Professional Documents
Culture Documents
Investing
Activities
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Investing Activities
Includes acquisition of long-term
imply asset.
Asset is recorded at Fair Value.
Fair Value includes cash paid, fair value of
debt incurred, fair value of lease payments .
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IFRS
Research costs are expensed.
Product development costs are capitalized.
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as operating activity.
Reduces current period net income.
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Costs of Self-Construction
Cost of self-constructed asset = Fair Value
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Capitalized interest
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accumulated expenditures
Interest computation
Interest
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acquiring natural
resources
Reclamation
cost or
restoration costs
Exploration
Costs
Costs incurred to
discover the
existence &
location of natural
resource
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Development
Costs
Tangible costs
(capitalized)
Intangible costs
(expensed)
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are capitalized.
Used by smaller producers.
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Step 2
Step 3
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Other countries
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Straight-line method or
accelerated method
Straight-line method
Amortization
Intangible assets
Depletion
Natural resources
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Straight-line method or
proportionate to
consumption
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IFRS
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IFRS
Record impairment if:
Carrying amount >
Recoverable amount
(Higher of fair value or
sale)
Implied goodwill = Fair
value of reporting unit
Fair value of identifiable
assets
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Long-Lived Assets
Upward revaluation
U.S.GAAP does
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Replacement
Gain/loss on disposal or
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Investment in Securities
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cost.
Interest & Dividend received/receivable
each year are recorded as revenue.
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Firms classify
securities that do not
fall into one of the
other two categories
as Available-for-sale.
Held-tomaturity
Firm has a
positive intent
& ability to
hold to
maturity.
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Trading security
Marked-to-market.
Unrealized gain or loss: As a part of Net
Income.
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Available-for-sale
Marked to market.
Unrealized gain or loss: As a part of other
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securities
Tested whether securities that experienced
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Income Statement at
Pro
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statements.
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Noncontrolling Interests
Arises if an investing firm acquires less
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Consolidation of Unconsolidated
Subsidiaries and Affiliates
Companies do not consolidate the
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Special-Purpose or Variable-Interest
Entity (VIE)
Can be a corporation, partnership, trust or
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Consolidating VIE
Firm must consolidate if it is the primary
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income.
Investments in 80% or more of the common
stock.
Consolidated
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Translation Methodology-Foreign
Currency is the Functional Currency
Income
Revenues & expenses are translated
Statement at average exchange rate.
Income includes realized translation
gains & losses on sale of foreign unit
Balance
Sheet
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Translation Methodology-Foreign
Currency is the Functional Currency
Translation adjustment is a component
of other comprehensive income &
includes:
Effect of exchange rate changes on the
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Balance
Sheet
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Subsidiary of US parent
Dividends received are translated at exchange
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Analyst Adjustments
Whether to include change in the foreign
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