Questions from Intermediate Accounting

Q: ASC 825-10 Financial Instruments – Overall permits (but does

ASC 825-10 Financial Instruments – Overall permits (but does not require) the option to report most financial assets at fair value. Read paragraph A3 of the Basis for Conclusions in Statement of Finan...

Q: The lease rules discussed in this chapter have an effective date for

The lease rules discussed in this chapter have an effective date for fiscal years beginning after December 15, 2018. Under U.S. GAAP, the accounting treatment of operating leases for the lessee were q...

Q: IFRS accounts for all leases in the same way (for the

IFRS accounts for all leases in the same way (for the lessee), but U.S. GAAP measures lease-related expenses and the right-of-use asset for operating leases (lessee) differently than for finance lease...

Q: On February 1, Seville Sales, Inc. purchased inventory costing

On February 1, Seville Sales, Inc. purchased inventory costing $450,000 using a 6-month trade note payable. The note carries an annual interest rate of 9%. Seville has a December 31 yearend. Prepare t...

Q: In deliberating on ASU 2016-02, Leases, the Board

In deliberating on ASU 2016-02, Leases, the Board debated several methods for lease classification. What did the Board decide and why? What other methods did they consider and why did they not choose...

Q: U.S. GAAP did not require companies to expense employee

U.S. GAAP did not require companies to expense employee stock options through the income statement prior to 2005. Paragraphs B2 through B11 in the Statement of Financial Accounting Standards No. 123(R...

Q: Prior to 2005, firms did not have to recognize an expense

Prior to 2005, firms did not have to recognize an expense for all employee stock options but could disclose the effect of the options in the footnotes. The concept of recognition versus disclosure in...

Q: Read paragraphs 95 through 99 in Appendix B: Background information and

Read paragraphs 95 through 99 in Appendix B: Background information and basis for conclusions in FASB’s Statement of Financial Accounting Standards No. 128. Required: a. Why did the Board decide to...

Q: Read paragraphs 105 through 107 in Appendix B: Background information and

Read paragraphs 105 through 107 in Appendix B: Background information and basis for conclusions in FASB’s Statement of Financial Accounting Standards No. 128. Required: a. Why did the Board decide...

Q: Read the Basis for Conclusions (paragraphs B1 through B38) in

Read the Basis for Conclusions (paragraphs B1 through B38) in FASB’s Statement of Financial Accounting Standards No. 154 to respond to the following questions. 1. When debating the issues of FASB’s “...