450-20-25-2 states that we must recognize a liability when it is probable and estimable. The facts in this case state, that management has ascertained that a loss is probable. They go on to state that there is a range of the estimated loss which is $15,000,000 to $20,000,000, with $17,000,000 being the most likely amount of loss within the range. In my opinion M should accrue the loss in 2007 for the amount of $17,000,000. The amount is determined with guidance from 450-20-30-1, which states to accrue the low end of a range, unless one estimate is more likely than another.
Should impairment testing be completed on intangible assets, and if so, how often? 3. How should prior periods be corrected for financial reporting and taxes to correct incorrect treatment for intangible asset expenses? Conclusions: 1. ASC 350-30-35-1: Expenses related to intangible assets that have a finite useful life must be capitalized and amortized over the useful life of the intangible assets.
Therefore impairment exists. ASC 320-10-35-33A: If an entity intends to sell the debt security (that is, it has decided to sell the security), an other-than-temporary impairment shall be considered to have occurred. ASC 320-10-35-33B: If an entity does not intend to sell the debt security, the entity shall consider available evidence to assess whether it more likely than not will be required to sell the security before the recovery of its amortized cost basis (for example, whether its cash or working capital requirements or contractual or regulatory obligations indicate that the security will be required to be sold before a forecasted recovery occurs). If the entity more likely than not will be required to sell the security before recovery of its amortized cost basis, an other-than-temporary impairment shall be considered to have occurred. ASC 320-10-35-33C: If an entity does not expect to recover the entire amortized cost basis of the security, the entity would be unable to assert that it will recover its
Assignment 6: Insurance and Consumer Protection (26.0 points) 1. Think of a real or made up but realistic example of a pure risk that you or someone you know may face, and then answer the questions below. a. Describe the specific risk. loosing a job b.
The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle). Requirement 2 – B Hudson’s wholesale inventories should be reported on the balance sheet at the replacement cost amount. The text indicates that the replacement cost is less than the NRV (or ceiling) and more than the NRV-NP (or floor) making the
a. As a current liability. b. As a deduction from the related installment accounts receivable. c. Within the net amount of installment accounts receivable.
Therefore it is fundamental that the company acquire an insurance policy with enough coverage for partial hull damages and total hull losses that doesn’t boost overall costs unjustifiably. The main purpose of this management report is to establish the best alternative to self-insurance by the company, given the three possible options: Continue as self-insured, Quote one, and quote two. These options are examined based on the following probabilities than an event actually happens. 1. Probability of 0 total hull loss in a given year 2.
They test their goodwill for impairments annually. The steps to test for it are to estimate the fait market value, compare the fair value with carrying amount (if carry value is more than the fair value, goodwill is impaired), and the company records the impairment loss equalling excess of carrying value over fair market value of goodwill. 5. Certain other indefinite-lived intangibles and other long-lived assets (including intangible assets with a finite life) are also subject to impairment assessment. Did Nike incur any of these impairment charges in 2009?
The key words of the search are “liabilities” and “debt”. Per ASC 470-10 (Debt-Overall): 45-11 Current liabilities shall include long-term obligations that are or will be callable by the creditor either because the debtor's violation of a provision of the debt agreement at the balance sheet date makes the obligation callable or because the violation, if not cured within a specified grace period, will make the obligation callable. Accordingly, such callable obligations shall be classified as current liabilities unless either of the following conditions is met: a. The creditor has waived or subsequently lost
Further, separate revenues, expenses, gains, losses, and reclassifications are also provided for each class of net assets. It can also be noted that expenses are reported as decreases in unrestricted net assets. The Statement of Cash Flows is the third statement required. This statement uses the standard FASB categories of operating, investing, and financing. Either the direct or indirect method is permitted.