S. is working on a convergence project with the FASB. sets the accounting standards for only European countries. plays only a minor part in accounting rule making throughout the world. 3. (TCO A) International GAAP‚ or i-GAAP: (Points: 5) has different standards than under U.S. GAAP. has some commonality with
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Accounting Standards Board (FASB) defined rules that made it mandatory under Generally Accepted Accounting Principles (US GAAP) to report sources and uses of funds‚ but the definition of "funds" was not clear. Net working capital might be cash or might be the difference between current assets and current liabilities. US GAAP permits using cash alone or cash and cash equivalents. US GAAP (FAS 95) requires that when the direct method is used to present the operating activities of the cash flow statement
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expecting high EPS. Partially as a result the stock price of Apple plunged down by 36%. As a result of this accounting treatment the financial (profitability) ratios of Apple also suffered. Consequently keeping in mind all the investors Apple included non GAAP figures in its financial statements. However Apple was benefited as due to this free software update the app store was accessible and huge revenues were recorded from this. Excel Sheet Apple Inc. Select Historical Financial Data 1b. Apple Inc. Unaudited
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Officer (CFO) of Excello contemplates recording a $1.2 million sale at the end of 2010 instead of in January 11‚ 2011. The issue at hand is that according to Generally Accepted Accounting Principles (GAAP) Excello must record this sale according the revenue recognition principle. If recorded according to GAAP‚ the accounting department records the $2.1 million sale to the accounts receivable account until the product ships‚ at which time the transaction records to the earned revenue account. If Reed records
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Case 10-2 1. Ida needs to test the U.S. commercial building for recoverability under both U.S. GAAP and IFRSs. Recoverability test is one of the requirement tests for impairment. As a result‚ we need to verify if impairment should be recognized. 2. The impairement is $600‚000. GAAP methodology of determining impairment uses a two-step recoverability test. Step one‚ requires a company to estimate the future undiscounted cash flows expected from the use of that asset and its eventual disposition
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CHAPTER 3 INTERNATIONAL CONVERGENCE OF FINANCIAL REPORTING Answers to Questions 1. The ultimate goal of both harmonization and convergence is to achieve international comparability in financial reporting‚ and both are processes that take place over time. However‚ while harmonization refers to the reduction of alternative accounting practices in different countries‚ convergence refers to the process of developing a set of high quality financial reporting standards for use internationally (the process
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generally accepted accounting principles (GAAP)‚ these two strategies are preferred over direct write-off of bad debt expenses. Percentage of receivables and percentage of sales provide a business with the ability to accurately estimate the expected bad debt losses they will have in each succeeding fiscal reporting period." Percentage of sales method is a good way to see an estimate for bad allowance under the Henerally Accepted Accounting Principles (GAAP).For GAAP it does not allow a direct write off
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construction doesn’t need to be included here since it is discussed in the footnotes. 3. Lawsuits are normally included in the footnote. b. These are Allison’s reporting deficiencies: 1. The fact that there wasn’t a consistent application of GAAP should be included in a separate paragraph. 2. There should be a separate paragraph stating the client’s unwillingness to provide a statement of cash flows. 3. The word material isn’t included in the first paragraph when referring to “material
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References: Deloitte Touche Tohmatsu (2008). IFRS and U.S. GAAP A Pocket Comparison. Retrieved on November 7‚ 2011 from: http://www.iasplus.com/dttpubs/0809ifrsusgaap.pdf FASB (1981).Statement of Financial Accounting Standards No. 51. Retrieved on November 7‚ 2011 from: http://www.fasb.org/pdf/fas51.pdf IASB
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Financial Accounting and Accounting Standards ASSIGNMENT CLASSIFICATION TABLE Topics 1. 2. 3. 4. 5. Subject matter of accounting. Environment of accounting. Role of principles‚ objectives‚ standards‚ and accounting theory. Historical development of GAAP. Authoritative pronouncements and rulemaking bodies. Role of pressure groups. Ethical issues. Questions 1 2‚ 3‚ 29 4‚ 5‚ 6‚ 7 8‚ 9‚ 10‚ 11 12‚ 13‚ 14‚ 15‚ 16‚ 17‚ 18‚ 19‚ 20‚ 21‚ 22‚ 23 23‚ 24‚ 25‚ 26‚ 27‚ 28 30 Cases 4 6‚ 7 1‚ 2‚ 3‚ 5 8 3‚ 9‚ 11‚
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