- This topic has 1,629 replies, 157 voices, and was last updated 10 years, 8 months ago by
OnMyWay732.
-
CreatorTopic
-
August 30, 2014 at 3:33 pm #188294
-
AuthorReplies
-
October 12, 2014 at 7:15 am #627916
Anonymous
Inactive@cpaherewego, I have the same issue with governmental accounting!
October 12, 2014 at 2:04 pm #627917Anonymous
InactiveTwo days until the beast! Here we go 🙁
October 12, 2014 at 5:23 pm #627918Juliemiddle
MemberWhat's the difference between: Stock Rights vs. Stock Awards vs. Stock Options vs. Stock Warrants?
I've got the accounting recognition rules memorized for all these, but I've confused myself on what is what. I think the only one I know is that Stock Awards are given to employees (as in, they don't have to pay anything for it, and they typically vest over time.)
Good luck, @CPAHopeful! Just keep looking at as many topics as you can each day…and when in doubt, make Journal Entries to help figure something out!
AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONECPAExcel, Ninja Audio (all sections)
October 12, 2014 at 6:27 pm #627919CPA50
Participant2014Hopeful…
Here we go! Sending good thoughts your way Tuesday!!
AUD 88 (expired), 80 retake
FAR 64,69,67,73,67,73,73,73, August 3
REG 75 (expired) September 7
BEC 72, 77The adventure continues...
October 12, 2014 at 6:36 pm #627920Anonymous
InactiveYou too CPA50! Let's rock this and then kick the crap out of REG!
October 12, 2014 at 6:38 pm #627921Anonymous
Inactive@Juliemiddle — I have actually resorted to using T accounts to figure stuff out — whatever works for a 75!
October 12, 2014 at 7:41 pm #627922cpaherewego
MemberWow! I am worried about tomorrow test. I just took a practice exam and got a 63% – Freaking out a little.
FAR - 10/13(retake)
AUD - TBD
BEC - TBD
REG - TBDYou can do anything you put your mind too!!!
October 12, 2014 at 7:49 pm #627923CPAfit
Participantcan anybody plz explain the difference between foreign currency translation/transaction and remeasurement?
October 12, 2014 at 7:50 pm #627924Lidis
ParticipantStock Appreciation Rights (SAR) is a compensations method that companies give to management or employees as a bonus
Stock award is the issuance of an award such as a stock option to key employees under stock option plan. The stock option grants the employee the right to purchase certain numbers of shares of the company stock a pre-determined price.
The SAR and the stock award are compensatory plans. They are recoded as a compensation expense.
Stock warrants are not compensatory items. They are issued to raise capital and can be issued with another securities like bonds or preferred stock. The stock warrants can be detachable and non-detachable.
October 12, 2014 at 8:14 pm #627925CPAfit
ParticipantOctober 12, 2014 at 11:54 pm #627926go2134
MemberForeign Currency Transactions, Translations, and Remeasurements:
Foreign Currency TransACTions: Act NOW, on the SPOT. Report G/L on the Income Statement.
Note that this is only after the title passes for any Open transaction (i.e., on a Receivable or Payable for Shipped goods).
On the other hand, if it's a FORWARD Contract, always use the FORWARD rate to make your adjusting entries.
.
1) Before I get into Foreign Currency Translations/Remeasurements, pardon my French, but you're REtarded if you apply an exchange rate to R.E. (you'll see this in a minute, but Retained Earnings is ALWAYS Calculated; ignore the foreign companies listed “Retained Earnings”)
2) With the Exception of “RELEVANT” Remeasured BS items, Income Statement items are converted using the Weighted Average. (Remeasured BS items use the Historic Rate: Depreciation & PP&E, CGS & Inventory, Amortization of Assets)
3) Common Stock & APIC will ALWAYS use the Historic Rate.
Foreign Currency TransLATE-tions: Recognize G/L LATER. Put it in OCI for now.
1) Translate the entire Income statement using the Weighted Average rate.
Translated Net Income goes directly into the Retained Earnings Statement. (The test will likely not have a Beginning Balance in the RE Statement, so that same amount will go the the Balance Sheet too.)
2) Translate the Balance Sheet: (CS & APIC: Historic, Assets & Liabilities: Current, RE: Don't be REtarded)
– ONLY Common Stock & APIC use the Historic Rate. (CS & APIC are ALWAYS Historic, regardless of the Method. They're history; keep it that way.)
– Assets & Liabilities use the Current Rate.
– RETAINED EARNINGS IS ALWAYS CALCULATED, DON'T TOUCH IT! (You Rolled it over when you calculated Net Income, remember?)
-PLUG AOCI: Assets = Liabilities + Equity. Plug AOCI (Equity) to make it work.
.
RE-M-easurement: “M-C Hammer” is trying to stay Relevant internationally.
1) Start with the Balance Sheet:
– “M-C”: ‘M'onetary Assets = ‘C'urrent Rate
– “H”: Non-Monetary Assets = ‘H'istoric Rate
– PLUG #1) Retained Earnings: Assets = Liabilities + Equity. Make it work. (DON'T be REtarded! RE is ALWAYS Calculated)
Transfer your CALCULATED Retained Earnings to the Income Statement. That will be your “Net Income” on the Income Statement. This will be VERY important later, because it will determine your Gain on Remeasurement (i.e., PLUG #2)
2) Go to the Income Statement. (Now remember ‘MC Hammer' is really trying to stay ‘Relevant'.)
– If an Income Statement item is ‘Relevant' to a Balance Sheet Item, it uses the ‘H'istoric Rate.
– Non-BS items use the Weighted Average Rate.
-PLUG #2) REMEASUREMENT GAIN: ‘Net Income' – (Revenues – Expenses) = GAIN on the Income Statement (duh).
October 13, 2014 at 12:53 am #627927go2134
MemberNon-Monetary Exchages WITH Commercial Substance:
Say you bought a deck of Pokemon cards for $10 (BV), and you got a Charizard, which is worth $100 (FV) if you sell it on Jeffslist (c). I'm ridiculously jealous so I want to trade you for it.
At first, I offer you some Dunkaroo's. Like a pallets worth from Jeff's Club (c) worth $120 (FV). I tell you I'll trade you my delicious snacks for your Charizard, but you'll have to thrown in an extra $20 so that it's a FAIR trade.
If you agree, I don't care how much you Gained, keep it to yourself.
Gain = FV – BV of Charizard: $100 – $10 = $90 Gain. (Note that this has nothing to do with the cash you paid or my FV.)
Your Basis in the New Asset of Dunkaroo's: FV given up + Cash paid: $100 + $20 = $120 would be your Basis.
Your Journal Entry would be: (Db) Dunkaroo's for $120; (Cr) Charizard for $10; (Cr) Gain for $90; (Cr) Cash for $20.
.
You decide you don't want to develop diabetes and lose a leg from all those Dunkaroo's, so you turn me down. Instead of a sugar-induced coma, you ask me to trade Pokemon cards instead. Fine. Since moms can't tell the difference between a pikachu from a snorlax, she won't get mad at you for trading away your Charizard.
I offer you a whole deck of Pokemon cards. They're similar enough that mom won't be able to tell the difference; they lack commercial substance. The deck is worth $12 retail, but I really want that Charizard, so I don't care that I'm giving you extra value.
Since no “boot” is exchanged, we both record the exchange using our same basis:
You record the Deck at $10. I record Charizard at $12 (sucker…my deck is sick now).
.
OK, this is taking too long and I have way too much to do, lol.
Assume that Cash Paid/Received is 20% of the total FV given up (i.e., Lacks Commercial Substance)
If you PAY Cash in a Non-Monetary Exchange, your New Basis is your OLD BV + Cash Paid.
If you RECEIVE Cash (<25% of Assets Received): Recognize a Proportional Gain:
BV of Machine A = $60
FV of Machine A = $100
Theoretical Gain = $40
FV of Machine B = $90
Cash Received = $10
Your Gain = $100(FV) – $60(BV) = $40 Gain (Note that this is NOT the answer.)
% of Boot in the Amount Received = $10/$100 = 10% (This will be the Proportional Gain to recognize)
Your New Basis in Machine B = Old BV – Boot Received + % Gain Recognized
= $60(Old BV) – $10 (boot received) + $4 [10% * $40 Gain] (Proportional Gain Recognized)
= $54 (60 – 10 + 4)
October 13, 2014 at 2:16 am #627928Juliemiddle
Member@go1234 – I have no idea what a Chizard is, but that was a seriously impressive explanation of Non-Monetary exchange. And, I realize I had my formula wrong for Non-Commercial gain < 25%. Thank you!
AUD: 84 - Oct. 2013
BEC: 83 - Feb. 2014
REG: 91 - May, 2014
FAR: 68, 96 - Oct. 2014...DONECPAExcel, Ninja Audio (all sections)
October 13, 2014 at 2:25 am #627929mshewlett09
MemberHey guys, quick question for anyone studying FAR. For those using the ninja notes, I was hoping someone could clarify what is meant by the notes on page 55 of the FAR 2014 ninja notes. It states, in regards to DDB, “Note: Since Year 5 drops below S/L, then you continue to depreciate using S/L and abandon DDB.” I thought for DDB you go until you reach the salvage amount, and once the salvage amount is reached, which in this example would be year 8, you record depreciation expense as $0.
AUD 60, 10/01/12 85!!! YAAAY
REG 71, 70 WTF, 75 PASSED!!!
BEC 61, 70, 75!!!! THANK YOU JESUS!
FAR 5/31/2013BECKER + Cpareviewforfree.com + youtube
October 13, 2014 at 5:51 am #627930 -
AuthorReplies
- The topic ‘FAR Study Group Q4 2014 - Page 41’ is closed to new replies.