In-class study questions covering inflation, merger accounting, segments, analyzing foreign financial statements.
1. Identify the following US GAAP and International accounting standards: subject of standard? Major points of standard?
a. IAS 28
b. IFRS 8
c. SFAS 131
d. SFAS 14R
e. IFRS 3
f. IAS 27
g. IAS 29
h. SFAS 89
i. IAS 21
j. IAS 31
2. What is the effect on asset values when historical cost accounting is used? Understated asset values may cause what effect on depreciation and cost of goods sold?
3. Identify the effects of debt in a company’s financial statements.
a. Interest expense
b. Income taxes
c. Debt/equity ratio
4. Identify the effects of understated assets.
a. Effect on expenses, especially depreciation and cost of goods sold.
b. Effect on borrowing
c. Effect as a potential takeover target
5. Identify the effects of overstated income.
a. Income taxes.
b. Dividends
c. Liquidity.
6. What is the effect of holding monetary assets in inflationary times? Holding monetary liabilities?
7. What is the result of using General Purchasing Power accounting? What inflation adjusted method of accounting is required in the US?
8. How and where are holding gains and losses reported under GPP?
9. What accounts are restated for inflation under GPP?
10. What is the effect of borrowing money in an inflationary period?
11. What is Current Cost accounting?
12. Hyperinflation, what is it? Where is it a problem?
13. Consolidation, when is it appropriate? What is its weakness?
14. What is the importance of “significant influence?” What accounting is used?
15. When is it not ok to use consolidation even if the ownership interest is greater than 50% - US standard and International standard?
16. Discuss segment reporting: definition, decision, rules, disclosures. What is the...