State separately the amount of (a) cost of tangible goods sold, (b) operating expenses of public utilities or others, (c) expenses applicable to rental income, (d) cost of services, and (e) expenses applicable to other revenues. FASB ASC 225-10-S99-8 covers the reporting of the depreciation: If cost of sales or operating expenses exclude charges for depreciation, depletion and amortization of property, plant and equipment, the description of the line item should read somewhat as follows: "Cost of goods sold (exclusive of items shown separately below)" or "Cost of goods sold (exclusive of depreciation shown separately below)." To avoid placing undue emphasis on "cash flow," depreciation, depletion and
a. According to FASB ASC 225-10-S99-2 (b) states if income is derived from more than one of the sub-captions described under § 210.5–03.1, each class which is not more than 10 percent of the sum of the items may be combined with another class. If these items are combined, related costs and expenses as described under § 210.5–03.2 shall be combined in the same manner. b. Net sales and gross revenues.
awrtuaworu artoawruor ouwropwauirawr powuerpo;;awrtja;wej;l.. Accounting Principles Business entity principle: Every business is accounted for separately from its owners personal activities. 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
* 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
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.
If no service contract exists, those fees are recognized over the average customer relationship period. Associated expenses are deferred only to the extent of such deferred revenue. For contracts that involve the bundling of services, revenue is allocated to the services based on their relative fair value. AT&T Inc. records the sale of equipment to customers as gross revenue when AT&T Inc. is the primary obligor in the arrangement, when title is passed and when the products are accepted by customers. For agreements involving the resale of third-party services in which AT&T Inc. is not considered the primary obligor of the arrangement, AT&T Inc. records the revenue net of the associated costs incurred.
GAAP prohibits presentation of cash flow per share while IFRS does not explicitly prohibit it. GAAP says: interest classifies as operating, dividends classify as operating, and dividends paid are classified as financing. IFRS requires that each of the three be reported in a consistent
Distinguish among operating, investing, and financing activities. Managers’ activities and responsibilities can be classified into three broad functions. List and discuss each function. Identify and discuss the relevant costs in accepting an order at a special price Smith & Company claims that the relevant range concept is only important for variable costs. Explain the relevant range concept and discuss whether you agree with Smith & Company.
FASB and IASB Convergence Introduction FASB (Financial Accounting Standards Board) is an independent board consisting of accounting professional who develop and communicate Standards of financial accounting and reporting in United States. IASB (Independent Accounting Standards Body) is an organization responsible for the development and publication of IFRS (International Financial Reporting Standards) as developed by the IFRS interpretation committee. Goodwill Goodwill is an accounting term, which refers to the value of an asset that is invisible but has a quantifiable “prudent value” in the business. Financial Accounting Standards Board uses a two-step process to determine if the goodwill is impaired. The first being Recoverability Test, this step indicate the goodwill is impairment.
The FASB has stated that it intends the Conceptual Framework Project to be viewed not as a package of solutions to problems but rather as a common basis for identifying and discussing issues, for asking relevant questions, and for suggesting avenues for research. The Conceptual Framework Project has resulted in the issuance of eight statements of Financial Accounting Concepts that impact upon financial accounting: No.1-Objectives of Financial Reporting by Business Enterprises (superseded); No.2-Qualitative Characteristics of Accounting Information (Superseded); No.3-Elements of Financial Statements of Business Enterprises (Superseded); No.5-Recognition and Measurement in Financial Statements of Business Enterprises; No.6-Elements of Financial Statements;” No. 7-“Using Cash Flow Information and Present Value in Accounting Measurements” and No. 8 “Conceptual Framework for Financial Reporting (Chapters 1 & 3). ii.