requirement should be disclosed on the financial statements as an asset retirement obligation, loss contingency, or an environmental obligation. APPLICABLE AUTHORITATIVE LITERATURE FASB Accounting Standards Codification (ASC) 410 Asset Retirement and Environmental Obligations FASB Accounting Standards Codification (ASC) 450 Contingencies DISCUSSION OF ALTERNATIVES The following section will address the alternative treatments accounting for both the remedial action and smoke filtration system
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authoritative, Category D. The major sources are FASB Standards, Interpretations, and Staff Positions, along with the ABP Opinions, and AICPA Accounting Research Bulletins. The hierarchy is important because there are times when these sources do not provide the guidance needed by companies. When a company is looking for guidance and there is conflicting information, the company should always refer to the pronouncements in the higher category. In May 2008, the FASB issued FAS 162 changing the GAAP hierarchy
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Mountain has violated three rules from the FASB accounting standards codification: inventory measurement, revenue recognition and multi element revenue recognition. Although the SEC had found more problems than just three, the issues at Green Mountain can be classified into these three areas. The SEC did conduct an 18 month inquiry only, into the financial statements of Green Mountain, costing the company about $4 million dollars (10-k form, 2011) . The first FASB code violated is 330-10-35 or Topic-inventory
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WFOEs controlling financial interest. Rationale “A legal entity shall be subject to consolidation under the guidance in the Variable Interest Subsections, if by design any of the following conditions exist” (FASB, ASC 810-15-14). The Enterprise is deemed a VIE as defined in the Codification if at least one of the criteria are met. The first criteria among them are that the total equity investment at risk is insufficient to
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many standards that vary in form, completeness, and structure. Fortunately, the profession has recently developed the Financial Accounting Standards Board Codification (often referred to as the Codification). This Codification provides in one place all the GAAP related to a given topic. This textbook is the first to incorporate this Codification—it will make learning GAAP easier and more interesting! Convergence of U.S. GAAP and International GAAP (iGAAP) As mentioned above, the most important
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The standard setting process The recent, high profile accounting scandals shook the foundations of the capital markets. Financial reporting furnishes investors and other stakeholders with reliable and relevant information. In the short term unethical financial reporting resulted in loss of billion dollars, but in the long term the impact was even more severe: loss of confidence in financial reporting as reliable source of information. The following reforms aimed to restore investor confidence
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Case Study: Pit Stop Closed 1) The Pit Stop Center store closure should not be reported as a discontinued operation in Auto World’s second quarter financial statements. Auto World determined that the Pit Stop Centers meet the definition of a “component of an entity,” which is defined as comprising “operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment
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acquisition of Baked Beans is $135 million. The considerations consisted of cash paid, stock issued, and the fair values of a contingent consideration and precombination services This final calculation was determined by reviewing FASB Accounting Standard Codification 805 “Business Combinations”. Authoritative Literature: The $40 million in cash transferred by Allfoods is included in the overall considerations according to ASC Section 805-20-30-1 “Measurement Principle. The Section states, “The
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each businesses order by $1 million. Medical Devices Inc. needs the customers to sign and return a sales agreement in order to complete the transaction, but only one of the three customers do so by the end of December. According to the FASB Codification section 605- Revenue Recognition, a sale is not recognized until it is recognized. Another way of saying that is that the sale is not recognized until the paper work is received and the company is able to properly file all the paper. In conclusion
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financial reporting more streamlined. This paper is intended to discuss the international financial reporting standards as they relate specifically to the United States convergence of U.S. GAAP to IFRS. The Financial Accounting Standards Board (FASB) is an organization of people who are assigned the task of developing U.S. GAAP (Generally Accepted Accounting Principles). The SEC (Securities Exchange Commission) recognizes U.S. GAAP as the rulebook for public companies in the United States to
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