Intermediate 1 Research Paper

Intermediate account statement 1 (3367) Fall 2012 Research Assignment Questions Directions Type your declaration starting on the line after each question.1. FASB Accounting Standards codification FASCa. When did the FASC Codification become powerful? The FASC became effective for interim and annual periods ending after September 15, 2009 even though the authoritative stochastic variable of the Codification was released on July 1, 2009.b. Did the FASC change prior generally accepted accounting principles? The FASC did not change prior GAAP just now it instead reorganized previous GAAP into a new structure. This new structure is organized into a new research database that is supposed to be user friendly and make finding certain GAAP easier to use.c. What does the FASB expect from the new FASC structure and system? The FASB has high expectations from the new FASC system including reducing the amount of quantify and effort that is use to solve an accounting research issue. The FA SC also expects the Codification to mitigate the risk of disobedience through easier usability of accounting literature. The Codification is also expected to provide accurate information through realisticly time updates whenever Accounting Standards Updates ar released and to assist the FASC with all of the research and convergence efforts.d. What are the topics used in the ASC? There are six major topics that are used in the ASC. The first one is The superior general Principles Area which includes broad conceptual matters. The next one is The Presentation Area which shows information is presented in the financial statements.The Assets, Liabilities, and Equity Areas have guidance on all of the balance sheet accounts while the Revenue and get down Areas have guidance on all of the income statement accounts. The next topic that is used in the ASC is The unspecific Transactions Area which deals with just about financial statement accounts and is generally transaction based. T he final topic used in the ASC is The Industry Area which contains guidance on how to account for specific industries or activities.e. Are second gear references included in the ASC? There are SEC references included in the ASC which are used to improver the utility of the Codification for public companies. The referenced materials include Regulation S-X, Financial Reporting Releases, Interpretative Releases, and some SEC staff guidance.2. Transfer of Receivables FASC 860-10(a) Identify relevant Codification section that addresses transfers of receivables. The main relevant Codification section that addresses the transfer of receivables is FASC 860-10-55. While there is information in other sections, most of it is found within section 55.b) What are the objectives for reporting transfers of receivables? The main objective for the reporting transfers of receivables is to provide users with an understanding of a transferors continuing involvement with any transferred financial sum mations. It is also to provide any restrictions on pluss reported in the financial statements and also to show how a transfer of financial assets affects a businesss financial position, financial performance and cash flows.(c) Provide definitions for the following 1. Transfer.A transfer is the conveyance of a noncash financial asset by and to someone who is not the issuer of that financial asset. 2. Recourse. Recourse is the right of the transferee of receivables to receive payment from the transferor of those receivables for blow of debtors to pay when due, the effects form prepayments, or adjustments resulting from defects in the eligibility of the transferred receivables. 3. Collateral. Collateral is any personal or real property in which a security interest has been given.(d) Provide other examples (besides recourse and collateral) hat discipline as continuing involvement. Several examples of continuing involvement that are provided by the ASC include Servicing arrangements, agreements to get or redeem transferred financial assets, arrangements to provide financial support and the transferors beneficial interests in the transferred financial asset.3. Inventories FASC 330-10(a) Identify the primary authoritative guidance for the accounting for inventories. The primary authoritative guidance for the accounting of inventories is FASB Accounting Standards Codification topic 330.b) List three types of goods that are classified as inventory. What characteristic will mechanically exclude an item from being classified as inventory? The three types of goods that are classified as inventory are goods awaiting sale (finished goods), goods in the course of production (work-in-process), and goods to be consumed directly or indirectly in production (raw materials). The definition of inventory does not include any long term assets that are subject to depreciation accounting. Therefore if an asset is depreciable, it is not included as inventory.c) Define market as use d in the phrase lower-of- equal-or-market. The word market in the phrase lower-of-cost-or-market means the replacement cost of your inventory. It is the cost that it would take to buy the same inventory new.4. Asset Impairments FASC 360-10 / 820-10(a) What is the authoritative guidance for asset evils? concisely discuss the scope of the standard (i. e. , beg off the types of transactions to which the standard applies).(b) Give several examples of events that would cause an asset to be tested for impairment.(c) What is the best evidence of fair value?d) Does it appear that ABC should perform an impairment test? Explain.5. Notes Payable FASC 835-30(a) Identify the authoritative literature that provides guidance on the zero-interest-bearing note. Use some of the examples to explain how the standard applies in this setting.(b) How is present value determined when an established exchange price is not definable and a note has no ready market? What is the resulting interest rate often called?(c) Where should a disregard or premium appear in the financial statements? What about issue costs?