Ch 7 Cash and Receivables

Ch 7 Cash and Receivables - Cash and Receivables Chapter 7...

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Cash and Receivables Chapter 7 1
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2 Cash and Receivables Cash What is cash? Reporting cash Summary of cash- related items Presentation, Disclosure, and Analysis of Receivables Presentation and disclosure Analysis Receivables Recognition and measurement of accounts receivable Impairment of accounts receivable Recognition and measurement of short- term notes and loans receivable Recognition and measurement of long- term notes and loans receivable Derecognition of receivables IFRS / Private Entity GAAP Comparison Comparison of IFRS and private entity GAAP Looking ahead
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3 Financial Asset “Any asset that is: (i) cash; (ii) a contractual right to receive cash or another financial asset from another party; (iii) a contractual right to exchange financial instruments with another party under conditions that are potentially favourable to the entity; or (iv) an equity instrument of another entity” CICA Handbook, Section 3856
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4 Cash and Receivables Cash What is cash? Reporting cash Summary of cash- related items Presentation, Disclosure, and Analysis of Receivables Presentation and disclosure Analysis Receivables Recognition and measurement of accounts receivable Impairment of accounts receivable Recognition and measurement of short- term notes and loans receivable Recognition and measurement of long- term notes and loans receivable Derecognition of receivables IFRS / Private Entity GAAP Comparison Comparison of IFRS and private entity GAAP Looking ahead
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5 What is Cash?  Cash is reported as a current asset if it is readily available to pay current obligations and is free of restrictions Cash consists of coins, currency, available funds on deposit at the bank, and petty cash Also includes money orders, certified cheques, cashier’s cheques, personal cheques, bank drafts, and usually savings accounts Postdated cheques, travel advances, and stamps on hand are not classified as cash
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6 Reporting of Cash Reporting cash needs special attention of the following: 1. Restricted cash 2. Cash in foreign currencies 3. Bank overdrafts 4. Cash equivalents
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7 Restricted Cash Compensating balances: minimum cash balances maintained by a corporation in support of existing borrowings These funds are not available for use by the corporation, but the bank can use the restricted cash Petty cash, special payroll, and dividend accounts are examples of cash set aside for a special purpose (usually not material)
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8 Restricted Cash If the restricted cash balance is material, must be segregated from Cash as follows: Classified as current assets if they relate to short-term loans Classified as non-current assets if set aside for investment or financing purposes (e.g.
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Ch 7 Cash and Receivables - Cash and Receivables Chapter 7...

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