U.S. GAAP
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Avg score: 74% • Most missed: “Entities may elect the fair value option for recognized financial assets and fin…”
U.S. GAAP
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1. Considered non-compensatory if they meet certain requirements.

2. Recognition of gains is dependent on the rights of the leased property retained by the seller-lessee.

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

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

6. Impairment losses recognized in income statement and cost basis is reduced. If held-to-maturity - subsequent changes are not recognized. If available-for-sale - subsequent income is included in OCI.

7. Components of net periodic pension cost must be aggregated and presented as one amount on the income statement.

8. Finite life intangibles - two step process: compare carrying amount to undiscounted cash flows - then if carrying amount exceeds cash flows - impairment amount is the difference between carrying amount and fair value of asset. For indefinite life - c

9. Entities may elect the fair value option for recognized financial assets and financial liabilities. You cannot elect fair value on these: (1) VIE that is required to be consolidated (2) pension plan assets/liabilities (3) leased financial assets/liab

10. Effective interest method is required - unless the straight-line method is not materially different from the effective interest method. Amortization is done over the contractual life of the bond.

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

12. Percentage of completion and completed contract method allowed.

13. Lower of cost or market.

14. No requirement for explicitly stating following US GAAP.

15. No classification

16. Enacted tax rate only.

17. Enacted tax rate only.

18. Slight variation from year-end reporting.

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

20. Must disclose nature of operations - use of estimates - estimate of a change in estimate - vulnerability of the risk f near-term severe impact from a material concentration.

21. Characterized as having commercial substance and lacking commercial substance. Commercial substance (accounted for at fair value and all gains are recognized). Lacking commercial substance (gains are only recognized when boot is received). Losses are

22. 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.

23. Revaluation is not permitted.

24. Entities cannot apply the FASB conceptual framework to specific accounting issues

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

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