Exam 17: Synthesis and Extensions

The FASB and the IASB are reconsidering the role of uncertainty, or probability, in the definition, recognition, and measurement of liabilities.Existing recognition criteria include a probable future sacrifice of resources; one issue involves the minimum probability level to warrant recognition of an uncertain obligation as a liability.U.S.GAAP does not specify a minimum probability level, although the rule-of-thumb in practice is approximately _____ percent.

U.S.GAAP and IFRS provide criteria for distinguishing operating leases from capital leases.Which of the following is not true?

If firms expect to receive cash more than one year after the time of recognizing revenue, they measure revenues at the present value of the amount of cash they expect to receive.

Firms must designate each derivative as a hedging instrument, or else accounting views the derivative as a nonhedging instrument.Furthermore, firms must designate each hedging instrument as either a fair value hedge or a cash flow hedge.The accounting for nonhedging derivatives

Explain how U.S.GAAP and IFRS distinguish the accounting for (1) corrections of errors, (2) adjustments for changes in accounting principles, and (3) adjustments for changes in accounting estimates.

Firms may use the allowance method to account for estimated sales discounts, returns, and allowances, as well as for warranties.

Discuss the definition, recognition, and measurement of shareholders' equity for a corporation.

U.S.GAAP and IFRS provide criteria for distinguishing operating leases from capital leases.Which of the following is not true?

The IASB's conceptual framework defines a(n) _____ as a resource controlled by an entity as a result of past events and from which a firm expects future economic benefits.

Accrual accounting requires frequent, ongoing changes in estimates.

The FASB's conceptual framework for financial reporting objectives identify _____as the principal users of financial reports.

What are the financial reporting objectives?

The FASB's conceptual framework includes which of the following as financial reporting objectives?

Which of the following is not true?

The definition of an asset excludes

Which of the following is/are true?

Firms account for leases using either the operating lease method or the capital (finance) lease method.Which of the following is not true?

Which of the following is not true concerning the FASB and the IASB conceptual frameworks?

The FASB and IASB are working jointly to develop a revised, coordinated set of financial reporting objectives.They envision that the

One of the characteristics of a fair value measurement is that the measurement does embody a minimum probability for recognition.