result of past events; (b) it is probable that future economic benefits associated with the asset will flow to the entity; and (c) the fair value or cost of the asset can be measured reliably."

Diluted EPS

(Net earnings to SH + Income effect of dilutive PCS) / (WACSO + Share impact of dilutive PCS) 1. Calc basic EPS 2. Identify all PCS (potential CS) 3. Calc incremental EPS for each 4. Order incremental EPS from lowest (most dilutive) to highest (least dilutive) 5. Compare the 1st ranked EPS (most dilutive) to basic EPS and if its less than add it to the EPS calc and then compare that to the next most dilutive etc. until new EPS is higher than the next ranked PCS item... Converting share options denominator = difference with #share options vs price paid/avg price

Grants related to income

(ex for salaries) Show as "other income" or as a credit to the related expense account (AFTER the recognition criteria are met - keep as deferred grant revenue until then) Can recognize over time - ex grant is that must hire and maintain someone for 5 years then recognize 1/5th of the grant each year, either as other inc or as a reduction to salary expense.

Grants related to assets

(ex to cover purchase of equipment). Recognize as deferred revenue and bring into income overtime to match related expenses 2 presentation options: Deferred income method - as deferred income and brought into income in line with dep (or grant conditions for a non dep asset) as other income or as a credit to dep exp. keep remaining amt in def grant rev acct Carrying amount method - changes the dep calc to be (COST - GRANT) / Life AND literally reduces the carrying amt of the asset on the BS so you don't have a def grant revenue

Three types of accounting changes (IAS 8 and ASPE 3051)

- Change in estimate: Applied prospectively (ex change in depreciation bc of asset life) - Change in policy: Retrospectively. Allowed if to provide more relevant information or if bc of a change to the Standards (ex ASPE to IFRS) - Correction of prior error: Retrospectively to the periods in which it occurred. If restmt is impactable then just restate beg balances Include additional disclosures

Reportable segment thresholds (IFRS 8.13)

- External revenue > 10% of total company revenue - Absolute value of profit/loss >10% of all profit/loss - Assets are >10% of combined assets Combined external revenue of reportable segments must be >75% of the entity's total external revenue

Types of hedges

- Fair value hedge - Cash flow hedge

NCI Measurement options (IFRS 9)

- Identifiable Net assets (Partial GW): Measure NCI at ownership % of the FMV of net assets, and GW is only allocated to the parent ie: Parent owns 80% then NCI = the other 20% of the Purchase price - Fair Value enterprise method (Full GW): Measure NCI at the FMV of the NCI interest - ie traded on an active market and allocate GW to the NCI. ie: Parent owns 80% then NCI = 20% of the value of the shares Either way use the 100% value (by adding 20% based on purchase price or based on FMV) as the Company value and then subtract NVB of assets from this amt to get the acquisition differential etc.

Assets that need to be tested annually for impairment

- Intangibles with an indefinite useful life - Intangible assets not yet available for use - CGU's with allocated GW

Contingency liability criteria (IAS 37 and ASPE 1000 - liabilities ASPE 3290 contingencies)

- Present obligation from past events - Probable (>50%) that there will be an outflow of resources - Can estimate the outflow Becomes a provision once recorded

PP&E Recognition criteria (IAS 16; ASPE 3061)

- Probable that future economic benefits will flow to the entity - Cost of the item can be measured reliably Can capitalize costs to bring the asset to use (delivery, operation tests etc) construction costs ex permits, DM, borrowing costs Land: can cap commissions, legal fees, title search, prop transfer taxes and other costs to make land useable

Revenue recognition ASPE 3400

- Risks and rewards of ownership have transferred - revenue can be measured reliably - collection is reasonable assured

Share based payments

- Share options - Share appreciation rights

IFRS 16 low value election criteria for operating lease

- lease is less than one year - Asset is of low value when new - Lessee can benefit from use of asset on its own or together - The asset isn't highly integrated or dependent on other assets

Treatment for contingencies not recorded

1. Don't record but disclose: When outcome is possible but not probable - or when amount cant be reliably estimated 2. Don't record or disclose: When there is a remote chance (ie very small)

Government grant recognition criteria (IAS 20; ASPE 3800)

1. Entity will comply with the grant criteria 2. The grant will be received Otherwise record as "deferred government grant rev" and set up a receivable. Rec revenue in the period received if expenses are already incurred otherwise rec when expenses happen. Same criteria apply to a forgivable government loan Grants are related to income or to assets NMT grants: IFRS = at FMV or a nominal value; ASPE = at FMV only

Partial monetary consideration

1. FMV value criteria are met = Add cash amt to the FV of the item 2. Carrying value is used = If paying cash then measure asset at CV + Cash paid & if receiving cash then measure at CV - cash received

Purchase of shares 6 Steps at acquisition (IFRS 3)

1. Identify the acquirer 2. Determine acquisition date 3. Determine purchase price 4. Calc acquisition differential (Amt paid - BV of net assets = Acq differential +/- FV +/- Tax = GW(BPO) 5. Measure NCI (Identifiable Net assets OR Fair Value enterprise method) 6. Elimination entry

IFRS 15 - 5 steps

1. Identify the contract (15.09) (a. the contract has been approved by all parties; the rights regarding the G&S to be transferred can be identified; The payment terms can be identified; the contract has commercial substance; It is probable that customer will pay) THEN CONCLUDE that there is/isn't a contract 2. Identify performance obligations (use the 2 criteria then CONCLUDE 15.27) 3. Determine transaction price 4. Allocate transaction price to each performance ob (IFRS 15.76) 5. Recognize revenue when each ob is satisfied (15.31)

Held for sale classification criteria (IFRS 5 para 7 and 8)

1. The asset must be available for immediate sale in current condition 2. The terms of the sale are usual and customary 3. The sale must be highly probable: - Mgmt is committed to a plan to sell/dispose - The asset is actively marketed for a reasonable sale price based on FMV - The sale is expected to occur within a year - Unlikely that there will be sig changes to the plan

NMT FV Measurement exclusions

ASPE 3831.06 1. The transaction lacks commercial substance; 2. The transaction is an exchange of a product or property held for sale in the ordinary course of business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties to the exchange; (similar items) 3. neither the fair value of the asset received nor the fair value of the asset given up is reliably measurable; or 4. the transaction is a non-monetary non-reciprocal transfer to owners

Hedge accounting /Eligible hedged items (IFRS 9)

Accounting for two transactions as one linked item Eligible hedged item = Item that the entity wants to protect from exposure to a variable, such as foreign exchange rate changes. Eligible hedged instruments: Used to reduce of eliminate exposure/risk of the hedged item. Either a derivative or a non derivative

Capital assets for NPO's (ASNPO 4433)

All tangible assets should be capitalized and amortized unless you are small and annual revenue is less than 500K. Then you get to chose to: - Directly expense - capitalize but not amortize - cap and amort

AR - Measurement options

Amortized cost: most common FVTOIC: If the company's business model is to collect cash but also to sell the AR FVTPL: If the company is holding AR to actually be sold as part of a portfolio

Fund accounting (ASNPO 4400)

An option under ANSPO. Self balancing set of accounts set up for each fund. Each fund is show as a column on the FS ex general fund, restricted funds, capital asset fund (PP&E, amortization expense, etc), and endowment fund (when a principle balance must be maintained and interest is to a diff fund) Not good if you are a simple NPO with one location and one main activity because it increases complexity

IFRS vs ASPE on Impairment (IAS 36 vs ASPE 3063)

Asset grouping: IFRS uses asset level or CGU level; ASPE uses asset groups (CGU is generally a lower level than asset group) ASPE: Only test for impairment if there are indicators, no annual tests ASPE: Can't reverse impairment ASPE impairment calc: First compare the CV to the UNdiscounted FCF (the aspe version of a recoverable amount). If CV < FCF then no impairment. If CV > FCF then impairment = FAIR value - CV IFRS impairment calc: Carrying amount - recoverable amount; rec amount = higher of FV - costs of disposal vs Value in use (discounted FCF)

Purchase assets vs purchase shares

Assets: Record the purchases assets on your books at FMV. Any excess in amt paid >FMV = Goodwill Shares: Requires consolidation accounting. Initial entry is to DR investment and CR cash

Equity income formula

Associates net income (%) +/- FV differential amortization + Realized interco profits from PY - Unrealized interco profits from CY = Equity income Inventory diffs fully reverse the next year Diffs are +/- 'd in the same direction that they are when calc'ing GW Capital asset diffs are only taxed at 50%

Integrated operations - Temporal method

Each transaction is translated at the time Rev & Expense: Date (or avg) incurred/earned Dep: Historical rate when asset was purchased Cost of sales: a result of inv purchases therefore translate by taking Open Inv (rate when purchased) + Purchases (rate when purchased) - Ending inv (rate when purchased) = COGS BS ITEMS Monetary: use FX on stmt date Non monetary: Use historical cost Dividends: Date of declaration

Share appreciation rights (SARs)

Employees don't pay an option price, they are just redeemed. Recognition: Dr. Comp exp, CR SAR liability If redeemed: DR SAR liability and CR cash If expired: DR SAR liability and Cr comp exp Recognize over time, ie if they vest in 2 years then record 1/2 of it on year 1 and on year 2. Adjust for FMV and expected % to vest.

Revenue with a new promotion

If its a brand new promo and the customers are able to return the product then rev can only be recognized up to the Rev amount in PY when there was no promo - until the promo or return time has passed

Foreign currency transactions (IAS 21)

Initial measurement: Record at spot rate or average rate if incurred over a period of time (ex revenue or interest expense) Monetary Items: (ex receivables and payables) translated at the closing rate on the b/s date. Non-monetary items: (ex inventory, prepaids, ppe) Measured at historical cost

Types of foreign operations

Integrated: Temporal method. Functional currency = CAD Self Sustaining: Current rate method. Functional currency isn't CAD

Retractable shares

Obligation of the issuer to provide a diff fin asset if the holder requests (ex cash) therefore must be prepared to compensate them at their request of retraction. Record as a liability (ie Pref shares - liability)

Mandatory redemption shares

Obligation to redeem and therefore they are DEBT and not equity so record as a liability. Record int dividend pmts as interest (dr int exp and cr int pay)

Goodwill recognition

Only recognize GW if acquired in a business combo Never recognize internally generated GW

Operating segments and reportable segments

Op Segment: Engage in businesses where it can have rev/expenses, operations are reviewed by mgmt. for decision making and discrete financial info is available Reportable segment: An op segment or group of op segments required to be disclosed separately

Operating segments and Reporting segments

Operating seg: Engage in business where is can have rev/expenses, operating results are regularly reviewed by COO for decision making, discrete financial info is available Reportable segment: An op segment or an aggregate of op segments required to disclose separately

Fair value hedge

The CF are in diff currencies so the changes are directly related to FX changes. The hedging instrument is used to hedge against changes in the hedged item The FWD contract has to be entered into AFTER/at the same time, it can't be early. The FINAL G/L on the fwd contract is shown as a dr/cr to the hedged item ASPE: The fwd contract isn't recorded until it matures

Equity method criteria (IAS 28)

Use this method when you have: Joint control - Contractual agreement to share Significant influence - >20% ownership or qualitative factors like board control, involvement, convertible debt, etc. Record the investment at COST, (even though you calculate Acq differential and FV diffs and GW) and record your % of income - % of dividends (The investment acct is reduced for divs not the income acct) ie: DR Cash received for dividends, DR investment account for net, and CR equity income for full% of income ASPE = option with equity method and cost method

FVTOCI - including Debt vs equity (IFRS 9)

Used for equity investments that are not held for trading, and debt instruments with CF's of principle and interest only. Capitalize transaction costs Debt: Show g/l in OCI net of tax, then when sold the cum unrealized gains to into P/L ie Recycled Equity: No recycling - goes straight to AOCI when sold

Amortized cost (IFRS 9)

Used for financial instruments held to collect Contractual cash flows when the CFs are only principle and interest. ex - bank deposits and bonds held to maturity Capitalize transaction costs

Common temp difference items

Warranty/Pension/Deferred Development costs: Acct - accrued based on est. Tax - Expense as incurred therefore always Zero Leases and ARO: Acct - asset/liability. Tax - Expense as incurred PP&E: Depreciation vs CCA Calc as Tax basis - Acct basis = Deductible (taxable) diff If the tax < acct basis then = Deductible diff = DTA If tax > acct basis = Taxable diff = DTL If capitalized development costs > amortization then it is an increase to the liability. If Warranty expense > claims paid then this increases the asset If CCA amt > Dep amt = DTL

Impairment reversal

Write up to the lesser of the recoverable amount and the carrying value Recognize in net income Can't reverse GW impairment IFRS only, ASPE = no impairment reversal

Sale and lease back

FIRST Identify if a sale has actually occurred and control has been transferred as per IFRS 15 Two possible outcomes: (1) Sale has not taken place bc control has not been transferred OR (2) Sale has taken place and control has been transferred. 1. Seller/lessee continues to recognize the asset and recognizes a loan payable and reduces the payable as pmts are made. The Buyer/lessor recognizes a loan receivable and reduces it over time 2. Seller/lessee derecognizes the asset and shows an ROU asset and lease liability. The Buyer/lessor recognizes the purchased asset at FMV and least pmts at mkt rate and uses op/fin lease criteria

Self-sustaining operations - Current rate method

FX exposure is limited to net investment in foreign operations. IS items: Translate at the rate they occurred BS ITEMS Monetary and non monetary: use FX on stmt date Dividends: Date of declaration Shares: historical rate FX gains and losses go into OCI (or SH equity if ASPE) FX gain/loss calc = Calculated position of net assets (open net assets at PY end rate + NI at avg rate - Divs at declaration rate) - Translated position (using the YE rate)

Subsequent measurement of intangible assets

Finite useful life: measure at cost (or revaluation under IFRS), and amortize over useful life.. Test for impairment when there are indicators Indefinite life: No amortization but have to test annually for impairment (IFRS) and when indicators exist

Recoverable amount (IAS 36)

Higher of: 1. FV - cost of disposal 2. Value in use: Estimate FCF from continuing use (or disposal), discounted at an appropriate rate Impairment loss = Carrying amount - recoverable amount. IF NO FMV/no active market exists, then use the Asset Value as the Recoverable amount

Revaluation model (IAS 16.31)

IFRS only option to revalue assets instead of using the cost method. Record the asset at FMV every time. Only works for assets that have a FV market available. Gains: Rec in net inc up to amt of losses recorded then into OIC Losses: Rec in OCI up to amt of gains then into NI

Depreciation IFRS vs ASPE

IFRS: (cost - residual) / useful life ASPE: Greater of (Cost - residual) / useful life VS (cost - salvage) / asset life Residual = sale price - disposal costs Salvage = no use for asset so sold for scrap Make acct policy choices based on asset *Class* not asset by asset

Contingent assets

IFRS: Can't record a contingent asset but can disclose if it is probable. If it becomes 'virtually certain' then its no longer contingent and you can recognize it ASPE: Only recognize a contingent gain if 100% probable (Aspe uses contingent gain instead of 'asset')

IFRS vs ASPE - Leases

IFRS: Operating and Finance lease; Use implicit rate if available otherwise use borrowing rate ASPE: Operating and Capital lease; Use lesser of implicit rate vs borrowing rate

IFRS 9 (ch6.5) Hedge accounting criteria

(hedge acct is optional as per ASPE3856.30) 1. The hedging relationship must consist of an eligible hedged item and an eligible hedging instrument. 2. At the inception of the hedge, the hedging relationship is formally designated and the hedging relationship and the entity's risk management objective and strategy for undertaking the hedge are documented. 3. The following three effectiveness requirements are met: • an economic relationship exists between the hedged item and the hedging instrument • credit risk does not dominate the change in value • the hedge ratio 1 is the same for both of the following: o the hedging relationship o the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument

Right of return

A form of variable consideration. Cant est return amt = defer revenue until the uncertainty has passed Can est return amt = rec up to expected amount and set up a return liability for the rest (must be shown separately) and do the same for COGS/inv ie: Dr COGS and Dr. Asset right to recover (% to be returned - recovery costs); Cr. Inventory for full amt

Cash flow hedge

A hedge to exposure in the variability of cash flows resulting from an asset or liability. In these cases, the value of the item being hedged has uncertainty, and the entity looks to hedge the risk of that fluctuation in value. In this case, the hedged item may be an anticipated transaction such as a proposed purchase of inventory, or a forecasted transaction such as sales denominated in a foreign currency. The hedging instrument is usually entered in to BEFORE the hedged item. Therefore, the Gains/Losses on the instrument before the hedged item have to go into OCI until gains are *realized* on the hedged item, then reverse the OCI amount against the hedged item

AR and Inv ratios

AR Turnover = credit sales / avg AR Inv turnover = COGS / avg inventory Average collection period (or avg days in inv) = # days in period / turnover ratio

Discontinued operations criteria (IFRS 5.32, ASPE3475)

Say if it is/isn't a component based on segmented info Must meet one of the three: (ASPE 3475.03) - A separate major line of business - Part of a single coordinated plan to sell/dispose - Subsidiary acquired to resell AND meets the HFS criteria (ASPE 3475.08, IFRS 5.32)

Forward contracts

Set up a Due to broker and a Due from broker account. One will be variable and one will be fixed. At reporting dates, update the variable side and the hedged item to the spot/fwd rate.

Joint arrangement classification considerations (IFRS 11 Appendix B)

Structure Legal form Contractual terms Other facts and circumstances

Not for Profit Accounting (ANSPO) - Terms and methods

Terms: Stmt of financial position (balance sheet); stmt of operations (IS); statement of changes in net assets or fund balances (like stmt of RE) Can use chose to use Fund Accounting (Common) and chose between deferral method or restricted fund method for recognizing contributions

Elimination entry

Dr. Common shares (to eliminate) Dr. RE (to eliminate) Dr. FV Diffs AND assets where FV = CV Dr. Goodwill DR/CR Deferred tax impact Cr. FV Diffs AND liabs where FV = CV Cr. Investment in Sub account Cr. NCI (based on NCI method selected) Cr. GW that previously existed on the subs books (to eliminate)

Inventory (IAS 23, ASPE 3031)

Can capitalize costs to move inventory from purchased state to point where it can be sold. ASPE and IFRS require absorption costing for OH. Measure inv at lower of Cost and NRV (ie proceeds - costs to sell) IFRS: requires capitalization of borrowing costs ASPE: Choice to capitalize or expense borrowing costs

Distinct goods/services criteria (IFRS 15.27)

Can the customer benefit from the g/s on its own? Is the promise to transfer the G&S separately identifiable from other promises in the contract? ex. hiring a contractor to build a deck = yes the materials are a separate benefit from the work, but NO in the context of the contract b/c they are hired for both

Related party transactions (ASPE 3840) measurement options/ criteria

Carrying amount: not in the normal course of operations. No substantive (>20%) change in ownership. no independent support for exchange amount. Book gain to cont surplus and RE Exchange amt (sales price): Normal course of ops and non NMT. or not normal course but has 3rd party support. or IS NMT but isn't property for sale AND had commercial substance Book through P/L IFRS: no specific criteria - use exchange amount

Perpetual debt

Contractual right to receive pmts at fixed days for the future. Classify as a liability bc of the contractual obligation to deliver cash

Performance obligation satisfied overtime (IFRS 15)

Criteria: (only 1 needs to be met) - The customer simultaneously receives and consumes the benefits provided by the vendor's performance (for example, rental of an office space). - The vendor's performance creates or enhances an asset (for example, work in progress on a construction contract on land owned by the customer) that the customer controls as the asset is created or enhanced. - The vendor's performance does not create an asset with an alternative use to the vendor, and the vendor has an enforceable right to payment for performance completed to date (for example, work in progress on custom equipment that the vendor cannot sell to another party due to the customization). Recognize revenue as a % of total costs (or other input) incurred to date

Convertible bonds (IFRS 9 / IAS 32 - ASPE 3856)

Debt component: measure at FMV using interest rate of a similar non convertible bond. Use EFFECTIVE interest rate for inputs ie int exp (but use stated rate for int paid - diff to Bond Pay) calcs. reduce bond payable for transaction costs Dr. Cash; CR bond pay and Cr cont surplus (diff in PV of bond vs non convert bond). measure at amortized cost Equity component: recognize in cont surplus. measure at historical cost. IF CONVERTED: update bond for most recent interest, then write off and record issuance of CS equal to amounts debited to debt and cont surplus. don't recognize a gain/loss ASPE: Option to record equity portion as zero or to record the more easily measured one at FMV and residual to other. Also choice with effective interest or straight line interest (IFRS = effective interest only)

Intangible Asset definition criteria and recognition criteria (IAS 38)

Definition: 1. Identifiable (is separable or arises from contractual/legal rights) 2. Entity controls the future economic benefits 3. Asset will generate future economic benefits Recognition: 1. It is probable that the expected benefit will flow to the entity 2. The cost can be measured reliably Both definition and recognition criteria have to be met to capitalize, otherwise expense. Record at FMV on acquisition date and recognize separately from GW. Assume that the probability of economic benefits are met on the basis that a company bought it

Non monetary transactions general measurement (ASPE 3831)

Measure at the FV of the asset given up, or received - which ever is more reliably measure. Use assed given up if both are equally reliable. Use carrying amount of asset given up if no FV is available/FV criteria aren't met

Assets held for sale

Measure at the lesser of CV vs FMV - Costs to sell; and record the loss of adjustment to net income Stop depreciating once classified as HFS Show as a current asset - separate from others in IFRS and show as current in ASPE if it was already current or it the sale happened before the completition of the FS

Discontinued operations (IFRS 5, ASPE 3475)

Measure at the lower of CV vs FV - costs to sell Show separate on the FS - One current asset line and one liability line Income stmt: Show one line item in OCI that is NET of: - Post tax profit/loss AND - Post tax gain/loss on the re-measurement Also show PY comparative for the segment for the IS

FVTPL

Must be used for assets held for trading Transaction costs are expensed

Basic EPS

Net earnings(loss) to SH / WACSO Net earnings = NI - Divs owed to cum p. shares - Divs declared to non cum p shares WACSO = Weighted average cs outstanding Assume that stock splits and stock divs are issued at the beg of the period & don't include treasury shares that are issued but not outstanding

Lessor Operating lease

Risks and rewards of ownership don't transfer Dr cash and Cr lease revenue 1 month of free rent: Dr, prepaid lease inducement - for the amt of discount and CR lease inducement obligation then Dr cash each month for the rent received and cr Rev and Cr the prepaid End of contract: Dr lease inducement liability - for the full amt and cr Rev and Cr prepaid

Joint Operation

Parties have joint operations, not structures through a separate vehicle. No investment account is maintained. Interests are reported directly on the FS. Recognize portion of assets/liabs at FMV of consideration given up, then recognize your portion of assets/liabs/rev/expenses going forward. (ie show everything individually b/c have rights to the individual things)

Joint venture (IFRS 11)

Parties only have rights to the net assets of the joint arrangement therefore use equity method (don't show individual JV things on your FS) Initial recognition if you didn't use cash: Dr. Investment, Cr realized gain (1-JV%), CR unrealized gain (JV%), CR asset (at book value). Amortize(realize) the unrealized gain over the useful life of the asset that was traded Remove impact of dividends and RPT's just like equity method.

Permanent Differences vs Temp Differences

Permanent: A rev/exp/gain/loss that is used in calculating acct or taxable income but never both. Ex 50% of a cap gain or of entertainment, or dividends received from a CCPC. No accounting impact from a permanent difference Temporary: Cause Deferred taxes (required in IFRS). When there is an acct vs tax difference from assets and liabilities. If the acct < tax basis then = DTA If Acct > Tax basis = DTL

Acquisition differential and GW formula

Purchase price - Net assets (%) = Acq differential +/- FV differentials (%) +/- tax impact of differentials = Goodwill Note: if the FV > BV then its a negative diff because that would decrease GW but if the BV > FV then its a positive and increases GW because you are paying excess of FMV When NBV > TAX = DTL and NBV < Tax = DTA Net assets = CS + RE

AFDA per IFRS 9

Recognize AFDA as a % of AR outstanding at the end of the year and bad debt expense based on *Expected* events not just ones that happened

Decommissioning Provision recognition criteria (IAS 37)

Recognize as a liability when all three apply: - Entity has a present obligation from a past event - It is probable that an outflow of resources is needed to settle - A reliable estimate can be made of the obligation Measure at best estimate using a pretax discount rate: DR Asset and CR Decommissioning provision Adjustment: DR interest expense (IFRS) Accretion expense (ASPE) and CR. Provision/ ARO liability

Lessor treatment for finance lease

Record the sale of the asset and set up the lease receivable at the PV of pmts to be received. If lessor is a manufacturer/dealer the lease results in revenue and must also recognize rev and cogs: DR. lease receivable and COGS; CR. Revenue and Equipment/inventory If theres a BPO: Revenue and Lease rec = PV lease pmts + PV BPO and COGS = Cost of inv If theres a G R value: Revenue & lease rec = PV lease pmts + PV G R value (unless also a BPO then use BPO) and COGS = cost of inv If theres an Ung R value: Revenue = PV lease pmts, Lease rec = PV lease pmts + PV residual, and COGS = Cost of inv - PV Residual Record interest income for earned but unpaid lease pmts at the end of the period (Dr lease receivable, Cr Interest income THEN Dr cash and cr lease receivable)

Internally generated intangible assets (IAS 38)

Research phase = ALL expensed Development phase = must first meet 6 criteria then can cap certain expenses. Can only defer expenses up to the extent that they can be recovered from FCF of the asset (IFRS = have to cap ASPE = option to cap development costs) Proprietor Right: A separate asset from an internally generated asset

Restricted fund method

Revenue is recognized when received/receivable in the appropriate fund. If a specific fund doesn't exist then use the deferral method in the general fund and recognize in line with expenses

Lessee's side of a lease (Capital lease IFRS 16)

The party that is paying to lease the asset. Record a ROU Asset (Depreciate ROU asset over lesser of lease term vs asset useful life (ie if BPO)) and lease liability (Dr liab, DR int exp, CR cash and CR liab) Int accrual at YE: Dr int exp and Cr lease liability FV = any expected pmt at the end of the least (BPO or Guaranteed residual value - not unguaranteed) PMT = include fixed and variable components TYPE = 1 if pmts are at the beg and 0 if pmts are at the end RATE = Use implicit rate if known, otherwise use borrowing rate

Public sector accounting

The public sector uses FS to show results of operations and how they are providing services. See flowchart in "Public sector accounting standards" -> Introduction to public sector accounting standards" "Appendix A"

Share options

The right to purchase at a preset price for X time period. Vested once exercisable. No entry on the grant date, entry at YE and the vest date On recognition: Dr Comp exp and Cr Cont surplus If redeemed: Dr cash, Dr cont surplus and CR shares If expired: Dr cont surplus - options Dr cont surplus - expired options

Donated goods and services (ASNPO 4410.16)

Two criteria must be met to recognize as a donation: - Fair value of the donation can be reasonably estimated - Goods and services are used in the normal course of operations & would otherwise have to be purchased Consider qualitative factors as well (is it actually better to recognize)

Variable consideration (IFRS 15)

Two methods: Expected value - the sum of the weighted probability of each outcome Most likely - use if there is only two possible outcomes In general the amt must be "highly probable" to be recognized in rev

Deferral method (NFP)

Unrestricted conts: Recognized then the 2 recognition criteria are met Restricted: Always deferred and then recognized when a related expense is incurred Capital assets: Defer and recognize in line with amortization. Land = direct increase to Net Assets - doesn't hit the IS! ie dr land and cr net assets Endowments: Direct increase to net assets ie dr cash and cr net assets. then when the received cash is invested, dr investment and cr cash Fund accounting is optional. Have to disclose restricted deferred conts

Convertible preferred shares

convert to C/S so has 2 equity components. recognize by dr cash and cr convert pref shares. Measure at historical cost. and convert to CS at the same cost as the PS regardless of mkt price

Lessor Finance Lease Criteria (IFRS 16)

l. Title transfers to the lessee by the end of the lease 2. Lease term = most of the economic life (>75%) 3. PV of min pmts = most of the FMV of the asset (<90%) 4. A BPO exists and will likely be exercised 5. Asset is specialized and only the lessee can use it without modification 1 - 3 = ASPE 3063 1 - 5 = IFRS (16.63)


Ensembles d'études connexes

Chemistry A level-periodic table and enthalpy module

View Set

Operator 1 chapter 5 sedimentation and floatation

View Set

Module 03: Quiz - Chapter 4 Operating Systems and File Management

View Set

100 sentences to travel / 100 frases para viajar

View Set

NS101-Ch.9 Worksheet: Atomic Physics

View Set