U.S. GAAP
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U.S. GAAP
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25 Questions

1. Indirect direct costs paid by the lessee are expensed when incurred.

2. Existing condition - situation - or set of circumstances involving varying degrees of uncertainty that may result in the decrease in an asset or the incurrence of a liability. A provision for a loss contingency should be accrued with a charge to inco

3. Revaluation is not permitted.

4. Should be classified as current or non-current based on the classification of the related asset or liability. If no asset/liability - timing of the reversal is used. All assets/liabilities must be netted (one net current and one net non-current).

5. Funded status is reported of an overfunded pension plan is reported in full as a noncurrent asset. Underfunded plans are reported as current - non-current - or both.

6. No separate recognition is given to the conversion feature when convertible bonds are issued. Bonds are recorded in same manner as non-convertible bonds.

7. Entities have two choices when accounting for gains and losses: (1) recognize on the income statement in period incurred (2) recognize in OCI in the period incurred and then amortize to pension expense using the corridor approach.

8. The subsequent event evaluation period extends through the date that the financial statements are issued (public companies) or the date that the financial statements are available to be issued (all other entities). Subsequent events are classified as

9. Segment profit or loss - assets.

10. Probable is defined as likely to occur and reasonably possible is defined as more likely than remote - but less than likely.

11. Slight variation from year-end reporting.

12. (Balance sheet - income statement - SOCF) as of the most recent fiscal quarter and as of the end of the preceding fiscal year.

13. Valuation allowance is recognized when it is more likely than not that part or all of the deferred tax asset will not be realized.

14. Costs before technological feasibility must be expensed - costs after technological feasibility are capitalized.

15. Interest and dividends received - interest paid and taxes paid are CFO. Dividends paid are classified as CFF.

16. Percentage of completion and completed contract method allowed.

17. Two Step Test: (1) test for recovery: compare carrying value to undiscounted future cash flows (2) calculate impairment: difference between carrying value and fair value. Reversal of impairment losses is only permitted for assets held for sale.

18. Not required to match consumption. No requirement to review method - life - or salvage value at year end. Can use composite or component depreciation.

19. Bank overdrafts are excluded from cash and classified as financing cash flows.

20. Components of net periodic pension cost are SIRAGE: service cost - interest cost - return on plan assets - amortization of prior service cost - gain/loss amortization - existing net obligation/asset amortization.

21. Unrecognized prior service cost and unrecognized pension gains and losses are reported in AOCI. The pension benefit asset/liability is equal to the funded status of the pension plan.

22. No requirement for disclosure of key management compensation arrangements.

23. No classification

24. Asset not required to be remeasures - but does get tested for impairment once classified as held-for-sale

25. Revenue recognized when realized or realizable and earned. Four criteria must be met for each element of a contract before revenue can be recognized: persuasive evidence of an arrangement exists - delivery has occurred or services have been rendered

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