Exam 2 Topics - • A/R – Net realizable value – Estimating bad debt expense • Income statement approach – of sales • Balance sheet

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Financial Exam #2 Topics
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Revenue Recognition Underlying concepts behind revenue  recognition Earnings process Collectability of consideration (usually cash)
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Revenue Recognition Long-term contracts Installment sales Cost recovery % of completion (not available under IFRS) Completed contract
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Multiple Deliverables Arrangements Criteria for “separate unit of accounting” How is the revenue for MDA’s allocated among the different deliverables? Relative standalone fair value of the individual deliverables. 3-level hierarchy for “fair value” under the new standards VSOE – vendor specific objective evidence (standalone selling price)
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Cash and Receivables Definition of “cash equivalents”
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Unformatted text preview: • A/R – Net realizable value – Estimating bad debt expense • Income statement approach – % of sales • Balance sheet approach – % of receivables – aging of A/R Inventory • What types of costs are included in “inventory”? • Periodic versus perpetual systems • Specific ID • Weighted average cost • FIFO • LIFO Inventory Valuation • Lower of cost or market (LCM) • GAAP – “market” is net replacement cost – Can’t be lower than [NRV-profit margin] – Can’t be higher than NRV • IFRS – “market” is fair value Other Inventory Issues • Gross profit method – Use estimated GP% to calculate COGS and back into ending inventory estimate • IFRS differences...
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This note was uploaded on 11/03/2010 for the course ACCTG 321 taught by Professor Will during the Spring '08 term at San Diego State.

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Exam 2 Topics - • A/R – Net realizable value – Estimating bad debt expense • Income statement approach – of sales • Balance sheet

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