Self-Study
10
Intermediate
Accounting
Basic understanding of financial statements

Course Description

The AICPA has issued its new, special-purpose Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs™). This groundbreaking framework was developed to provide comprehensive, meaningful, efficient, and, importantly, cost effective financial reporting for the 20 million owner-managed companies now operating in the United States. In this course, you'll learn about the key differences between FRF for SMEs, other special-purpose frameworks, IFRS for SMEs, and GAAP. FRF for SMEs is principles-based and focused on private companies that don't need GAAP financial statements. For example, FRF for SMEs uses historical cost and doesn't require application of comprehensive income rules. Because FRF for SMEs has undergone public comment and professional scrutiny over many years of vetting by the profession, users of financial statements, and standard-setting organizations, its rapid, widespread adoption is expected. The framework has no effective date and, therefore, is available immediately. This course will help you become an early adopter of this powerful, client-oriented framework.



Instructor

Patricia Lane Williams, CPA

Patricia (Pat) Lane Williams, CPA, is a former sole practitioner in Lubbock, Texas. She now lives in Denver, Colorado, where she spends her time, among other things, writing continuing education for accountants. She moved to Denver after spending 8 years in New York City at the AICPA; 6 of those years as the director of professional development where she was responsible for self-study programs, conferences, videos, and vendor relations. One of those vendors was MicroMash, located in Denver, where she was the vice president of editorial accounting and was responsible for development and maintenance of review programs for certification examinations and continuing professional education programs.

Pat is currently a freelance speaker and author. She has authored CPE programs for the AICPA, including “Navigating the New FASB Codification: Research Real–Life Accounting Issues,” covering the FASB’s codification project and revenue recognition in today’s business climate. She’s also author of a quarterly supplement for the AICPA. The supplement covers activities of the FASB, AICPA, PCAOB, IASB, and the SEC.



Course Specifics

Accounting
Sep 15, 2017
Basic understanding of financial statements
SS1133373
286
None


Compliance Information

103220
Qualifies for CA Fraud: No


Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Identify the events leading up to the development of the Financial Reporting Framework for Small- and Medium-Sized Entities (FRF for SMEs™)
  • Cite the responsibilities of the FASB Private Company Council

Chapter 2

  • Identify the role of concept statements
  • List the components of financial statements

Chapter 3

  • Identify the general principles of financial statement presentation and accounting policies in FRF for SMEs

Chapter 4

  • Identify the method an entity uses to transition its financial statements to FRF for SMEs

Chapter 5

  • Cite the principal requirements for preparation of a Statement of Financial Position under the guidance FRF for SMEs
  • List tenants of equity classification in the Statement of Position in FRF for SMEs

Chapter 6

  • List the principles for recognizing and measuring financial assets and financial liabilities in FRF for SMEs
  • Identify the treatment of long-lived assets in FRF for SMEs

Chapter 7

  • Identify the separate line items contained in the statement of operations

Chapter 8

  • List the components of the statement of cash flows under FRF for SMEs

Chapter 9

  • Identify the treatment of commitments, asset retirement obligations, subsequent events, and contingencies in FRF for SMEs

Chapter 10

  • Cite the principles for the preparation of consolidated financial statements and for accounting for a noncontrolling interest in a subsidiary in consolidated financial statements subsequent to a business combination
  • Cite the principles and requirements for an acquirer to recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in an acquiree
  • Cite the principles for accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, revenue, and expenses in the financial statements

Chapter 11

  • Cite the principles for the recognition, measurement, and disclosure of the cost of retirement and other post-employment benefits in FRF for SMEs

Chapter 12

  • Cite the principles for the recognition, measurement, presentation, and disclosure of income and refundable taxes in an entity's financial statements under FRF for SMEs

Chapter 13

  • Identify the accounting requirements for lessees and for lessors under FRF for SMEs

Chapter 14

  • Cite the principles for the measurement and disclosure of related party transactions in the financial statements in FRF for SMEs
  • Cite the principles for the recognition, measurement, and disclosure of nonmonetary transactions in FRF for SMEs


Table of Contents

Chapter 1 – Introduction

Learning Objectives

Introduction

Financial Accounting Foundation (FAF) Working Group

Private Company Council (PCC)

Financial Accounting Standards Board (FASB)

Composition of the PCC

Oversight of the PCC

Three Year Assessment

The AICPA and FRF for SMEs

AICPA Financial Reporting for Small- and Medium-Sized Entities

FRF for SMEs

Authority for FRF for SMEs

Chapter 1 Review Questions

Chapter 1 Review Question Answers and Rationales

Chapter 2 – Concepts

Learning Objectives

Introduction

Components of Financial Statements

Why Financial Statements

Benefit vs. Cost

Materiality

Qualitative Characteristics

Understandability

Relevance

Reliability

Comparability

Elements of Financial Statements

Economic Resources, Obligations, and Equity of an Entity at a Point in Time

Recognition Criteria

Accrual Basis of Accounting

Measurement

Chapter 2 Review Questions

Chapter 2 Review Question Answers and Rationales

Chapter 3 – General Principles of Financial Statement Presentation and Accounting Policies

Learning Objectives

Introduction

Fair Presentation in Accordance with the FRF for SMEs

Going Concern

Financial Statements

Notes to Financial Statements

Comparative Information

Disclosure of Accounting Policies

Other Disclosures

Risks and Uncertainties

Nature of Operations

Use of Estimates

Concentrations

Disclosure

Chapter 3 Review Questions

Chapter 3 Review Question Answers and Rationales

Chapter 4 – Transition to FRF for SMEs

Learning Objectives

Introduction

Terms

Opening Balance Sheet

Accounting Policies

Exceptions to Retrospective Application of Certain Principles Within the FRF for SMEs

Disclosure

Chapter 4 Review Questions

Chapter 4 Review Question Answers and Rationales

Chapter 5 – Statement of Financial Position

Learning Objectives

Introduction

Presentation

Assets

Inventories

Definitions

Simultaneous Production of more than one Product

Other Costs

Excluded Costs

Interest Costs

Techniques for the Measurement of Cost

Cost Formulas for Inventories

Specific Identification

LIFO, FIFO, and Weighted Average

Net Realizable Value

Estimates

Materials and Other Supplies

Reversal of the Write-Down of Inventories

Recognition as an Expense

Disclosure

Intangible Assets

Definitions

Intangible Assets

Identifiability

Control

Future Economic Benefits

Recognition and Measurement

Separate Acquisition

Internally-Generated Goodwill

Internally-Generated Intangible Assets

Research Phase

Development Phase

Cost of an Internally-Generated Intangible Asset

Recognition of an Expense

Start-up Costs

Past Expenses Not to Be Recognized as an Asset

Subsequent Measurement

Amortization

Determining the Useful Life of an Intangible Asset

Recognition and Measurement of an Impairment Loss

Goodwill

Presentation

Disclosure

Impairment Loss

Property, Plant, and Equipment

Terms

Measurement

Cost

Acquisition, Construction, or Development over Time

Improvement

Depreciation

Disclosure

Liabilities

Equity

Capital Transactions

Terms

Acquisition or Redemption of Shares

Acquisition of Shares

Resale of Acquired Shares

Retirement or Cancellation of Shares

Accounting for Stock and Other Equity Compensation

Equity Transactions with Nonemployees

Dividends

Presentation

Financial Statements of Unincorporated Businesses

Disclosure

Limited Liability Entities

Disclosure

Equity, Debt, and Other Investments

Terms

Accounting for Investments

Equity Method

Investment Income

Cost Method

Gains and Losses on Sales of Investments

Presentation

Disclosure

Chapter 5 Review Questions

Chapter 5 Review Question Answers and Rationales

Chapter 6 – Special Accounting Considerations and Disposal of Long-Lived Assets

Learning Objectives

Introduction

Special Accounting Considerations for Certain Financial Assets and Liabilities

Terms

Recognition and Measurement

Presentation

Liabilities and Equity

Offsetting of a Financial Asset and a Financial Liability

Derecognition

Transfers of Receivables

Financial Liabilities

Disclosure

Financial Assets

Transfers of Receivables

Financial Liabilities

Derivatives

Items of Income

Disposal of Long-Lived Assets and Discontinued Operations

Chapter 6 Review Questions

Chapter 6 Review Question Answers and Rationales

Chapter 7 – Statement of Operations

Learning Objectives

Introduction

Presentation

Revenue

Sources of Revenue

Definitions

Recognition

Services and Long-Term Contracts

Persuasive Evidence of an Arrangement

Delivery

Seller’s Price to the Buyer Is Fixed or Determinable

Separately Identifiable Components

Use of Entity Resources

Recognizing Revenues from the Sale of Goods

Significant Risk of Ownership

Risks and Rewards of Ownership

Service Transactions and Long-Term Contracts

Percentage of Completion Method

Measures of Performance

Completed Contract Method

Uncertainties

Uncertainties Relating to the Measurement of Revenue

Reporting Revenue Gross or Net

Entity as Principal

Entity as Agent

Presentation

Disclosure of Revenue Recognition Policy

Disclosure of Major Categories of Revenue

Expenses

Recognition of Expenses and Losses

Economic Benefits

Accounting Changes, Changes in Accounting Estimates, and Correction of Errors

Terms

Changes in Accounting Policy

Applying Changes in Accounting Policies

Retrospective Application

Prospective Application of an Accounting Policy

Changes in Accounting Estimates

Errors

Impracticability Regarding Retrospective Application

Disclosure

Changes in Accounting Policies

Changes in Accounting Estimates

Errors

Chapter 7 Review Questions

Chapter 7 Review Question Answers and Rationales

Chapter 8 – Statement of Cash Flows

Learning Objectives

Introduction

Terms

Cash and Cash Equivalents

Policies

Bank Borrowings

Classification of Cash Flows

Operating Activities

Investing Activities

Financing Activities

Cash Flows from Operating Activities

Direct method

Indirect Method

Cash Flows From Investing and Financing Activities

Foreign Currency Cash Flows

Interest and Dividends

Cash inflows

Cash outflows

Income Taxes

Business Combinations and Disposals of Business Units

Noncash Transactions

Disclosure

Cash and Cash Equivalents

Business Combinations and Disposals of Business Units

Noncash Transactions

Chapter 8 Review Questions

Chapter 8 Review Question Answers and Rationales

Chapter 9 – Commitments, Contingencies, Asset Retirement Obligations, and Subsequent Events

Learning Objectives

Introduction

Commitments

Disclosures

Contingencies

Measurement of Uncertainty

Accounting Treatment

Contingent Losses

Contingent Gains

Disclosure

Contingent Losses

Contingent Gains

Asset Retirement Obligations

Recognition

Measurement

Recognition and Allocation of an Asset Retirement Cost

Effects of Funding and Assurance Provisions

Disclosure

Guarantees

Chapter 9 Review Questions

Chapter 9 Review Question Answers and Rationales

Chapter 10 – Consolidated Financial Statements, Business Combinations, Joint Ventures, and Subsidiaries

Learning Objectives

Introduction

Consolidated Financial Statements and Noncontrolling Interests

Terms

Combined Financial Statements

Preparation of Consolidated Financial Statements

Date of Acquisition

Intercompany Balances

Consolidated Retained Earnings

Dates Subsequent to an Acquisition

Normal Operating Transactions Subsequent to an Acquisition

Depreciation and Amortization

Shareholders’ Equity Transactions with Interests outside the Consolidated Group

Acquisition by a Subsidiary of Its Own Shares from Interests Outside the Group

Miscellaneous

Basis of Accounting

Statements at Different Dates

Noncontrolling Interests

Procedures

Change in Ownership Interest in a Consolidated Subsidiary

Loss of Control of a Consolidated Subsidiary

Presentation of Consolidated Financial Statements and Noncontrolling Interests

Statement of Operations Presentation in a Period of an Acquisition or Disposal

Noncontrolling Interests

Disclosure

Business Combinations

Terms

Identifying a Business Combination

The Acquisition Method

Recognizing and Measuring the Identifiable Assets Acquired, the Liabilities Assumed, and Any Noncontrolling Interest in the Acquiree

Recognition Principle

Recognition Conditions

Classifying or Designating Identifiable Assets Acquired and Liabilities Assumed in a Business Combination

Measurement Principle

Exceptions to the Recognition and Measurement Principles

Exceptions to Both the Recognition and Measurement Principles

Intangible Assets

Asset Retirement Obligations

Income Taxes

Employee Benefits

Indemnification Assets

Exceptions to the Measurement Principle

Assets Held for Sale

Recognizing and Measuring Goodwill or a Gain From a Bargain Purchase

Bargain Purchases

Consideration Transferred

Contingent Consideration

Additional Guidance for Applying the Acquisition Method to Particular Types of Business Combinations

A Business Combination Achieved in Stages

A Business Combination Achieved Without the Transfer of Consideration

Measurement Period

Determining What Is Part of the Business Combination Transaction

Acquisition-Related Costs

Subsequent Measurement and Accounting

Indemnification Assets

Combinations of Entities Under Common Control

Recognition and Measurement

Financial Statement Presentation in Period of Transfer

Comparative Financial Statement Presentation for Prior Years

Disclosure

Combinations of Entities under Common Control

Interests in Joint Ventures

Terms

Definitions

Jointly Controlled Operations

Jointly Controlled Assets

Jointly Controlled Entities

Recognition

Proportionate Consolidation

Presentation

Disclosure

Subsidiaries

Terms

Recognition and Presentation

Consolidated Financial Statements

Nonconsolidated Financial Statements

Disclosure

Chapter 10 Review Questions

Chapter 10 Review Question Answers and Rationales

Chapter 11 – Retirement and Other Postemployment Benefits

Learning Objectives

Retirement and Other Postemployment Benefits

Terms

Basic Principles

Deferred Compensation Contracts

Recognition, Measurement, and Disclosure—Defined Contribution Plans

Recognition, Measurement and Disclosure—Multiemployer Plans

Recognition, Measurement, and Disclosure—Individual Deferred Compensation Contracts

Recognition, Measurement, and Disclosure—Defined Benefit Plans

Current Contribution Payable Method

Accrued Benefit Obligation Method

Immediate Recognition Approach

Recognition

Measurement

Accrued Benefit Obligation

Plan Assets

Limit on the Carrying Amount of an Accrued Benefit Asset

Determination of Cost for the Year

Entities with Two or More Plans

Deferral and Amortization Approach

Recognition

Measurement

Actuarial Valuation Method

Measurement Date of Plan Assets and Accrued Benefit Obligation

Discount Rate

Plan Assets

Determination of Cost for the Period

Entities with Two or More Plans

Limit on the Carrying Amount of an Accrued Benefit Asset

Settlements, Insurance Contracts and Arrangements, and Curtailments

Insurance Contracts and Arrangements

Disclosure

Termination Benefits

Chapter 11 Review Questions

Chapter 11 Review Question Answers and Rationales

Chapter 12 – Income Taxes

Learning Objectives

Introduction

Terms

Accounting Policy

Entities Not Subject to Income Taxes

Recognition

Measurement

Intraperiod Allocation

Deferred Income Taxes Method

The Basic Principles of Deferred Income Taxes

Recovery or Settlement of the Carrying Amount of an Asset or Liability

Unused Tax Losses, Income Tax Reductions, and Certain Other Items

Business Combinations

Recognition

Current Income Tax Liabilities and Current Income Tax Assets

Deferred Income Tax Liabilities and Deferred Income Tax Assets

Taxable and Deductible Temporary Differences, Unused Tax Losses, and Income Tax Reductions

Reassessment of Deferred Income Tax Assets

Intragroup Transfers

Investments in Subsidiaries, Interests in Joint Ventures, and Equity Method Investments

Assets Acquired Other Than in a Business Combination

Business Combinations, New Basis (Push-down) Accounting, Investments Subject to Significant Influence, and Interests in Joint Ventures

Measurement

Intraperiod Allocation

Alternative Minimum Tax

Presentation

Income Tax Expense

Income Tax Liabilities and Income Tax Assets

Disclosure

Chapter 12 Review Questions

Chapter 12 Review Question Answers and Rationales

Chapter 13 – Leases

Learning Objectives

Leases

Introduction

Terms

Benefits and Risks

Lessee

Lessor

Accounting Treatment by a Lessee

Presentation of a Capital Lease

Method of Accounting for an Operating Lease

Accounting Treatment by a Lessor

Method of Accounting for a Direct Financing Lease

Method of Accounting for a Sales-Type Lease

Collectability and Recoverability Issues

Presentation of a Direct Financing or Sales-Type Lease

Method of Accounting for an Operating Lease

Participation by a Third Party

Subleases

Sale-Leaseback Transaction

Leases Involving Land and Buildings

Related Party Leases

Disclosures

Capital Lease—Lessee

Operating Lease—Lessee

Direct Financing or Sales-Type Lease—Lessor

Operating Lease—Lessor

Chapter 13 Review Questions

Chapter 13 Review Question Answers and Rationales

Chapter 14 – Related Parties, Nonmonetary Transactions, Foreign Currency Transactions, and Push-down Accounting

Learning Objectives

Introduction

Related Parties

Terms

Identification of Related Parties

Measurement

Disclosure

Description of Relationship

Description of Transactions

Amount of Transactions

Representations About Market Value

Nonmonetary Transactions

Terms

Description of Nonmonetary Transactions

Measurement Criteria

Restructuring or Liquidation

Recognition of Gains and Losses

Disclosure

Foreign Currency Translation

Terms

Translation of Foreign Currency Transactions and Related Financial Statement Items of the Reporting Entity

Use of Averages or Other Methods of Approximation

Disclosure

New Basis (Push-down) Accounting

Terms

Recognition

Acquisition of an Entity—Push-down Accounting

Measurement

Retained Earnings and the Revaluation Adjustment

Income Tax Benefits

Disclosure

Chapter 14 Review Questions

Chapter 14 Review Question Answers and Rationales

Glossary

Index

Qualified Assessment 

Answer Sheet

Course Evaluation

 



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