This is consistent with FASB codification ASC250-10-45-23 2. What effect, if any, does eVade’s decision to participate in the tax amnesty program have on the amount recognized as of March 31, 2012? According to ASC250-10-50-9 the participation in the tax amnesty program will cause a liability to be recorded in the current year statements and adjustments for prior periods. If comparative financial statements are issued, the prior year column will need to reflect the adjustment and a change in opening balance (retained earnings) for the current year. 3.
Case 13-8: Accounting for a Loss Contingency for a Verdict Overturned on Appeal 1. According to the case, it shows that management of M determined that a loss would be “probable” and the estimate range would be $15 million to $20 million. However, they determined $17 million would be the “most likely” amount of loss. According to ASC 450-20-25-1, “When a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. As indicated in the definition of contingency, the term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses.
The sum of the market or appraised values of identifiable assets acquired less the fair value of liabilities assumed exceeded the cost to Easton. After revaluing noncurrent assets to zero, there was still some “negative goodwill.” Proper accounting treatment by Easton is to report the amount as A. part of current income in the year of combination. B. a deferred credit and amortize it. C. an extraordinary gain. D. paid-in capital.
Alternatives: A. Recognize compensation expense at each year end and disclose swap transactions in the notes to the financial statements: Record the following entry at year end Dr. Compensation Expense XXX Cr. Paid-in Capital-Stock Options XXX This will reduce pre tax income and increase total paid-in capital B. Disclosure in notes to financial statements only IV.
When a net operating loss is carried back to a non-loss year, the net operating loss is a miscellaneous itemized deduction. ANS: F An NOL is a business loss. Therefore, the deduction is a deduction for AGI. PTS: 1 REF: p. 7-23 MULTIPLE CHOICE 1. Mable is in the business of factoring accounts receivable.
Liabilities are accounts that are owed out to a creditor, vendor or a bank. Liabilities are presented on the Balance Sheet and normally have a credit (negative) balance. A debit to a liability account decreases it while a credit will increase it. Liabilities are broken down to current and long term. The current liabilities are what is owed and is expected to be paid off on one year.
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?
His AMT basis restriction) when your rights in the tax. This is because the property may in the stock at the end of 2009 is acquired stock first become have a different adjusted basis for the $200,000. transferable or when these rights are AMT. Use this line to report any AMT
Recall the CCA rules. If a positive balance remains in an asset class when all assets are sold, this positive balance may be viewed as a terminal loss and must be deducted in full from taxable income, or carried back three years, or carried ahead up to 20 years. Note: 1. You may do this question by hand or using Excel. 2.
A ratio around .80 or 80% is considered high risk. 2. Current ratio = Current assets Current liabilities Purpose: Show the ability to pay short-term obligations (e.g. those liabilities due in one year or less) using current assets. As a rule of thumb, a healthy current ratio would be 2:1.