FAR Study Group – Q1 2018 - Page 2

my question is about loss contingency… heres an example:

TNC Inc. has already accrued for 30,000 case 1, and 20,000 case 2, both due to pending loss contingency… Next year BEFORE F/S are issued, the case was closed for 40,000 for Case 1, and case 2 the lawyers now believe is 50,000

…. For Case 1 do i go back and book and CHANGE the last years liability to 40,000?
…. for Case 2 do i go back and book and CHANGE the last years liability to 50,000?

Tough questions.
I agree with your Case 1. I’d go back to it to reverse the accrual and expense 40,000.
For Case 2, since it’s still an estimate, I’d disclose it as per ASC 450-20-50-3 > UNRECOGNIZED CONTINGENCIES: Disclosure of the contingency shall be made if there is at least a reasonable possibility that a loss or AN ADDITIONAL LOSS may have been incurred and either of the following conditions exists:…

Should I wait for score release next week to pick back up studying or start studying this weekend. Would y’all suggest going over each chapter again or just do comprehensive questions? Thanks

Hi all, I have a question on Capitalizing Interest to the Fixed Asset being constructed.

When an expenditure is made in a year towards the asset being constructed, does that expenditure go into the weighted average expenditure calculation for only the year that it was paid? Or is that expenditure part of the weighted average accumulated expenditures for each year of the capitalization period?

For example: Assume in 2017 that a Company was constructing an asset that qualified for capitalizing interest. Expenditures made in 2017 would obviously be part of the weighted average accumulated expenditures for 2017…But do those expenditures carry over for the weighted average accumulated expenditures in 2018 if the capitalization period extends into 2018?

There's a Becker question that states this but I figured let me ask the question simply before overloading this post with too much. Thanks guys

Oh Far study buddies,
It's Saturday. I am scheduled to study all day. I've had my big breakfast and coffee and my chat with (3) of my home bound college children. I am in for a long day. I feel good about being ready for far. I am finished with Government and am moving on to NFP. Far is a lot of materials to cover but I seem to be moving right along. I hope everyone is geared toward getting good study in before the holidays rush in. My children say they are tired of me and this test and wants me to get it done already. I agree % so no one is expecting any extra special attention while they're home for the holiday and between semesters.

Jeff….. please let us know if FAR is updated. I bought Ninja mcq+flashcards+notes in September (expiring soon), So I am guessing I don't have the updated version of it. Will there be any updates? I just need the extension on Ninja MCQs.

What to do with $1500? Since Valuation Allowance A/c is a Balance sheet account therefore it will have the opening balance in 2002 right? and it will affect the ending balance with calculating $4000 and $26000.

Information regarding Stone Co.'s portfolio of marketable equity securities is as follows:
Aggregate cost as of 12/31/X2 $170,000
Unrealized gains as of 12/31/X2 $4,000
Unrealized losses as of 12/31/X2 $26,000
Net realized gains during 20X2 $30,000

At December 31, 20X1, Stone reported an allowance of $1,500 to reduce investments to market. In its December 31, 20X2, balance sheet, what amount of allowance should Stone report?

$20,500

$22,000 correct.

$26,000

$0