Going concern principle: The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless the evidence shows that it will not continue. Objectivity principle: The accounting guideline that requires financial statement information to be supported by independent , unbiased evidence rather than someone’s opinion; objectivity adds to the reliability, verifiability, and usefulness of accounting information. Cost principle: The accounting principle that requires financial statement information to be based on actual costs incurred in business transactions; it requires assets and services to be recorded initially at the cash or cash equivalent amount given in exchange. Revenue recognition principle: Provides guidance on when revenue should be reflected on the income statement; the rule states that revenue is recorded at the same time it is earned regardless of whether cash or another asset has been exchanged. Business Organizations Single proprietorship: A business owned by one individual, which is not organized as a corporation; also called a sole
Running head: Business Law Rachel Lavender Western Governors University 2/21/11 PART A Sole Proprietorship A sole proprietorship is how most business entities begin. This type of business is owned and operated by one person. The main advantage of this type of business is that the owner does not need to get the approval of a partner or board in order to make decisions. A significant disadvantage is that, in a sole proprietorship, there is no separation from the business and personal assets, therefore, there is unlimited personal liability to the owner’s personal assets. · Liability-There is no difference between personal and business assets.
* Milestone payment revenue should then be spread out on a pro rata basis as products are distributed under the license and distribution agreement. Differences under IFRS? * Since the agreement has just one deliverable, and the agreements went into effect at the same, no material difference exists when comparing GAAP and IFRS. * However, under IFRS, one could record revenue up-front, mainly from the milestone
Find definitions for the following: 1. Securities. The evidence of debt or ownership or a related right. It includes options and warrants as well as debt and stock. 2.
The book basis of the transferred equipment was $6 million, and the equipment was recently appraised for $6.5 million. The fair value of the investment in Theta is $5.5 million as reasonably determined. Acer has a significant influence over Theta, but does not control financial interest in Theta. Under U.S. and international standards the appropriate accounting for this transaction is for the investment under Acer Corp to be accounted for using the equity method in the consolidated financial statements, or under the fair value option for US headquartered companies only. The FASB ASC 845-10-30 provides guidance for certain nonmonetary exchanges in which one entity transfers nonfinancial assets to a second entity in exchange for a noncontrolling ownership interest in that second entity.
Case 9.3 Facts: - DeviceCo and Pharmador form a joint venture (LeaseMed) - LeaseMed plans to lease an equipment from manufacturer unrelated to DeviceCo and Pharmador - Board approval is necessary for ongoing business activities (over $50,000) - LeaseMed created with initial cash contribution of $55,000 by DeviceCo and $45,000 by Pharmador. - Loses and profits divided 55:45 accordingly - Board of director - 3 members from each DeviceCo and Pharmador - Financing $550,000 from DeviceCo and $450,000 from Pharmador, no investment grade debt - All equity meets the definition of "equity at risk" - Expected losses exceed $ 1 million 1. Can either venture qualify for business scope exception, which would exempt the investors from remaining provisions
It provided liability coverage to authorized drivers of its vehicles. This coverage was automatic. There was not a separate charge as there was for other coverages such as collision. Self-insured entities informing drivers that they will be covered up to the minimum limits required by the state of the accident do not convert themselves into liability insurers that sell or issue insurance policies and that must comply with the mandatory offering laws. Accordingly, National was not required to offer underinsured motorist coverage to drivers under the self-insured statute, which requires only self-insurers to provide uninsured motorist coverage.
MSc in Corporate Finance: Advanced Corporate Finance Denys La Tour Xinyi Pei Paul Michel Jean-Cyril Vaissié Alice Lamberton Professor: Florencio Lopez de Silanes Molina 2/7/2012 Denys La Tour Xinyi Pei Paul Michel Jean-Cyril Vaissié Alice Lamberton AGENDA: Case overview | Japanese corporate governance vs U.S. corporate governance | Foreign investors motivations and shareholders rights in the law | Shareholders rights and dividends policy | Self-dealing and organization in Keiretsu and shareholders control of the accounts | Take over of Koito, implication (about its activities with Toyota) and large shareholders in corporate governance | What really happened | 1 2/7/2012 CASE OVERVIEW: CASE OVERVIEW: Pickens bought 20.2% of the Koito shares (undisclosed seller and amount) The board refused an increase of dividends, but accpeted it after Koito rejected the demand of Pickens to review the accounts. Pickens and Koito launched publicity campaigns against each other. Sep 20 Mar 9 Jun 27 Mar 30 1989 1990 Jan 15 Mr Watanabe, tried to oblige Toyota to buyback his Koito shares. Toyota did not oblige. Hence, Mr Watanabe opened discussion with Mr. Pickens from the U.S.
The lease part of the contract is where the owner agrees to let you lease their property, while you pay them rent for a stated period of time. During the lease period, the owner can not raise the rent, rent it to anyone else, or sell the property to anyone else. The option part of the contract represents the right you purchased to buy the property in the future,
CAPM Model is used in calculating re. Since we chose CAPM model to calculate re, then the assumptions of the CAPM Model have to be followed correspondingly. (Some important assumptions of the CAPM Model: 1) Investors are rational and risk-averse 2) Investors are price takers 3) There is no transaction or taxation costs 4) Investors may lend and borrow unlimited amounts using the risk free rate 5) Investors have the same information at the same time, etc. 2. rd and re remain constant for Midland and each of its three divisions For simplicity, I assume rd and re remain constant. 3.