However, it does not specify when to recognize or how to measure the items that make up comprehensive income. In reporting comprehensive income, companies are required to use a gross disclosure technique for classifications related to items of other comprehensive income other than minimum pension liability adjustments. For those classifications, reclassification adjustments must be disclosed separate from other changes in the balances of those items so that the total change is disclosed as two amounts.
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.
The objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in conformity with an identified financial reporting framework of Generally Accepted Accounting Principles. In essence, materiality should function as a cut-off threshold to determine the nature of the audit testing. Auditors should not reveal its materiality level to clients because clients might take advantage of it to deceive the auditors and make its financial statement better. When the Deloitte auditors are suspicious of certain accounts, they not only can’t reveal it but also make more substantive investigation into these accounts. Question 4: Existence: the
GAAP is more specific within each category while IFRS is more flexible. Under GAAP, both the indirect and direct method net income must be reconciled to net flows from operating activities while IFRS only requires reconciliation under the indirect method. IFRS requires the two most recent years to be presented while GAAP does not. Disclosure under IFRS is required for cash flows from discontinued operations. GAAP prohibits presentation of cash flow per share while IFRS does not explicitly prohibit it.
You have the right to dispute the accuracy of information that Wells Fargo Bank, N.A. has furnished to a consumer reporting agency by writing to us at Wells Fargo Servicing, P.O. Box 14415, Des Moines, IA 50306-3415. Please describe the specific information that is inaccurate or in dispute and the basis for the dispute along with supporting documentation. If you believe the information furnished is the result of identity theft, please provide us with an identity theft report.
Analysis of Issue On what basis did Medicis initially justify the use of replacement cost to estimate returns? Why is it valid or invalid? Medicis justified the use of replacement to estimate returns using ASC 605-15-15-2 (Revenue Recognition - Products – Scope and Scope Exceptions) which states including: 15-2 (a). [E]xchanges by ultimate customers of one item for another of the same kind, quality, and price (for example, one color or size for another) are not considered returns for purposes of this Subtopic. E&Y reasoned this as it creates an exception to the general rule of reserving for expected future product returns at the gross sales price and deferring the recognition of an equal amount of revenue.
Material participation is a concept used by the law to determine what qualifies as a passive activity. A passive activity is defined as any business or trade activity that the taxpayer does not materially participate in running. Therefore, material participation as a concept helped with the difficulty in dealing with such a subjective issue. It is important to distinguish passive income from active income, since losses are treated differently under each classification on the taxpayer’s tax return. Problems:
According to Schroeder, Clark, & Cathey (2011), a contingency is a future event that could have an impact on the business. The “concern has been that disclosures under the current standard do not provide enough information to allow those who use the financial statements, such as investors to adequately assess the likelihood, timing and amount of liability related to the loss contingency” (Holme, C.). When a loss is possible, we can report the contingency financial statements—the statements do not reflect
| Financial Restatement | Accountant 537 | | Jocelyn Olivares | 2/19/2012 | Instructor: Corrine Hasbany | After the release of the statements, errors can be found by the company, company’s internal auditors or external auditors. If the error is deemed to be material to the financial statements, those statements are required to be corrected and re-issued to users. Materiality relates to a financial statements item’s impact on a company’s overall financial condition and operations (Kimmel, Weygandt, & Kieso, 2007, P 69). Materiality is determined by whether the error would cause users to come to inaccurate conclusions in their analysis. Immaterial would be something that is too insignificant to impact the
Factors for consideration a. law’s non-logical implications in interpretation what parties would’ve agreed to (ex. Haines: duration and scope of contract) - policy: at-will doctrine in employment: policy - would’ve agreed to terms had they anticipated situation - had in mind, but didn’t express it b. context - what is the objective of the contract? Is it ambiguous? Ex. Spaulding v. Morse (369): stop yearly payment to trust during time in armed services - enforce according to terms if unambiguous, consider context if terms are ambiguous - not only context at time of contract formation, but also what happened AFTER ⇨ changed circumstances - why look at context?