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Flashcard 1481680489740

Tags
#cfa-level-1 #expense-recognition #reading-25-understanding-income-statement
Question
Several depreciation methods are commonly used, such as the straight-line method, [...] method, and the units of production method.
Answer
diminishing balance


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iew. The method used to compute depreciation should reflect the pattern over which the economic benefits of the asset are expected to be consumed. IFRS do not prescribe a particular method for computing depreciation but note that <span>several methods are commonly used, such as the straight-line method, diminishing balance method (accelerated depreciation), and the units of production method (depreciation varies depending upon production or usage). The straight-line method allocates evenly the cost of long-lived assets less estimated residual value over the estimated useful life of an asset. (The term “straight line”

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4.2. Issues in Expense Recognition
the amount of future expenses resulting from its warranties, to recognize an estimated warranty expense in the period of the sale, and to update the expense as indicated by experience over the life of the warranty. <span>4.2.3. Depreciation and Amortisation Companies commonly incur costs to obtain long-lived assets. Long-lived assets are assets expected to provide economic benefits over a future period of time greater than one year. Examples are land (property), plant, equipment, and intangible assets (assets lacking physical substance) such as trademarks. The costs of most long-lived assets are allocated over the period of time during which they provide economic benefits. The two main types of long-lived assets whose costs are not allocated over time are land and those intangible assets with indefinite useful lives. Depreciation is the process of systematically allocating costs of long-lived assets over the period during which the assets are expected to provide economic benefits. “Depreciation” is the term commonly applied to this process for physical long-lived assets such as plant and equipment (land is not depreciated), and amortisation is the term commonly applied to this process for intangible long-lived assets with a finite useful life.32 Examples of intangible long-lived assets with a finite useful life include an acquired mailing list, an acquired patent with a set expiration date, and an acquired copyright with a set legal life. The term “amortisation” is also commonly applied to the systematic allocation of a premium or discount relative to the face value of a fixed-income security over the life of the security. IFRS allow two alternative models for valuing property, plant, and equipment: the cost model and the revaluation model.33 Under the cost model, the depreciable amount of that asset (cost less residual value) is allocated on a systematic basis over the remaining useful life of the asset. Under the cost model, the asset is reported at its cost less any accumulated depreciation. Under the revaluation model, the asset is reported at its fair value. The revaluation model is not permitted under US GAAP. Here, we will focus only on the cost model. There are two other differences between IFRS and US GAAP to note: IFRS require each component of an asset to be depreciated separately and US GAAP do not require component depreciation; and IFRS require an annual review of residual value and useful life, and US GAAP do not explicitly require such a review. The method used to compute depreciation should reflect the pattern over which the economic benefits of the asset are expected to be consumed. IFRS do not prescribe a particular method for computing depreciation but note that several methods are commonly used, such as the straight-line method, diminishing balance method (accelerated depreciation), and the units of production method (depreciation varies depending upon production or usage). The straight-line method allocates evenly the cost of long-lived assets less estimated residual value over the estimated useful life of an asset. (The term “straight line” derives from the fact that the annual depreciation expense, if represented as a line graph over time, would be a straight line. In addition, a plot of the cost of the asset minus the cumulative amount of annual depreciation expense, if represented as a line graph over time, would be a straight line with a negative downward slope.) Calculating depreciation and amortisation requires two significant estimates: the estimated useful life of an asset and the estimated residual value (also known as “salvage value”) of an asset. Under IFRS, the residual value is the amount that the company expects to receive upon sale of the asset at the end of its useful life. Example 9 assumes that an item of equipment is depreciated using the straight-line method and illustrates how the annual depreciation expense varies under different estimates of the useful life and estimated residual value of an asset. As shown, annual depreciation expense is sensitive to both the estimated useful life and to the estimated residual value. <span><body><html>







Flashcard 1602920516876

Tags
#cfa #cfa-level-1 #financial-reporting-and-analysis #reading-24-understanding-income-statements
Question
Comprehensive income may be reported on [...] or [...]
Answer
an income statement

separate statement.


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Comprehensive income
lity adjustment. Unrealized gains (losses) on available-for-sale investments. Unrealized gains (losses) on derivative investments. FASB has taken the position that income for a period should be all-inclusive comprehensive income. <span>Comprehensive income may be reported on an income statement or separate statement, but is usually reported on a statement of stockholders' equity. <span><body><html>







Flashcard 1611261938956

Question
Statement of [...] includes capital transactions with owners (e.g., issuing shares) and distributions to owners (i.e., dividends).
Answer
Changes in Shareholders' Equity


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Equity
d earnings. The statement of shareholders' equity is a financial statement that summarizes changes that occurred during the accounting period in components of the stockholders' equity section of the balance sheet. For example, it <span>includes capital transactions with owners (e.g., issuing shares) and distributions to owners (i.e., dividends). The shareholders' equity section of the balance sheet lists the items in contributed capital and retained earnings on the balance sheet date. <span><body><html>







Flashcard 1612732304652

Tags
#balance-sheet-analysis
Question
How can you tell by ratios if a company has negative working capital?
Answer
A current ratio of less than 1


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Subject 5. Uses and Analysis of the Balance Sheet
the following ratios takes a slightly different view of cash or near-cash items. Current Ratio is a measure of the number of dollars of current assets available to meet current obligations. It is the best-known liquidity measure. <span>A current ratio of less than 1 indicates the company has negative working capital. Quick Ratio (Acid-Test Ratio) eliminates less liquid assets, such as inventory and pre-paid expenses, from the current ratio. If inve







In other words, she was talking the talk about publication as the pathway to promotion but not walking the walk in her daily life. Instead, she was spending the vast majority of her time on teaching and service.

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Step #1: Categorize Your To-Do List by Research, Teaching, and Service

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Step #2: Commit Yourself to at Least 30 Minutes of Writing EVERY DAY

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realistically meeting the promotion and tenure criteria at your institution requires you to: a) understand the evaluation criteria and b) align your daily work t ime with those expectations.

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Step #3: Map Your To-Do Tasks onto Specific Time Blocks in Your Calendar

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Write out your to-do items for the week, being sure to categorize your to-do list by Research, Service, and Teaching. * Map that list onto specific blocks of time in your calendar, and proactively decide what to do with the items that don't fit. * Try working just one week with your time (literally) aligned with your priorities.

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If al-Ba , ¯ıth really was in al-Bas . ra, then it is possible that after Jar¯ır moved there, al-Ba , ¯ıth also decided to live, or at least to visit, the city in order to continue participating in the poetic contest against his two rivals.

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Jayyusi believes that the Arab tribes that settled in Iraq welcomed this contest as a means of relief from inter-tribal tensions and found the interesting naqaid output of the two poets a source of entertainment and catharsis.

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Flashcard 1612754586892

Question
Jayyusi believes that the Arab tribes that settled in Iraq welcomed the contest between Jarir and al-Farazdaq as a means of relief from inter-tribal tensions and found the interesting naqaid output of the two poets a source of [two things]
Answer
entertainment and catharsis


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Jayyusi believes that the Arab tribes that settled in Iraq welcomed this contest as a means of relief from inter-tribal tensions and found the interesting naqaid output of the two poets a source of entertainment and catharsis.

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Flashcard 1612755635468

Question
Jayyusi believes that the Arab tribes that settled in Iraq welcomed this contest as a means of relief from inter-tribal tensions and found the interesting naqaid output of the two poets a source of entertainment and [...].
Answer
catharsis


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d><head>Jayyusi believes that the Arab tribes that settled in Iraq welcomed this contest as a means of relief from inter-tribal tensions and found the interesting naqaid output of the two poets a source of entertainment and catharsis.<html>

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