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Unformatted text preview: declaration in the first paragraph of the Section (labeled
―15-1‖) is of the conforming kind. Lesson 4: Understanding the Scope of Guidance 42 c. Click the link ―225-10-15‖ (i.e., Section 15 of Subtopic 10 of Topic 225) to
navigate to the Scope and Scope Exceptions Section of the Overall Subtopic
within the same Topic.
d. Observe that the scope declaration in the first paragraph of the Section (labeled
―15-1‖) is of the pervasive kind. Problems
P1: With regard to Subtopic 50, Website Development Costs, of Topic 350, Intangibles—
Goodwill and Other:
a. Would the Subtopic’s guidance apply to a company’s purchase of a server
computer to host a website that the company is developing?
b. Identify the specific Subtopic, Section, and paragraph within Topic 350 that
contains the scope and/or scope exceptions information on which your answer to
item ―a‖ above is based.
P2: With regard to Section 25, Recognition, of Subtopic 845, Nonmonetary Transactions,
of Topic 985, Software:
a. Describe the entities to which the Section’s guidance applies.
b. Describe the transactions to which the Section’s guidance applies. Lesson 4: Understanding the Scope of Guidance 43 LESSON Citing Codification Content 5 Lesson Scenario
Francine is the vice-president of finance in a startup company that plans to lease,
rather than purchase, various items of computer hardware. She must develop an accounting
policy for correctly classifying each lease as either an operating lease or a capital lease in
accordance with U.S. GAAP.
Francine finds relevant guidance in the Codification and verifies the scope of that
guidance. When composing the text of the new accounting policy, Francine cites the specific
Codification guidance that provides authoritative support for the policy. She also composes a
disclosure regarding the policy, to be included in the notes to her company’s financial
statements, citing the specific Codification guidance on which the policy is based. Learning Outc...
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This note was uploaded on 03/27/2014 for the course ECON 12586 taught by Professor Yorambarzel during the Fall '09 term at University of Washington.
- Fall '09