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

1. Enacted tax rate only.

2. 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.

3. 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.

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

5. 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.

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

7. Cost method or legal (par) method.

8. If year of change - all previous financial statements that are presented in comparative format along with the current year are to be restated to reflect the information for the new reporting entity.

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

10. Comparative financial statements not required. SEC requires comparative financial statements (2 B/S - 3 other). Cumulative effect is an adjustment to beginning retained earnings to the earliest prior period presented.

11. Recorded as an asset and amortized using the straight-line method.

12. Recognized in a two-step process: (1) recognition of the tax benefit (2) measurement of the tax benefit.

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

14. 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

15. Cost model: historical - accum. depr. = impairment

16. No requirement for explicitly stating following US GAAP.

17. 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.

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

19. When the direct method is used - entities are required to present a reconciliation of net income to net cash flows from operating activities.

20. Percentage of completion and completed contract method allowed.

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

22. No classification

23. Slight variation from year-end reporting.

24. Projection benefit obligation (PBO) is the defined benefit pension plan liability.

25. All gains and losses included in OCI

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