Questions from Financial Accounting

Q: When is a derivative also an accounting hedge? When is it

When is a derivative also an accounting hedge? When is it not also an accounting hedge?

Q: Distinguish between a fair value hedge and a cash flow hedge.

Distinguish between a fair value hedge and a cash flow hedge.

Q: Recognizing a derivative classified as a fair value hedge of a firm

Recognizing a derivative classified as a fair value hedge of a firm commitment as an asset but not recognizing the commitment that the derivative is hedging as a liability is inconsistent.” Do you agr...

Q: Both U.S. GAAP and IFRS require the immediate recognition

Both U.S. GAAP and IFRS require the immediate recognition in net income of unrealized gains and losses on derivatives classified as fair value hedges. Both U.S. GAAP and IFRS delay recognition in net...

Q: Suggest reasons why a firm would acquire a derivative and not treat

Suggest reasons why a firm would acquire a derivative and not treat it as an accounting hedge.

Q: Berman Company purchased a plot of land for possible future development.

Berman Company purchased a plot of land for possible future development. The land had fair value of $86,000. Berman Company gave a 3-year interest-bearing note. The note had face value of $100,000 and...

Q: Define the concept of an economic entity and explain its importance in

Define the concept of an economic entity and explain its importance in preparing consolidated financial statements of a parent company with its controlled subsidiaries.

Q: Distinguish between the non controlling, or minority, interest in net

Distinguish between the non controlling, or minority, interest in net income of a consolidated subsidiary and the non controlling, or minority, interest in net assets of a consolidated subsidiary.

Q: Under what circumstances might majority share ownership of another entity not serve

Under what circumstances might majority share ownership of another entity not serve as an indicator of control?

Q: Distinguish between significant influence and control, and describe how these concepts

Distinguish between significant influence and control, and describe how these concepts relate to the method of accounting for inter corporate investments.