1. Bond sinking funds are accounted for in their own account including investments + revenues expenses a.

. Balance + investment + div/int revenue admin costs 2. Covertible debt a. Interest rate on convertible debt is generally lower than nonconvertible debt because of the value of the conversion feature b. Conversion price generally greater than the MV of the CS at the time of issurance 3. Discount on a bond or note is amortized, discount increases interest expense for the period 4. Serial bonds mmature in installments a. Term single fixed maturity date 5. When bonds are issued with detachable warrants, a. The purchase price must be allocated between the bonds and the warrants b. If only fv of warrants is known, the fv is allocated to APIC-warrants and the remaing purchase price is allocated to the bonds 6. US GAAP book value method convertible debt a. No value is assigned to the conversion feature when convertible debt is issued 7. US GAAP all costs associated with issuance of bonds should be capitalized and amortized over the outstanding term of the bonds since issue F7: pensions Service cost represents the increase in PBO due to services rendered during the year Footnote disclosures in the pension f/s o Disclosure showing a detailed description of the plan including employee groups covered is require Different b/w PBO and accumulated benefit obligations o PBO (assumption of future compensation levels) o ABO (past & current compensation levels) Service costs do not affect AOCI o OCI reflects changes in funded status of pension plan due to PSC Net g & l Net transition asset or obligations Deferred taxes must be considered when recording net periodic pension cost and changes in pension plan funded status due to PSC, net g&l, and net transition assets and obligations IFRS PSC recognized in I/S not OCI. Not amortized Funded status = FVofPA PBO IFRS

o Remeasurements of the defined benefit liabilitity (asset) including remeasurements from actuarial gains Reported in OCI Are not reclassified (amortized) to the I/S o Actuarial gain Reported in OCI o PSC I/S IFRS o No retroactive adjs made when a plan amendment is made o Past service cost is recognized on the I/S in the period of the plan amendment No amortization required since all recognized in I/S Pension plan investment assets must be reported at FV in a defined benefit plans f/s An employers obligation for post retirement health benefits that are expected to be provided to or an employee must be full accrued by the date the: o Employee is fully eligible for benefits o Expected post retirement health benefits must be fully accrued by the date the employee is fully eligible for the benefits o The accrual will begin when the employee is hired through the eligibility (vesting) date Attribution pd o Period of an employees service to which the expected postretirement benefit obligation for that employee is assigned o Beginning: usually employees date of hire (when begin to grant credit) o End: when full eligibility is granted Per capita claims unique to postretirement health-care benefits Vacation pay is accrued if it vests or accumulated o Sick pay is accrued only if it vests Employees compensation for future absences should be accrued if o Services are already rendered and o The amt can be reasonably estimated and o The obligation relates to vested or accumulated rights and o Payment of the compensation is probable A&L/(B/S) approach o USGAAP approach to det income tax expense USGAAP o DTL/DTA classified on b/s based on classification of the related asset o Differences because of depreciation = noncurrent DTL/DTA Taxable income X Tax rate = current income tax expense

Premium on officers life insurance (when the co is the beneficiary) = permanent difference The tax benefit of the loss from discontinued operations carried forward did not affect the G or L from discontinued segments o Tax benefit of the loss carried forward reduces crrent taxes payable from Y2 continuing operations Changes in depreciation method handle prospectively o No immediate reversal of the asset account would be recorded IFRS o All DTA and DTL are reported as noncurrent on the b/s No deferred taxes for permanent differences o Types and amounts of existing permanent differences do not have to be disclosed o Types and amounts of temporary differences and the nature and type of operating loss and tax credit carryforwards should be disclosed Organizational expenses o f/s - Immediately expense o tax amortize over multiple years premiums on key man life insurance for CEO o permanent difference o no financial statement presentation Remember: o Net noncurrent as 1 sum o Net current as 1 sum Cost method: o Resale of TS at price > acquisition price RE are not affected Gain goes into Credit APIC-Ts Loss Debit APIC TS Debit RE for remaining amt No entry is made when rights to purchase cs are issued if no consideration is given o CS or APIC not increased when rights are issued (if no consideration is given) o If the rights are exercised and stock is issued, the CS and additional PIC increase o CS account will increase, by par value of stock issued, only when stock is issued upon exercise of the rights o APIC will increase by the difference of the purchase price and the par value, only when the stock is issued upon exercise of the rights

When a company declares a cash dividend, RE is decreased by the amt of the dividend on the date of declaration by the board of directors There is no gain or loss on the purchase and/or sale of TS. Any difference goes to APICTS, or if there is not enough PIC to absorb a loss, the loss would be debited (subtracted) from RE Quasi-reorganization o Eliminate a RE deficit so that future earnings will be available for dividends rather than limited to offsetting the RE deficit Liquidating dividend o Total cash dividend declared RE o Amount in excess of RE balance Compensation cost o Should be charged to expense over the service period Exercise of stock rights has no effect on income o Portion of proceeds in excess of stocks par value Credited to APIC at the time the rights are exercised Property dividend o Recorded in RE at the propertys market value at the date of declaration Cumulative preferred stock dividends are paid on par value (not sales price) of preferred stock and have a preference over CS dividends until all past preferred stock dividends are paid When the purpose of the appropriation of RE has been achieved, it should be restored to unappropriated RE Common and preferred stock are recorded at o the number of shares issued X (stated or par vlue) o Any excess is PIC Stock options outstanding o Reduced at exercise date o Increased at date of grant NI or RE will never be increased through TS transactions No G/L recognized on I/S for TS transactions Date of grant o Used by corps to measure the cost of employee services in exchange for an award of equity interests, based on the FMV of the award When calculating basic EPS o Include: contingent shares that are dilutive (on EPS) and meet condition for issuance o Dont include: stock options Each potentially dilutive security o Considered separately for its dilutive effect

ThE measurement focus of governmental-type fund is on the determination of o Current financial position o Financial position B/S shows available resources and current obligations Sources, uses and balances of financial resources Fund resources are segreagated for the purpose of carrying out specific activities (water and sewer operations) or attaining certain objectives (providing drinking water) Proprietary funds ^ Fiduciary o Focus Income determination Capital maintenance Measurement of CF and balances Derived (non-exchange) tax revenues o Taxes on or derived from exchange transactions such as commercial sales (sales taxes,property taxes) Imposed non-exchange revnues o Taxes imposed on non-exchange transactions or wealth o Ex: fines or property taxes Encumbrance o Issuing of a purchase order (commitment to purchase) Appropriation o Adjusted upon the adoption or amended of the budget and are closed at end of year Expenditure o Adjusted when obligations are incurred or paid and when accounts are closed at end of a fiscal period Lease payment is used to compute the PV of the liability, not including executor costs, such as taxes o Executory costs Expensed when paid o Taxes Expensed when paid GASB 34 o Budgetary comparisons are mandated for General and Special Revenue Funds with legally adopted budget, NOT all governmental funds Schedules should present both the Original & amended budgets OPTIONAL: Presentation of variances of the amended budget to the actual results & presentation of the variance of the original budget to the final amended budget When preparing interim f/s, income tax expense is estimated each quarter using the effective TR expected to apply to the entire year

Costs NOT classified as R&D o Since not R&D, do not expense Legal fees (should be capitalized) Engineering follow-up & marketing research not R&D Amortization of leasehold improvements o Amortize over SHORTER of the life of the improvements OR the remaining life of the lease Annual sinking-fund requirement on the guaranteed debentures is $4,000 o What amount should be reported as current maturities of long-term debt in its December 31, b/s? The $4,000 sinking-fund requirement would be disclosed in a footnote but is NOT disclosed as a current maturity of long-term debt Under the modified approach o Infrastructure expenditures are reported as expenses except for outlays that result in additions or improvements, which would be capitalized/