Proponents argue that expanding fair value accounting rules will make financial reporting more relevant to users. Former SEC chairman Arthur Levitt also contended in an interview that fair value provides the kind of transparency essential to restore public confidence in U. In contrast, opponents of fair value have raised concerns about the impaired reliability of reported financial information, arguing that fair value accounting often relies on subjectivity in the measurement of various financial statement items. In particular, when active markets do not exist for assets and liabilities, the business must estimate the fair value by applying present value techniques, which opens up the possibility of intentional or unintentional errors in accounting estimates.
Company A has received an operating-differential subsidy pursuant to the Merchant Marine Act ofas amended. How should such subsidies be displayed in the statement of comprehensive income?
Revenue representing an operating-differential subsidy under the Merchant Marine Act ofas amended, must be set forth as a separate line item in the statement of comprehensive income either under a revenue caption presented separately from revenue from contracts with customers accounted for under ASC Topic or as a credit in the costs and expenses section.
Company B excludes depreciation and depletion from cost of sales in its income statement. How should this exclusion be disclosed? If cost of sales or operating expenses exclude charges for depreciation, depletion and amortization of property, plant and equipment, the description of the line item should read somewhat as follows: Does the staff generally request disclosure of this fact?
In such event, a note must 1 disclose the aggregate dollar and per share effects of the tax holiday and 2 briefly describe the factual circumstances including the date on which the special tax status will terminate.
Removed by SAB E. Chronological Ordering Of Data Question: Does the staff have any preference in what order data are presented e. The staff has no preference as to order; however, financial statements and other data presented in tabular form should read consistently from left to right in the same chronological order throughout the filing.
Similarly, numerical data included in narrative sections should be consistently ordered. Registrant on LIFO basis of accounting liquidates a substantial portion of its LIFO inventory and as a result includes a material amount of income in its income statement which would not have been recorded had the inventory liquidation not taken place.
Is disclosure required of the amount of income realized as a result of the inventory liquidation? Such disclosure would be required in order to make the financial statements not misleading. Disclosure may be made either in a footnote or parenthetically on the face of the income statement.
Bank subsidiaries of bank holding companies frequently hold substantial amounts of state and municipal bonds, interest income from which is exempt from Federal income taxes. Because of the tax exemption the stated yield on these securities is lower than the yield on securities with similar risk and maturity characteristics whose interest is subject to Federal tax.
When the data presented also includes income taxes, a corresponding amount is added to income tax expense so that there is no effect on net income.
Adjustment may also be made for the tax equivalent effect of exemption from state and local taxes. Is the concept of the tax equivalent adjustment appropriate for inclusion in financial statements and related notes? The tax equivalent adjustment represents a credit to interest income which is not actually earned and realized and a corresponding charge to taxes or other expense which will never be paid.
Consequently, it should not be reflected on the income statement or in notes to financial statements included in reports to shareholders or in a report or registration statement filed with the Commission.International Journal of Business and Social Science Vol.
20; November 12 Fair Value Accounting: Its Impacts on Financial Reporting and How It Can Be Enhanced. Fair Value Accounting and Reliability Recent research into fair value accounting and its effects on investor confidence sheds some light on this debate.
auditors, and regulators.
First, level 3 assets, whose fair values are subjectively determined by management, hurt companies’ market values in the form of larger share price discounts. 1 Estimating the fair value of the common stock issued, however, is not appropriate when the stock is closely held and/or seldom or ever traded..
2 The guidance in this SAB should also be considered for Company B’s separate financial statements included in its public offering following Company B’s spin-off or carve-out from Company A..
3 The guidance in this SAB should also be considered. Account: basic summary device of rutadeltambor.com account is the detailed record of all the changes that occurred in an individual asset, liability or equity during a time period.
Journal: chronological record of rutadeltambor.com transactions are first recorded. Accounting for Service Concession agreements (PPPs) Seminar on Accounting reforms in the Public Sector: IPSAS/EPSAS Brussels, May 13, Thomas Müller-Marqués Berger, EY Germany. 1 Instruction (6)(a) calls for description of the nature and impact of developments in countries experiencing liquidity problems which are expected to have a material impact on timely repayment of principal or interest.
Additionally, Instruction (6)(d)(ii) to Item III.C calls for disclosure of commitments to relend, or to maintain on deposit, arising in connection with certain.