Wiley GAAP: Financial Statement Disclosure Manual
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Joanne M. Flood. Wiley GAAP: Financial Statement Disclosure Manual
Table of Contents
List of Tables
Guide
Pages
WILEY GAAP. Financial Statement Disclosures Manual
PREFACE
ABOUT THE AUTHOR
1 ASC 105 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
AUTHORITATIVE LITERATURE
What Is GAAP?
Accounting Principles and Concepts
The Concept of Materiality
Descriptions of Materiality
DISCLOSURE AND PRESENTATION REQUIREMENTS
2 ASC 205 PRESENTATION OF FINANCIAL STATEMENTS
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
PRACTICE ALERT
DISCLOSURES AND PRESENTATION REQUIREMENTS. ASC 205‐10, Overall
ASC 205‐20, Discontinued Operations
ASC 205‐30, Liquidation Basis of Accounting
ASC 205‐40, Going Concern
PRESENTATION AND DISCLOSURE EXAMPLES. Example 2.1: Reclassification
Example 2.2: Income Statement Presentation for Discontinued Operations—Face of the Income Statement
Example 2.3: Computing the Gain or Loss on Disposal in the Year in Which the Discontinued Operation Is Classified as Held for Sale
Example 2.4: Discontinued Operations—Adjustment of Loss Repeated in a Prior Period as a Discontinued Operation
Example 2.5: Discontinued Operations Reporting—in Periods after the Sale, Including Adjustment for Contingency
Example 2.6: Discontinued Operations—Note Disclosure in Years Subsequent to the Year in Which the Discontinued Operation Was Classified as Held for Sale
Example 2.7: Discontinued Operations—Note Disclosure in Years Subsequent to the Year in Which the Discontinued Operation Was Classified as Held for Sale
Example 2.8: Note—Discontinued Operation—Not a Strategic Shift
Example 2.9: Basis of Presentation—Liquidation Basis of Accounting
Example 2.10: Statement of Net Assets in Liquidation
Example 2.11: Statement of Changes in Net Assets in Liquidation
Example 2.12: Note—Liquidation Is Imminent
Example 2.13: Liquidation Is Not Imminent
Example 2.14: Going Concern—Substantial Doubt Remains—Contingent on Raising Capital
Example 2.15: Going Concern—Substantial Doubt Remains—Contingent on Obtaining Financing
Example 2.16: Going Concern—Substantial Doubt—Management's Plans
3 ASC 210 BALANCE SHEET
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
PRACTICE ALERT
DISCLOSURE AND PRESENTATION REQUIREMENTS. ASC 210‐10, Overall
Form of the Statement of Financial Position
ASC 210‐20, Offsetting
PRESENTATION AND DISCLOSURE EXAMPLES. Example 3.1: Statement of Financial Position—Highly Aggregated
Example 3.2: Statement of Financial Position—Highly Detailed
Example 3.3: Disclosure by Type of Financial Instrument2
Example 3.4: Disclosure by Type of Financial Instrument and Type of Counterparty3
Example 3.5: Sophisticated Entity Disclosure by Type of Financial Instrument and Type of Counterparty4
Example 3.6: Netting of Certain Balance Sheet Accounts
Notes
4 ASC 215 STATEMENT OF SHAREHOLDER EQUITY
AUTHORITATIVE LITERATURE
5 ASC 220 INCOME STATEMENT—REPORTING COMPREHENSIVE INCOME
AUTHORITATIVE LITERATURE
Subtopics
Scope
PRACTICE ALERT
DISCLOSURE AND PRESENTATION REQUIREMENTS. ASC 220‐10, Overall
ASC 220‐20, Unusual Items or Infrequently Occurring Items
ASC 220‐30, Business Interruption Insurance
DISCLOSURE AND PRESENTATION EXAMPLES. Example 5.1: Basic Order of Income Statement and Comprehensive Income Statement
Example 5.2: A Multiple‐Step Format for Income from Continuing Operations
Example 5.3: A Single‐Step Format for Income from Continuing Operations
Example 5.4: Combined Statement of Income and Comprehensive Income with “Net of Tax” Presentation
Example 5.5: Combined Statement of Income and Comprehensive Income with “Gross of Tax” Presentation
Example 5.6: Two Separate but Consecutive Statements of Income and Comprehensive Income—Net of Tax Presentation
Example 5.7: Note X: Income Taxes
Example 5.8: Unusual or Infrequently Occurring Item—Fire at Manufacturing Facility
Example 5.9: Unusual or Infrequently Occurring Items—Legal Settlement
Example 5.10: Business Interruption and Insurance Recovery
Example 5.11: Business Interruption and Insurance Recovery
Notes
6 ASC 230, STATEMENT OF CASH FLOWS
AUTHORITATIVE LITERATURE
Subtopic
Scope and Scope Exceptions
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Objective
Cash and Cash Equivalents
Restrictions on Cash and Cash Equivalents
Gross versus Net Basis
Other Issues Related to Classification of Cash Flows
Format of the Statement of Cash Flows
PRESENTATION AND DISCLOSURE EXAMPLES. Example 6.1: Statement of Cash Flows (without Details of Operating Activities)
Example 6.2: Operating Activities: Formats for Direct and Indirect Methods
Example 6.3: Statement of Cash Consolidated Entities
Example 6.4: Cash and Cash Equivalents—Accounting Policy
Example 6.5: Accounting Policy for Cash and Cash Equivalents, Including Details
Example 6.6: Amount of Interest and Income Taxes Paid and Noncash Investing and Financing Activities
Example 6.7: Amount of Interest and Income Taxes Paid and Noncash Investing and Financing Activities
Example 6.8: Nature of Restrictions on Cash and Cash Equivalents
Example 6.9: Nature of Restrictions on Cash and Cash Equivalents with Internal Reference
Example 6.10: Disclosure in Tabular Format—Restricted Cash Presented in More Than One Line Item on the Balance Sheet
7 ASC 235 NOTES TO FINANCIAL STATEMENTS
AUTHORITATIVE LITERATURE. Subtopic
Scope
Disclosure Techniques
Parenthetical Explanations
Notes to Financial Statements
Cross‐References
Valuation Allowances or Contra Accounts
PRACTICE ALERT
FASB Initiative
SEC Initiative
Suggestions for Improving Disclosure Effectiveness
DISCLOSURE REQUIREMENTS2
DISCLOSURE EXAMPLES. Accounting Period
Accounts Receivable
Advertising
Cash Equivalents
Comprehensive Income
Concentrations of Risk
Consolidation Policy
Contingencies
Derivatives
Earnings Per Share
Use of Estimates
Financial Instruments
Foreign Currency Transactions
Income Taxes
Intangible Assets
Inventories
Property and Equipment and Depreciation Methods
Nature of Operations
Revenue
Recent Accounting Pronouncements
Risks and Uncertainties
Stock‐Based Compensation
Notes
8 ASC 250 ACCOUNTING CHANGES AND ERROR CORRECTIONS
AUTHORITATIVE LITERATURE. Subtopic
Scope
Reasons for Accounting Changes
PRACTICE ALERT
DISCLOSURE AND PRESENTATION REQUIREMENTS. Change in Accounting Principle
Reclassifications
Change in Accounting Estimate
Change in Accounting Estimate Effected by a Change in Accounting Principle
Change in Reporting Entity
Error Corrections
Interim Reporting Considerations
EXAMPLE DISCLOSURES. Example 8.1: Change in Accounting Principle—Note A: Change in Method of Accounting for Inventories
Example 8.2: Change in Accounting Principle—Retrospective Application of a Change in Accounting Principle
Example 8.3: Change in Accounting Principle—Adoption of a New Accounting Principle—Retrospective Application
Example 8.4: Reclassifications—Reclassification of Intellectual Property Income, Gains, and Losses
Example 8.5: Reclassifications—Reclassification of Expenses
Example 8.6: Change in Accounting Estimate Effected by a Change in Accounting Principle—Change in Amortization Method of Fixed Maturity Securities
Example 8.7: Change in Accounting Estimate—Change in Depreciable Life of Equipment
Example 8.8: Correction of Error—Example of a Correction of an Error in Previously Issued Financial Statements
Example 8.9: Correction of Error—Correction of Immaterial Error
Example 8.10: Correction of Error
9 ASC 255 CHANGING PRICES
AUTHORITATIVE LITERATURE. Subtopic
DISCLOSURE AND PRESENTATION REQUIREMENTS. Presentation
Elective Disclosures
EXAMPLE PRESENTATION AND DISCLOSURE. Example 9.1: Statement of Income from Operations in a Statement of Annual Information
10 ASC 260 EARNINGS PER SHARE
AUTHORITATIVE LITERATURE. Subtopic
Scope and Scope Exceptions
Introduction
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS
COMPREHENSIVE EXAMPLE
Diluted EPS (DEPS)
Note X: Earnings Per Share (Illustrative Disclosure Based on Facts from the Example)
Example of the Presentation and Computation of Earnings Per Share
PRESENTATION AND DISCLOSURE EXAMPLES. Example 10.1: Earnings (Loss) Per Share Attributable to Common Stockholders
Example 10.2: Exclusion of Shares with Antidilutive Effects
Example 10.3: Discontinued Operations
Example 10.4: Beneficial Conversion
11 ASC 270 INTERIM REPORTING
AUTHORITATIVE LITERATURE
Subtopic
Scope and Scope Exceptions
Integral Approach
Discrete Approach
PRESENTATION AND DISCLOSURE REQUIREMENTS
REQUIREMENTS APPLICABLE TO ALL REPORTING ENTITIES. Revenues
Product Costs and Direct Costs
Other Costs and Expenses
Seasonality
Fair Value of Financial Instruments
Unusual or Infrequent Items and Disposals of Components
Contingencies
Accounting Changes
REQUIREMENTS APPLICABLE TO PUBLIC REPORTING ENTITIES. Quarterly Reporting to the SEC
PRESENTATION AND DISCLOSURE EXAMPLES. Example 11.1: Consolidated Statement of Income and Comprehensive Income
Example 11.2: Seasonal Nature of Business
Example 11.3: Inventories Measured Using LIFO
Example 11.4: Business Restructuring
Example 11.5: Impairment—Property, Plant, and Equipment
Example 11.6: Recurring Fair Value Measurements
Example 11.7: Income Taxes
12 ASC 272 LIMITED LIABILITY ENTITIES
AUTHORITATIVE LITERATURE. Subtopic
Scope
DISCLOSURE AND PRESENTATION REQUIREMENTS. Presentation
Disclosures
DISCLOSURE EXAMPLES. Example 12.1: Member's Equity
Example 12.2: Income Taxes
13 ASC 274 PERSONAL FINANCIAL STATEMENTS
AUTHORITATIVE LITERATURE. Subtopics
Scope
DISCLOSURE AND PRESENTATION REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLE. Example 13.1: Hypothetical Set of Personal Financial Statements
14 ASC 275 RISKS AND UNCERTAINTIES
AUTHORITATIVE LITERATURE. Subtopic
Scope and Scope Exceptions
Key Terms
PRACTICE ALERT
DISCLOSURE REQUIREMENTS
Nature of Operations
Use of Estimates in the Preparation of Financial Statements
Certain Significant Estimates
DISCLOSURE EXAMPLES. Example 14.1: Nature of Operations—Business Subject to Regulatory Delays
Example 14.2: Nature of Operations—Highly Competitive Business
Example 14.3: Nature of Operations—Raw Materials and Supplies
Example 14.4: Use of Estimates
Example 14.5: Other Significant Estimates—Valuation Allowances for Deferred Income Tax Assets Based on Future Taxable Income
Example 14.6: Concentration of Volume of Business with One Customer
Example 14.7: Customer Concentration
Example 14.8: Product Concentration
Example 14.9: Concentration of Risk—Major Customers
Example 14.10: Concentration of Volume with Suppliers
Example 14.11: Geographic Concentration
Example 14.12: Concentration of Credit Risks
15 ASC 280 SEGMENT REPORTING
AUTHORITATIVE LITERATURE
Subtopic
Scope
Management Approach
Operating Segments
Reportable Segments
Practice Alert
DISCLOSURE AND PRESENTATION REQUIREMENTS. Presentation
Segment Disclosure Requirements
Restatement of Previously Reported Segment Information
Entity‐Wide Disclosure Requirements
EXAMPLE PRESENTATIONS AND DISCLOSURES. Example 15.1: Summary of Significant Accounting Policies—Segments
Example 15.2: Business Segment and Geographic Information
Example 15.3: Segments Based on Services
Example 15.4: Single Business Segment—Prior Years Restated—Sales Disclosed by Marketing Category
Example 15.5: Segment Information—Three Segments Based on Products
16 ASC 310 RECEIVABLES
TECHNICAL ALERTS. ASU 2019‐10
ASU 2016‐13
AUTHORITATIVE LITERATURE. Subtopics
ASC 310‐10, Overall
ASC 310‐20, Nonrefundable Fees and Other Costs
ASC 310‐30, Certain Loans and Debt Securities Acquired with Deteriorated Credit Quality4
ASC 310‐40, Troubled Debt Restructurings by Creditors
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 16.1: Summary of Significant Accounting Policies—Accounts Receivable and Allowance for Doubtful Accounts
Example 16.2: Significant Accounting Policies—Accounts Receivable
Example 16.3: Allowance for Doubtful Accounts—Accounting Policies and Estimates
Example 16.4: Concentrations of Credit Risk and Major Customers
Example 16.5: Sale of Receivables Program
Example 16.6: Accounts Receivable Detail
Example 16.7: Schedule of Trade and Other Accounts Receivables
Example 16.8: Finance and Contract Receivables
Example 16.9: Noncurrent Receivables
Example 16.10: Schedule of Long‐Term Finance and Contract Receivables
Example 16.11: Financing Receivable, Past Due
Example 16.12: Financing Receivable Credit Quality Indicators
Example 16.13: Financing Receivable, Nonaccrual
Example 16.14: Financing Receivable, Allowance for Credit Loss
Example 16.15: Roll‐forward of Combined Allowances for Doubtful Accounts Related to Trade and Other Accounts Receivable
Example 16.16: Accounting Policy—Troubled Debt Restructuring
Example 16.17: Accounting Policy—Troubled Debt Restructuring with Details
Notes
17 ASC 320 INVESTMENTS—DEBT SECURITIES
TECHNICAL ALERTS
ASU 2019‐10
ASU 2016‐13
ASU 2018‐19
ASU 2019‐04
ASU 2019‐05
AUTHORITATIVE LITERATURE
Classification of Debt Securities
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presention Requirements
Disclosure Requirements
PRESENTATION AND DISCLOSURE EXAMPLES. Example 17.1: Recent Accounting Pronouncements
Example 17.2: Accounting Policy—Investment in Debt Securities
Example 17.3: Accounting Policy—Marketable Securities
Example 17.4: Accounting Policy—Other Than Temporary Investment
Example 17.5: Credit Losses
Example 17.6: Maturities of Investment Securities
Notes
18 ASC 321 INVESTMENTS—EQUITY SECURITIES
AUTHORITATIVE LITERATURE
Subtopic
Scope and Scope Exceptions
Initial Measurement—Investments That No Longer Qualify for the Equity Method
Subsequent Measurement
PRESENTATION AND DISCLOSURE REQUIREMENTS
Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 18.1: Accounting Policy—Investments
Example 18.2: Recent Pronouncements
Example 18.3: Gains and Losses Recognized on Equity Securities
Example 18.4: Equity Securities—Upward and Downward Adjustments
19 ASC 323 INVESTMENTS—EQUITY METHOD AND JOINT VENTURES
TECHNICAL ALERT. ASU 2020‐01
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
Practice Alert
PRESENTATION AND DISCLOSURE REQUIREMENTS
Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 19.1: Accounting Policy—Equity Method
Example 19.2: Investment Securities, Including Equity Securities and Unrealized Gains and Losses on Securities
Example 19.3: Amortized Cost and Fair Value of Securities
Example 19.4: Gross Unrealized Losses and Fair Value
Example 19.5: Equity Method Investment—Summarized Financial Information
Example 19.6: Equity Investments in Unconsolidated Joint Ventures
Example 19.7: Summarized Financial Data
Example 19.8: Qualified Affordable Housing Project Investments
20 ASC 325 INVESTMENTS—OTHER
TECHNICAL ALERT
AUTHORITATIVE LITERATURE. Subtopics
Scope
ASC 325‐10, Overall
ASC 325‐30, Investments in Insurance Contracts
ASC 325‐40, Beneficial Interests in Securitized Financial Assets
PRESENTATION AND DISCLOSURE REQUIREMENTS
325‐30, Investments in Insurance Contracts
ASC 325‐40, Beneficial Interests in Securitized Financial Assets
PRESENTATION AND DISCLOSURE EXAMPLES. Example 20.1: Accounting Policy—Insurance Contracts
Example 20.2: Portfolio of Insurance Contracts
Example 20.3: Life Insurance Contracts—Summary of Policies According to Estimated Life Expectancy Data, Grouped by Year
Example 20.4: Life Insurance Contracts—Fair Value Method—Reconciliation of Gain and Loss
Example 20.5: Change in Fair Value of Investment in Life Insurance Policies
Notes
21 ASC 326 FINANCIAL INSTRUMENTS—CREDIT LOSSES
TECHNICAL ALERTS. ASU 2019‐10
ASU 2016‐13
ASU 2018‐19
ASU 2019‐04
ASU 2019‐05
ASU 2019‐11
AUTHORITATIVE LITERATURE
Subtopic
ASC 326‐10, Overall
ASC 326‐20, Measured at Amortized Cost
ASC 326‐30, Available‐for‐Sale Debt Securities
PRESENTATION AND DISCLOSURE REQUIREMENTS
PRESENTATION AND DISCLOSURE EXAMPLES. Example 21.1: Accounting Policy—Adoption of ASU 2016‐13
Example 21.2: Recently Issued Accounting Standards—Not Yet Effective
Example 21.3: Credit Quality Disclosures (Source: ASC 326‐20‐55‐79)
Example 21.4: Schedule of Past Due Loans
22 ASC 330 INVENTORY
TECHNICAL ALERT
AUTHORITATIVE LITERATURE. Subtopic
Accounting for Inventories
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 22.1: Inventory Accounting Policy, Including Basis of Valuations, Method of Determining Cost, Shrinkage, Reserves, and Vendor Payments
Example 22.2: Accounting Policy, Merchandise Inventory, Valued Using the LIFO Retail Inventory Method, Including Major Components of Inventory and Change in Basis
Example 22.3: Inventory Detail Disclosed in the Notes with Change in Basis Note
Example 22.4: Effect of Change in Basis of Stating Inventory
Example 22.5: Manufacturing Inventories Showing Adjustment Due to Change in Cost Basis
Example 22.6: Reserve for Obsolete Inventory
Example 22.7: LIFO Inventory Liquidation
Example 22.8: Purchase Commitment
Example 22.9: Provision for Inventory Losses
Note
23 ASC 340 OTHER ASSETS AND DEFERRED COSTS
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
ASC 340‐10, Overall
ASC 340‐30, Insurance Contracts That Do Not Transfer Insurance Risk
ASC 340‐40, Contracts with Customers
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 23.1: Accounting Policy—Use of Deposit Accounting for Insurance Contracts
Example 23.2: Accounting Policy—Deferred Sales Commissions
Example 23.3: Accounting Policy—Costs Incurred to Obtain a Contract and the Use of the Practical Expedient
24 ASC 350 INTANGIBLES—GOODWILL AND OTHER
TECHNICAL ALERT. ASU 2017‐04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
ASC 2019‐06, Intangibles—Goodwill and Other (Topic 350) and Not‐for‐Profits (Topic 958): Extending the Private Company Accounting Alternatives on Goodwill and Certain Identifiable Assets to Not‐for‐Profit Entities
ASU 2018‐15, Intangibles—Goodwill and Other—Internal‐Use Software (Subtopic 350‐40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract
AUTHORITATIVE LITERATURE
Subtopics
ASC 350‐10, Overall
ASC 350‐20, Goodwill
Authoritative Literature— ASC 350‐30, General Intangibles Other Than Goodwill
Authoritative Literature— ASC 350‐40, Internal‐Use Software
Authoritative Literature—ASC 350‐50, Website Development Costs
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS
Goodwill
Internal Software—Cloud Computing Arrangements
PRESENTATION AND DISCLOSURE EXAMPLES. Example 24.1: Accounting Policy, Goodwill
Example 24.2: Accounting Policy for Timing of Tests of Goodwill Impairment
Example 24.3: Adoption of ASU 2017‐04
Example 24.4: Roll‐forward of Goodwill by Business Segment
Example 24.5: Assessment of Effect of Changes in Segment Reporting on Goodwill
Example 24.6: Accounting Policy, Intangible Assets
Example 24.7: Accounting Policy for Tradenames with Indefinite Lives
Example 24.8: Disclosure of Gross Carrying Amount of Intangible Assets and Accumulated Amortization
Example 24.9: Roll‐forward of Carrying Amount of Identifiable Intangible Assets with Narrative
Example 24.10: Accounting Policy, Internal‐Use Software
Notes
25 ASC 360 PROPERTY, PLANT, AND EQUIPMENT
ACCOUNTING REQUIREMENTS. Subtopics
AUTHORITATIVE LITERATURE. ASC 360‐10, Overall
Authoritative Literature—ASC 360‐20, Real Estate Sales—Sale Leaseback Accounting
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 25.1: Policy for Maintenance and Repairs
Example 25.2: Estimated Service Lives
Example 25.3: Accounting Policy for Disposal of Property and Equipment
Example 25.4: Accounting Policy for Review for Impairment
Example 25.5: Components of Property and Equipment
Example 25.6: Estimated Service Lives and Depreciation Expense
Example 25.7: Cash Flows from Investing Activity, Including Property, Plant, and Equipment
26 ASC 405 LIABILITIES
AUTHORITATIVE LITERATURE. Subtopics
Overview
ASC 405‐10, Overall
ASC 405‐20, Extinguishments of Liabilities
ASC 405‐30, Insurance‐Related Assessments
ASC 405‐40, Obligations Resulting from Joint and Several Liabilities
PRESENTATION AND DISCLOSURE REQUIREMENTS. 405‐20, Extinguishment of Liabilities
405‐30, Insurance‐Related Assessments
405‐40, Obligations Resulting from Joint and Several Liability Arrangements
PRESENTATION AND DISCLOSURE EXAMPLES. Example 26.1: Stored‐Value Cards
Example 26.2: Liability for Insurance‐Related Assessments, Not Discounted
Example 26.3: Joint and Several Liability
27 ASC 410 ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS
AUTHORITATIVE LITERATURE. Overview
Subtopics
ASC 410‐20, Asset Retirement Obligations
ASC 410‐30, Environmental Obligations
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 27.1: Accounting Policy, Asset Retirement Obligation
Example 27.2: Reconciliation of Beginning and Ending Carrying Amounts of Asset Retirement Obligations, Using a Discounted Basis
Example 27.3: Environmental Expense Policy and Liability
Example 27.4: Environmental Obligations, Changes in the Carrying Value of Environmental Remediation Liabilities—Optional Disclosures
Example 27.5: Company Records Liabilities for Environmental Remediation Cost on an Undiscounted Basis
Example 27.6: Company Has Been Designated as a Potentially Responsible Party, But Does Not Expect to Incur Material Costs
28 ASC 420 EXIT OR DISPOSAL COST OBLIGATIONS
AUTHORITATIVE LITERATURE. Subtopic
Scope and Scope Exceptions
Exit or Disposal Costs—General
Exit or Disposal Costs—One‐Time Employee Termination Benefits
Exit or Disposal Costs—Contract Termination Costs
Recognition
Measurement
Other Associated Costs to Exit an Activity
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS
Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 28.1: Accounting Policy—Exit or Disposal Costs
Example 28.2: Accounting Policy—One‐Time Termination Benefits
Example 28.3: Effect of Adopting ASU 2016‐02 on Lease Termination Charges
Example 28.4: Lease Termination Charges after Adoption of ASU 2016‐02
Example 28.5: Workforce Reduction Expenses Determining Accounting Guidance
Example 28.6: Schedule of Restructuring Charges Accounted for under ASC 420
29 ASC 430 DEFERRED REVENUE AND CONTRACT LIABILITIES
30 ASC 440 COMMITMENTS
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
Unconditional Purchase Obligations
PRACTICE ALERT
DISCLOSURE REQUIREMENTS
General Commitments
Unconditional Purchase Obligations
PRESENTATION AND DISCLOSURE EXAMPLES. Example 30.1: Minimum Guaranteed Payments
Example 30.2: Accounting for Minimum Guaranteed Royalty Payments, Accounting Methods
31 ASC 450 CONTINGENCIES
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
ASC 450‐10, Overall
ASC 450‐20, Loss Contingencies
ASC 450‐30, Gain Contingencies
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 31.1: Assessment of Lawsuits and Claims
Example 31.2: Process for Disclosure and Recording of Liabilities Related to Legal Proceedings
Example 31.3: Unconditional Purchase Obligations
Example 31.4: Product Warranties
Example 31.5: Accounting Policy—Contingencies Related to Lawsuits and Claims
Example 31.6: Accounting Policy—Insurance Recoveries
Example 31.7: Intellectual Property Rights Litigation—No Contingency Accrued
Example 31.8: Business Acquisition—Contingent Compensation Recorded as Deferred Compensation
Example 31.9: Accounting Policy—Insurance Recoveries
Example 31.10: Deferred Payment Obligation
Note
32 ASC 460 GUARANTEES
AUTHORITATIVE LITERATURE. Overview
Subtopic
Scope and Scope Exceptions
PRESENTATION AND DISCLOSURE REQUIREMENTS
PRESENTATION AND DISCLOSURE EXAMPLES. Example 32.1: Accounting Policy—Warranties, Claims Are Immaterial
Example 32.2: Product Warranties—No Disclosure because Amounts Are Immaterial
Example 32.3: Guarantees
Example 32.4: Product Warranty Costs, Accrual Policy, and Schedule with Changes
Example 32.5: Guarantees and Indemnifications
Example 32.6: Schedule of Maximum Potential Amount of Future Payments for Guarantees
Example 32.7: Letters of Credit
Notes
33 ASC 470 DEBT
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
ASC 470‐20, Debt with Conversion and Other Options
ASC 470‐30, Participating Mortgage Loans
ASC 470‐40, Product Financing Arrangements
ASC 470‐60, Troubled Debt Restructurings by Debtors
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 33.1: Debt Modification
Example 33.2: Troubled Debt Restructuring
Example 33.3: Troubled Debt Schedule and Policy
Example 33.4: Revolving Credit Agreement
Example 33.5: Debt Covenant Violation Penalty
34 ASC 480 DISTINGUISHING LIABILITIES FROM EQUITY
AUTHORITATIVE LITERATURE. Subtopic
Scope and Scope Exceptions
Overview
Initial Recognition and Measurement
Subsequent Measurement
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 34.1: Presentation of Mandatorily Redeemable Shares in the Statement of Financial Position with Related Note
Example 34.2: Accounting Policy—Shares Subject to Redemption
Example 34.3: Accounting for Warrants at Fair Value
Example 34.4: Derivative Liabilities—Change in Fair Value
Example 34.5: Down‐Round Features
Example 34.6: Redeemable Preferred Stock
35 ASC 505 EQUITY
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
Overview
Legal Capital and Capital Stock
Preferred Stock
Convertible Preferred Stock
Stock Subscriptions
Additional Paid‐in Capital
Donated Capital
Retained Earnings
ASC 505‐20, Stock Dividends and Stock Splits
ASC 505‐30, Treasury Stock
Other Treasury Stock Issues
Other Equity Accounts
ASC 505‐60, Spin‐offs and Reverse Spin‐offs
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 35.1: Stockholders’ Deficit
Example 35.2: Stockholders’ Equity Deficit Results in Substantial Doubts about Going Concern
Example 34.3: Preferred Stock—Rights and Privileges
Example 34.4: Preferred Stock May Require Redemption
Example 34.5: Preferred Stock—Rights and Privileges—Large Shareholders
Example 34.6: Common Stock Dividends
Example 34.7: Schedule of Warrants to Acquire Outstanding Common Stock
Example 34.8: Warrant Activity for the Reporting Year
Example 34.9: Modification of Exercise Price of Warrants to Acquire Stock Resulting in an Increase in Value
Example 34.10: Statement of Stockholders’ Equity
Example 34.11: Stockholders’ Equity Deficit—Detailed Schedule
Example 34.12: Stockholders’ Equity Attributable to Noncontrolling Interests
Example 34.13: Spin‐off of Subsidiary
Note
36 ASC 605 REVENUE RECOGNITION
AUTHORITATIVE LITERATURE. Subtopics
37 ASC 606 REVENUE FROM CONTRACTS WITH CUSTOMERS
AUTHORITATIVE LITERATURE. Technical Alerts
Scope
Five Steps in the ASC 606 Revenue Model
STEP 1: IDENTIFY THE CONTRACT WITH THE CUSTOMER. The Contract
Enforceable Rights and Obligations
The Five Contract Criteria
Collectibility Threshold
Arrangements Where Contract Criteria Are Not Met
The Portfolio Approach and Combining Contracts
Identifying the Customer
STEP 2: IDENTIFY THE PERFORMANCE OBLIGATIONS
Determining Whether a Good or Service Is Distinct
Series of Distinct Goods or Services That Are Substantially the Same and Have the Same Pattern of Transfer
STEP 3: DETERMINE THE TRANSACTION PRICE
Significant Financing Component
Noncash Consideration
Consideration Payable to the Customer
STEP 4: ALLOCATE THE TRANSACTION PRICE
Determining the Stand‐alone Selling Price
Allocating the Transaction Price
Changes in the Transaction Price
STEP 5: RECOGNIZE REVENUE WHEN (OR AS) THE ENTITY SATISFIES A PERFORMANCE OBLIGATION
Control of an Asset
Performance Obligations Satisfied Over Time
Performance Obligations Satisfied at a Point in Time
Measuring Progress Toward Complete Satisfaction of a Performance Obligation
OTHER ISSUES. Right of Return
Warranties
Principal versus Agent
Customer Options to Purchase Additional Goods or Services
Customer's Unexercised Rights (Breakage)
Nonrefundable Up‐front Fees
Licenses
Repurchase Agreements
Consignment Arrangements
Bill‐and‐Hold Arrangements
Contract Modifications
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 37.1: Adoption and Effect of ASU 2014‐09
Example 37.2: Description of Revenue Sources
Example 37.3: Sources of Revenue—Retail Product Sales and Rentals
Example 37.4: Revenue Recognition Policy
Example 37.5: Revenue Recognition Policy—Transfer of Control
Example 37.6: Revenue Recognition Policy—Transaction Price, Including Sales Incentives
Example 37.7: Product Returns
Example 37.8: Warranties
Example 37.9: Taxes
Example 37.10: Sales Taxes
Example 37.11: Revenue Recognized Over Time
Example 37.12: Contracts with Multiple Performance Obligations
Example 37.13: Performance Obligations
Example 37.14: Practical Expedients Used
Example 37.15: Revenue Recognition for Rentals Recognized as Leases
Example 37.16: Contract Balances Recognized
Example 37.17: Schedule of Disaggregated Revenue Information by Product Type
Example 37.18: Disaggregation of Revenue by Year and Product Type
Example 37.19: Disaggregation of Revenue by Geographic Location
Example 37.20: Determining Whether the Company Is Acting as Principal or Agent
Example 37.21: Revenue from Shipping Charges
Example 37.22: Rental Revenue, Including Buyout Option
Example 37.23: Returns Estimate
Example 37.24: Gift Cards, Customer Loyalty Programs, Promotional Offers
Example 37.25: Payment Terms
Example 37.26: Service Revenue
Example 37.27: Subscription‐Based Revenue
Example 37.28: Partnership Marketing Agreements
Example 37.29: Contract Assets and Contract Liabilities, Including Schedule of Changes
38 ASC 610 OTHER INCOME
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
ASC 610‐10, Overall
ASC 610‐20, Gains and Losses from the Derecognition of Financial Assets
ASC 610‐30, Gains and Losses on Involuntary Conversions
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 38.1: Effect of Adoption of ASC 610 on Real Estate Transactions
Example 38.2: Effect of Adoption of ASC 610 on Royalties
39 ASC 705 COST OF SALES AND SERVICES
AUTHORITATIVE LITERATURE
40 ASC 710 COMPENSATION— GENERAL
AUTHORITATIVE LITERATURE. Subtopics
Scope and Scope Exceptions
Compensated Absences
Bonus Payments
Deferred Compensation Contracts
Lump‐Sum Payments Under Union Contracts
Deferred Compensation—Rabbi Trusts
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 40.1: Nonqualified Deferred Compensation Plans
Example 40.2: Deferred Compensation—Rabbi Trust—Plan A
Example 40.3: Deferred Compensation—Rabbi Trust—Plan B
Example 40.4: Nonqualified Deferred Compensation—Accounting and Schedule
Example 40.5: Rabbi Trust Asset
Example 40.6: Compensated Absences—Inability to Estimate
41 ASC 712 COMPENSATION—NONRETIREMENT POSTEMPLOYMENT BENEFITS
AUTHORITATIVE LITERATURE
Subtopic
Initial Measurement and Recognition
Subsequent Measurement
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 41.1: Severance and Termination Benefits Resulting from Restructuring
Example 41.2: Restructuring Charges
42 ASC 715 COMPENSATION—RETIREMENT BENEFITS
AUTHORITATIVE LITERATURE. Subtopics
Overview
Scope and Scope Exceptions
ASC 715‐10, Overall
ASC 715‐20, Defined Benefit Plans—General
ASC 715‐30, Defined Benefit Plans—Pension
ASC 715‐60, Defined Benefit Plans—Other Postretirement
ASC 715‐70, Defined Contribution Plans
ASC 715‐80, Multiemployer Pension Plans
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Defined Benefit Plan
PRESENTATION AND DISCLOSURE EXAMPLES. Example 42.1: Description of Pension and Postretirement Benefit Plans
Example 42.2: Description of Pension and Postretirement Benefit Plans
Example 42.3: Pension and Other Postretirement Benefit Liabilities Presented in Accumulated Other Comprehensive Income
Example 42.4: Schedule of Changes to Pension and Other Postretirement Benefits in Accumulated Other Comprehensive Income
Example 42.5: Curtailment Gain
Example 42.6: Investment Strategy
Example 42.7: Valuation of Funds
Example 42.8: Employer Contributions and Distributions
Example 42.9: 401(k) Plan
Example 42.10: 401(k) Plan with Benefit and Contribution Details
Example 42.11: Special Termination Benefits
Example 42.12: Settlement Expense
Example 42.13: Curtailment of Annuity Contract
Example 42.14: Reconciliation of Beginning and Ending Balances of the Benefit Obligation and the Fair Value of Plan Assets
Example 42.15: Schedule of Amounts Recognized in the Statement of Financial Position
Example 42.16: Components of Net Periodic Cost and Other Amounts Recognized in Other Comprehensive Income
Example 42.17: Weighted‐Average Assumptions Used to Determine Benefit Obligations
Example 42.18: Description of Health Care Savings Plan
Example 42.19: Discount Rate Used to Measure Plan Liabilities
Example 42.20: Measurement of Service Cost and Interest Cost
Example 42.21: Assumption for the Expected Return on Plan Assets
Example 42.22: Contributions to Pension and Other Postretirement Plans
Example 42.23: Future Pension and Postretirement Benefit Payments
Example 42.24: Plan Asset Management
Example 42.25: U.S. Pension Plans and Postretirement Benefit Plan Assets
43 ASC 718 COMPENSATION—STOCK COMPENSATION
AUTHORITATIVE LITERATURE
Technical Alert
Subtopics
Scope and Scope Exceptions
ASC 718‐10, Overall
ASC 718‐40, Employee Stock Ownership Plans
ASC 718‐50, Employee Share Purchase Plans
ASC 718‐740, Income Taxes
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 43.1: Share‐Based Compensation Accounting Policy, Including Performance‐Based and Time‐Based Options
Example 43.2: Share‐Based Compensation Accounting Policy
Example 43.3: Fair Value Estimation of Stock Options Using the Black‐Scholes Model
Example 43.4: Share‐Based Compensation—Accounting Policy and Assumptions
Example 43.5: Schedule of Estimate of Fair Value of Stock Option Grants
44 ASC 720 OTHER EXPENSES
AUTHORITATIVE LITERATURE. Subtopics
ASC 720‐10, Overall
ASC 720‐15, Start‐Up Costs
ASC 720‐20, Insurance Costs
ASC 720‐25, Contributions Made
ASC 720‐30, Real and Personal Property Taxes
ASC 720‐35, Advertising Costs
ASC 720‐40, Electronic Equipment Waste Obligations
ASC 720‐45, Business and Technology Reengineering
ASC 720‐50, Fees Paid to the Federal Government by Pharmaceutical Manufacturers and Health Insurers
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 44.1: Accounting Policy for Advertising Costs
Example 44.2: Accounting Policy for Start‐Up Costs
Example 44.3: Organizational Costs Accounting Policy
45 ASC 730 RESEARCH AND DEVELOPMENT
AUTHORITATIVE LITERATURE. Overview
Subtopics
Scope and Scope Exceptions
ASC 730‐10, Research and Development—Overall
ASC 730‐20, Research and Development Arrangements
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 45.1: Accounting Policy for Research and Development Costs
Example 45.2: Research and Development Costs Accounting Policy and Costs
Example 45.3: Research and Development Incentive Income and Receivable
Example 45.4: Research and Development Costs Increase Due to Acquisition
46 ASC 740 INCOME TAXES
AUTHORITATIVE LITERATURE. Accounting Theory—A Balance Sheet Approach
Technical Alert
Subtopics
Scope and Scope Exceptions
Recognition
Tax Law Changes
ASC 740‐20, Intraperiod Income Tax Allocation
ASC 730, Other Consideration or Special Areas
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 46.1: Accounting Policy for Income Taxes
Example 46.2: Accounting Policy for Income Taxes, Including Policy on Deferred Tax Assets
Example 46.3: Provision for Income Taxes
Example 46.4: Reconciliation of Federal Income Tax Rate to Effective Tax Rate
Example 46.5: Tax Legislation
Example 46.6: Schedule of Temporary Differences
Example 46.7: Schedule of Net Operating Loss Carryforwards
Example 46.8: Deferred Income Tax Assets Valuation Allowance
Example 46.9: Reconciliations of Beginning and Ending Balances of Unrecognized Tax Benefits
Example 46.10: Statute of Limitations and Its Effect on Tax Benefits
Example 46.11: Tax Examinations
Example 46.12: Effective Tax Rate
Example 46.13: Financial Statement Presentation of Discontinued Operations with Provision for Income Taxes
47 ASC 805 BUSINESS COMBINATIONS
AUTHORITATIVE LITERATURE
Techniques for Structuring Business Combinations
Subtopics
Scope and Scope Exceptions
Transactions and Events Accounted for as Business Combinations
Qualifying as a Business
Accounting for Business Combinations Under the Acquisition Method
Private Company Alternative for Accounting for Identifiable Intangible Assets in a Business Combination
ASC 805‐40, Reverse Acquisitions
ASC 805‐50, Related Issues—Pushdown Accounting
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 47.1: Accounting Policy for Business Acquisitions
Example 47.2: Accounting Policy for Business Acquisitions, Including Research and Development, Acquisition, and Restructuring Costs, and Income Tax Changes
Example 47.3: Business Combination
Example 47.4: Table Summarizing the Fair Value of Consideration for the Acquired Business
Example 47.5: Details of Cash Paid at Closing
Example 47.6: Allocation of the Purchase Price
Example 47.7: Transaction Expenses
Example 47.8: Pro Forma Results
Example 47.9: Business Acquisition Accounted for as a Purchase
Example 47.10: Acquisition, Including Goodwill
Example 47.11: Acquisitions Description for Three Recent Years
Example 47.12: Impact on the Consolidated Balance Sheet of Purchase Price Allocations
Example 47.13: Purchased Identifiable Finite‐Lived Intangible Assets
Example 47.14: Goodwill and Other Intangible Assets from Acquisition
48 ASC 808 COLLABORATIVE ARRANGEMENTS
AUTHORITATIVE LITERATURE
Technical Alert
Subtopic
Scope
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 48.1: Detailed Analysis of Whether Arrangement Is within the Scope of ASC 808, Where Some Revenue Is within the Scope of ASC 606 and Some Is within the Scope of ASC 808
Example 48.2: Collaboration Agreement
Example 48.3: Collaborative Agreement, Contract Counterparty Not a Customer
Example 48.4: Joint Venture, Considered Collaborative Agreement
Example 48.5: Analysis of Collaboration Agreements, Conclusion within Scope of ASC 606
Example 48.6: Guaranty
49 ASC 810 CONSOLIDATIONS
AUTHORITATIVE LITERATURE
Technical Alert
Subtopics
Scope and Scope Exceptions
Consolidation Models—Introduction and Background
The VIE Model
The Voting Interest Model
ASC 810‐30, Research and Development Arrangements
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 49.1: Accounting Policy for VIEs
Example 49.2: Description of VIE and Determination of VIE Status and Primary Beneficiary
Example 49.3: Schedule of Assets and Liabilities of a VIE
Example 49.4: Schedule of Revenue and Expenses of a VIE
Example 49.5: Variable Interest Entity and Guarantee
Notes
50 ASC 815 DERIVATIVES AND HEDGING
AUTHORITATIVE LITERATURE
Basic Principles of ASC 815
Technical Alerts
Subtopics
Scope—ASC 815‐10
Scope—ASC 815‐15
Scope—ASC 815‐20
Scope—ASC 815‐25
Scope—ASC 815‐30
Scope—ASC 815‐35
Scope—ASC 815‐40
ASC 815‐10, Overall2
ASC 815‐15, Embedded Derivatives
ASC 815‐20, Hedging—General
ASC 815‐40, Contracts in Entity's Own Equity
ASC 815‐45, Weather Derivatives
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
PRESENTATION AND DISCLOSURE EXAMPLES. Example 50.1: Accounting Policy for Derivatives
Example 50.2: Using Derivatives to Manage Foreign Currency and Interest Rate Risks
Example 50.3: Accounting for Changes in the Fair Value and Cash Flow Hedges
Example 50.4: Description of Interest Rate Swap Agreements and Cross‐Currency Interest Rate Swap Agreements
Example 50.5: Description of Foreign Currency Transaction Risk—Foreign Currency Forward Contracts
Example 50.6: Description of Foreign Currency Translation Risk—Impact on Cash, Cash Equivalents and Marketable Securities
Example 50.7: Description of Fair Value Hedges—Interest Rate Swap Agreements and Cross‐Currency Interest Rate Swap Agreements
Example 50.8: Description of Cash Flow Hedges—Cross‐Currency Swap Agreements
Example 50.9: Description of Foreign Currency Forward Contracts Not Designated as Hedges
Example 50.10: Schedule of Fair Values of Derivative Instruments Designated as Hedges in Consolidated Balance Sheets
Example 50.11: Schedule of Effects of Fair Value Hedging Relationships on Hedged Items in Consolidated Balance Sheets
Example 50.12: Schedule of Effects of Derivative Instruments Designated as Hedges on Income
Example 50.13: Accounting Policy for Convertible Debt and Equity Securities
Notes
51 ASC 820 FAIR VALUE MEASUREMENT
AUTHORITATIVE LITERATURE
Subtopic
Scope and Scope Exceptions
Definition of Fair Value
Measurement Principles and Methodologies
Level 1 inputs
Level 2 inputs
Level 3 inputs
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 51.1: Accounting Policy—Fair Value of Financial Instruments
Example 51.2: Accounting Policy—Fair Value Hierarchy
Example 51.3: Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis
52 ASC 825 FINANCIAL INSTRUMENTS
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
ASC 825‐10, Overall
ASC 825‐20, Registration Payment Arrangements
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 52.1: Fair Value of Financial Instruments
Example 52.2: Description and Fair Value of Financial Instruments
Example 52.3: Determination of Fair Value
Example 52.4: Fair Value Measurement of Acquisitions
Example 52.5: Estimate of Fair Value of Contingent Liability Updated
Example 52.6: Write Down to Fair Value of Long‐Lived Assets
Notes
53 ASC 830 FOREIGN CURRENCY MATTERS
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
Determining the Functional Currency
Translation When a Foreign Entity Maintains Financial Records in Its Functional Currency
Translation When a Foreign Entity Maintains Financial Records in a Currency Other Than Its Functional Currency
Cessation of Highly Inflationary Condition
Applying ASC 740 to Foreign Entity Financials Restated for General Price Levels
Application of ASC 830 to an Investment to Be Disposed of That Is Evaluated for Impairment
Foreign Operations in the United States
Translation of Foreign Currency Transactions
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 53.1: Foreign Currency
Example 53.2: Foreign Currency Translation
51 ASC 835 INTEREST
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
ASC 835‐20, Capitalization of Interest
ASC 835‐30, Imputation of Interest
Debt Issuance Costs
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 54.1: Accounting Policy for Capitalization of Interest
Example 54.2: Amounts Outstanding Presented Net of Debt Issuance Costs
Example 54.3: Debt Discount Amortized to Interest Expense Using Effective Interest Method
Example 54.4: Amortization of Debt Issuance Costs and Debt Discounts
55 ASC 840 LEASES1
AUTHORITATIVE LITERATURE. Technical Alert
Subtopics
Scope and Scope Exceptions
Variable Interest Entities
Lease or Sale—The Interplay of Lease and Revenue Recognition Accounting
Lessee Classification
Lessor Classification
PRESENTATION AND DISCLOSURE REQUIREMENTS
PRESENTATION AND DISCLOSURE EXAMPLES. Example 55.1: Accounting Policy—Depreciation of Leased Property Under Capital Leases
Example 55.2: Accounting Policy for Leases
Example 55.3: Leases—Accounting Policy and Description of Leases
Example 55.4: Operating Lease Expense
Example 55.5: Capitalized Lease Obligations
Note
56 ASC 842 LEASES
AUTHORITATIVE LITERATURE
Technical Alerts
ASU 2016‐02—Putting It on the Balance Sheet
Subtopics—ASU 842
Scope—ASU 842
Lease Classification
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation—Using the Display Approach
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 56.1: Adoption of New Accounting Standard ASU 2016‐02
Example 56.2: Adoption of New Accounting Standard ASU 2016‐02, Including Effect
Example 56.3: Adoption of New Accounting Standards ASU 2016‐02 and 2018‐11
Example 56.4: Accounting for a Finance Lease
Example 56.5: Accounting Policy—Leases, Including Practical Expedients
Example 56.6: Schedule of Lease Right‐of‐Use Assets
Example 56.7: Weighted‐Average Remaining Lease Terms and Discount Rated and Supplementary Cash Flow Information
Example 56.8: Schedule of Future Minimum Lease Payments
Example 56.9: Sale and Leaseback Transaction
Example 56.10: Accounting Policy—Leases
Example 56.11: Sale and Leaseback Transaction
Example 56.12: Components of Lease Costs
Example 56.13: Supplemental Cash Flow Information
Example 56.14: Supplemental Balance Sheet Information Related to Leases
Example 56.15: Maturities of Long‐Term Debt, Including Finance Leases
57 ASC 845 NONMONETARY TRANSACTIONS
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
Types of Nonmonetary Transactions
General Rule
Modification of the General Rule
Commercial Substance
Nonreciprocal Transfers
Nonmonetary Exchanges That Include Monetary Consideration (Boot)
Inventory Purchases and Sales with the Same Counterparty
Exchange of Product or Property Held for Sale for Productive Assets
Barter Transactions
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 57.1: Accounting Policy for Noncash Exchanges
Example 57.2: Accounting Policy for Barter Transactions Related to Advertising
Note
58 ASC 848 REFERENCE RATE REFORM
AUTHORITATIVE LITERATURE. Technical Alert
Subtopics
ASC 848‐10, Overall
ASC 848‐20, Contract Modifications
ASC 848‐30, Hedging—General
ASC 848‐40, Fair Value Hedges
ASC 848‐50, Cash Flow Hedges
PRESENTATION AND DISCLOSURE EXAMPLES. Example 58.1: Reference Rate Reform—Recent Accounting Pronouncement
Example 58.2: Reference Rate Reform—New Accounting Pronouncement—Affected Loans Identified
59 ASC 850 RELATED-PARTY DISCLOSURES
AUTHORITATIVE LITERATURE. Subtopic
Scope
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS
PRESENTATION AND DISCLOSURE EXAMPLES. Example 59.1: Accounting Policy for Related‐Party Transactions
Example 59.2: Related‐Party Transaction
Example 59.3: Accounting Policy for Related‐Party Transactions
Example 59.4: No Material Related‐Party Transactions
Example 59.5: References to Other Notes. Related‐Party Transactions
Example 59.6: Related‐Party Debt Schedule
Example 59.7: Related‐Party Revenue
Example 59.8: Related‐Party Accounts Receivable
Example 59.9: Related‐Party Accounts Payable
Example 59.10: Schedule of Related‐Party XYZ Agreements with Note References
Example 59.11: Related‐Party Joint Venture
60 ASC 852 REORGANIZATIONS
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
Corporate Bankruptcy and Reorganizations
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosure
PRESENTATION AND DISCLOSURE EXAMPLES. Example 60.1: Voluntary Filing Under Chapter 11
Example 60.2: Note 1—Application of Fresh‐Start Accounting
Example 60.3: Note 2—Emergence from Voluntary Reorganization Under Chapter 11 Proceedings
Example 60.4: Note 3—Fresh‐Start Accounting
Example 60.5: Reorganization Value
Example 60.6: Consolidated Balance Sheet—Effect of Applying Fresh‐Start Accounting
Example 60.7: Separation Adjustments
Example 60.8: Reorganization Adjustments
Example 60.9: Fresh‐Start Adjustments
Example 60.10: Reorganization Items, Net
Example 60.11: Accounting Policy—Quasi Reorganization
Example 60.12: Quasi Reorganization Not Completed, Correction of Error
Example 60.13: Presentation of Stockholders’ Equity in Quasi Reorganization
61 ASC 853 SERVICE CONCESSION ARRANGEMENTS
AUTHORITATIVE LITERATURE
Subtopic
Scope
Scope Exception
Accounting for Service Concession Arrangements
PRESENTATION AND DISCLOSURE REQUIREMENTS
PRESENTATION AND DISCLOSURE EXAMPLES. Example 61.1: Contracts Considered Service Concession Arrangements—Accounting Policy
Example 61.2: Contracts Considered Service Arrangements—Accounting Before and After Adoption of ASC 606
62 ASC 855 SUBSEQUENT EVENTS
AUTHORITATIVE LITERATURE
Subtopic
Scope and Scope Exceptions
Types of Subsequent Events
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. Presentation
Disclosures
PRESENTATION AND DISCLOSURE EXAMPLES. Example 62.1: Subsequent Events, Including Events Related to COVID‐19
Example 62.2: Subsequent Events—Sale of OEM Business
Example 62.3: Subsequent Event—Effect of COVID‐19
Example 62.4: Subsequent Event—Stockholder Litigation
63 ASC 860 TRANSFERS AND SERVICING
AUTHORITATIVE LITERATURE
Subtopics
Scope and Scope Exceptions
ASC 860‐10, Overall
ASC 860‐20, Sales of Financial Assets
ASC 860‐30, Secured Borrowing and Collateral
ASC 860‐50, Servicing Assets and Liabilities
Securitizations
PRACTICE ALERT
PRESENTATION AND DISCLOSURE REQUIREMENTS. ASC 860‐10, Overall
ASC 860‐20, Sales of Financial Assets
ASC 860‐30, Secured Borrowing and Collateral
ASC 860‐50, Servicing Assets and Liabilities
PRESENTATION AND DISCLOSURE EXAMPLES. Example 63.1: Receivables Securitization Program
Example 63.2: Accounting Policy for Receivables Sold Under Receivable Securitization Facilities and Receivables Sales Facilities
Example 63.3: Accounting Policy for Cash Flows
Example 63.4: Accounting Policy for Factoring Arrangements
Example 63.5: Lines of Credit
Example 63.6: Mortgage Servicing Rights
Note
Index
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In addition to approving the sale of the Home Décor Business in the third quarter of 20X2, the Company's Board of Directors approved a plan to sell substantially all of the remaining operations of the International Division. On December 31, 20X2, the Company closed the sale of the Home Décor Business contemplated by the Sale and Purchase Agreement (the SPA) dated November 22, 20X2 as amended to complete the sale). Approximately $70 million has been accrued at December 31, 20X2 under a working capital adjustment provision. The draft working capital adjustment submitted by the Company to the Purchaser is subject to a dispute resolution provision as provided for in the SPA. The Company is actively marketing for sale the businesses in South Korea, mainland China, Australia, and New Zealand and expects to complete the dispositions within the one year period associated with held for sale assets. Collectively, the European Home Décor Business sale and other planned dispositions represent a strategic shift that has a major impact on the Company's operations and financial results and has been accounted for as discontinued operations. The retained sourcing and trading operations of the former International Division are presented as Other in Note X, Segment Information.
The Company has presented the operating results of the European Home Décor Business as well as the entities to be sold within discontinued operations, net of tax in the consolidated statements of operations for all periods presented. The related assets and liabilities of the disposal groups are presented as current and non‐current assets and liabilities of discontinued operations in the consolidated balance sheets as of December 31, 20X1 and December 26, 20X2. Cash flows from the Company's discontinued operations are presented in the consolidated statements of cash flows for all periods. Certain portions of the former International Division assets and operations are being retained or did not meet the held for sale criteria at December 31, 20X2 and, therefore, remain in continuing operations.
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