Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 3, Problem 1JC
1.
To determine
To provide: Two examples of judgments that could have a significant impact on the financial statements.
2.
To determine
To provide: Four examples of estimation uncertainty that might result in a material adjustment in future years.
3.
To determine
Whether the entity must disclose the estimation uncertainty.
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In accordance with AASB 9, the recognition of a financial asset or financial liability will be influenced by considerations as to whether there is a contractual right to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable, or potentially unfavourable, to the entity. Explain what this requirement means.
How does PFRS 9 distinguish between the measurement methods to be used in the standard? *
By reviewing the business model of each entity and the contractual cash flow characteristics of the instrument
By reviewing the realisability of the instrument and risks and rewards of ownership
By reviewing the realisability and the contractual cash flow characteristics of the instrument
By reviewing the business model of each entity and the risks and rewards of the transaction
Choose the letter of the correct answer.
Chapter 3 Solutions
Intermediate Accounting (2nd Edition)
Ch. 3 - Prob. 3.1QCh. 3 - Prob. 3.2QCh. 3 - Does U.S. GAAP require that companies disclose...Ch. 3 - Does IFRS require that companies disclose...Ch. 3 - Prob. 3.5QCh. 3 - Does IFRS require that companies disclose their...Ch. 3 - Prob. 3.7QCh. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Prob. 3.10Q
Ch. 3 - Prob. 3.11QCh. 3 - What is the Basis for Conclusions and where can...Ch. 3 - Prob. 3.13QCh. 3 - Prob. 3.14QCh. 3 - Prob. 3.1BECh. 3 - Judgment in Accounting for Plant and Equipment....Ch. 3 - Match Each Cognitive Bias Below with its...Ch. 3 - Prob. 3.4BECh. 3 - Prob. 3.5BECh. 3 - Prob. 3.6BECh. 3 - Prob. 3.7BECh. 3 - Codification Research. Referencing Appendix A,...Ch. 3 - Prob. 3.9BECh. 3 - Prob. 3.10BECh. 3 - Exercises E3-1. Accounting Policy Disclosures. To...Ch. 3 - Cognitive Bias. A team of accounting students is...Ch. 3 - Cognitive Bias. A team of accounting students is...Ch. 3 - Authoritative Literature. Provide the reference to...Ch. 3 - Authoritative Literature. Provide the reference to...Ch. 3 - Authoritative Literature. To what entity types...Ch. 3 - Authoritative Literature. How does FASB define...Ch. 3 - Prob. 3.8ECh. 3 - Prob. 1JCCh. 3 - Prob. 2JCCh. 3 - Prob. 1SSCCh. 3 - Surfing the Standards Case 2: Inventory...Ch. 3 - Basis for Conclusions Case 1: Judgment and...Ch. 3 - Basis for Conclusions Case 2: Income Statement or...
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- Choose the correct.Which of the following statements concerning U.S. GAAP is true?a. Does not require segment information to be reported in accordance with generally accepted accounting principles.b. Does not require a reconciliation of segment assets to consolidated assets.c. Requires geographic area information to be disclosed in interim financial statements.d. Requires disclosure of a major customer’s identity.arrow_forwardChoose the letter that correponds to the answer.arrow_forwardDiscuss the following terms used in MFRS 108 Accounting Policies, Changesin Accounting Estimates and Errors, and MFRS 137 Provisions, ContingentLiabilities and Contingent Assets. Provide brief examples to support thediscussion: i)Retrospective method ii)Prospective method iii)Contingent assetsarrow_forward
- Under what cisrcumstances under PFRS 9 can an entity classify financial assets that meet the amortized cost criteria as at FVTPL? A. where the business model approach is adopted B. where the financial asset passes the contractual cash flow characteristics test C. where the instrument is held to maturity D. if doing so eliminates or reduces an accounting mismatcharrow_forwardTRUE OR FALSE 1. The application of PFRSs, with additional discostire when necessary, is presumed to result in financial statements that achieve a fair presentation. 2. According to PAS 1, an entity shall make an explicit and unreserved statement of compliance with the PFRSs in the notes only if the entity complies with all the requirements of PFRSS. 3. PAS 1 encourages, but does not require, the presentation of the preceding year's financial statements as comparative information to the current year's financial statements. 4. According to PAS 1. assets and liabilities or income and expenses are offset, unless separate presentation is required or permitted by a PFRS 5. According to PAS 1, PFRSs apply to financial statements as well as to other information presented in an annual report a regulatory filing or another document. 6. According to PAS 1, the line item "Cash and cash equivalents" should always be presented first in the statement of financial position. 7. PAS1…arrow_forward1. Which statement is incorrect regarding materiality judgments? A. An entity is only required to apply recognition and measurement equirements in PFRSS when the effect of applying them material. B. An entity need not provide a disclosure specified by a PFRS if the information resulting from that disclosure is not material. C. Public availability of information relieves an entity of the obligation to provide material information in its financial statements. D. It is inappropriate for the entity to make, or leave uncorrected, immaterial departures from PFRSs to achieve a particular presentation of its financial position, financial performance or cash flows. 2. Which of the following is an appropriate aggregation? A. Cash and cash equivalents (Cash in bank and sinking fund) B. Trade and other receivables (Accounts receivable and investment in bonds) C. Trade and other payables (Accounts payable and accruals) D. Provisions (Income tax payable and warranty liability) 3. Which of the…arrow_forward
- Choose the letter that corresponds to the answers.arrow_forwardThe issues that the FASB and IASB must address in developing a conceptual framework include all of the following except: a. should the characteristic of relevance be traded-off in favor of information that is verifiable? b. should a single measurement method such as historical cost be used? c. what are the key elements of asset and liability definitions? d. should the role of financial reporting focus solely on internal decision-making?arrow_forwardAccdg. to PAS , related party disclosures are necessary * to indicate the possibility that an entity's financial position and performance might have been affected by the existence of such relationship because related party transactions may have resulted to assets and liabilities that were recognized in the financial statements of the reporting entity to notify users of financial statements of the fact that related party transactions may not have been made on arm's length basis in order to eliminate or minimize the effects of related party transactions on the FS of the reporting entityarrow_forward
- Which of the following is not a required disclosure under PAS 1? * The financial effect of a departure from a PFRS when an entity departs from a PFRS requirement. Any material uncertainties on the entity's ability to continue as a going concern. The recognition, measurement and disclosure of specific transactions and other events. The reason for using a longer or shorter O period when an entity changes the frequency of its reporting.arrow_forwardIAS 37 Provisions, contingent liabilities and contingent assets prescribes the accounting and disclosure for those items named in its title. Required Define provisions and contingent liabilities and briefly explain how IAS 37 improves consistency in financial reporting.arrow_forward(a) Explain and give an example of the effect on a set of published financial statements if the going concern convention is held not to apply. (b) Explain in general terms what the IASB Conceptual Framework is trying toarrow_forward
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