37‚ a provision is recognized for a legal or constructive obligation arising from a past event‚ if there is a probable (more likely than not) outflow of resources and the amount can be estimated reliably (IAS 37.14). In contrast‚ according to FASB ASC 450-20-25-2‚ a contingency (provision) is recognized if it is probable (likely) that a liability has been incurred and the amount is reasonably estimated. Scenario 1 (1) Under IFRSs: According to IAS 37.22‚ the contamination of the land gives rise to
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HasSpace NeedsLease is renting a space for its corporate office from HasSpace by entering into a lease agreement. The agreed lease term is for 10 years and there is no option to renew nor is the ability to negotiate renewal of the term. According to ASC 840 (5F of statement 13)‚ the lease is classified as operating lease. The agreement includes two provisions that may require NeedsLease to perform certain activities at its cost. The first provision requires that the lessee‚ NeedsLease‚ may have to
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that we as auditors are responsible for assuring that it is valued fairly and that it follows FASB ASC 450. To help organize and apply this practice‚ a supplement to the section is 337-B. This document is an excerpt from FASB ASC 450. Auditors can use this as the standard to be met in regards to the accounting for loss and gain contingencies and the proper way to disclosure the contingency. ASC 450 also directs auditors on how management should assess the probability of a contingency. Lastly‚ the
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financials by adhering to accounting standards. First let’s discuss whether it is appropriate for WWA to include the subsidiaries’ October 31st financial information on their December 31st statements‚ regardless of the hypothetical event. According to ASC-810-10-45-12‚ subsidiary information can be consolidated with parent information if the difference in reporting period is less than three months. WWA’s auditors still wonder if more timely information can be obtained although the October 31st information
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(1331134) Econ 112 Auditing Attestation Ringo Company Receivable: After reviewing the account receivable for Ringo Pistachio Company‚ I have determined that the account is now a loss contingency. After close consideration‚ I have concluded that FASB ASC 450-20 is applicable to this situation. The codification requires the accrual of a loss when it is probable that an asset has been impaired at the date of the financial statements and when the amount of the loss can be reasonably estimated. Since Ringo
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AS P0 E AD O Y Y0 Output P0 = Equilibrium Price Level Y0 = Equilibrium Level of Output. o Shifts in ADC and ASC: Case 1: A Rightward shift in ADC due to an increase in nominal money stock. AS P1 E1 P0 E AD1 AD O
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A nonprofit organization is fundamentally different than a for-profit organization. A social mission is at the center of a nonprofit and the organization exists to provide a particular service or services to the community and there is no “bottom line”. A for-profit organization exists primarily to generate a profit for the shareholders/owners. There are numerous differences between nonprofit and for-profit entities in addition to the fundamental differences stated above. The main differences
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incurred beyond the Research and Development stage can be capitalized when it is pertaining to the development of software that is to be sold‚ leased‚ or otherwise marketed to third parties. Standard 985-330-25-1 applies to these costs as the FASB ASC defines the Product Masters as "a completed version‚ ready for copying‚ of the computer software product‚ the documentation‚ and the training materials that are to be sold‚ leased‚ or otherwise marketed". The company has established technological
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CHAPTER 2 SOLUTIONS TO B EXERCISES EXERCISE 2-1B (15–20 minutes) (a) True. (b) False – General-purpose financial reports helps users who lack the ability to demand all the financial information they need from an entity and therefore must rely‚ at least partly‚ on the information in financial reports. (c) False – Standard-setting that is based on personal conceptual frameworks will lead to different conclusions about identical or similar issues. As a result‚ standards will not be consistent
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2010 1. In general‚ evaluate Caltron’s revenue recognition policy and the quality of Caltron’s earnings. Caltron Computers‚ Inc.‚ a computer hardware company‚ is publicly held with market capitalization amounting to over $450 million. Carlton’s system designs enable their mini-computer systems to measure up to the power of mainframes with small cost outlays. The accounting practices at Carlton normally permit revenue recognition after the shipment of the computer systems
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