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Intermediate Accounting 11th Canadian Edition Volume 2 By Donald E. Kieso-Test Bank

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Original price was: $25.00.Current price is: $14.97.

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Exam Bank For Intermediate Accounting 11th Canadian Edition Volume 2 By Donald E. Kieso

ISBN-10: 1119048540, ISBN-13: 978-1119048541




1. Comprehend the significance of non-monetary and current liabilities from a business viewpoint. Efficient management of cash flow is a crucial controlling element for most businesses. Utilizing supplier discounts for immediate payment is one practical measure companies can adopt. Managing expenses and associated accounts payable can enhance a business’s effectiveness, especially in times of economic decline.

2. Define responsibilities, differentiate financial responsibilities from other obligations, and ascertain how they are quantified. Obligations are characterized as existing responsibilities of an entity stemming from past transactions or occurrences that are settled through a transfer of economic resources in the future. They must be legally enforceable against the entity. Financial obligations are a subset of responsibilities encompassing contractual obligations to provide cash or other financial assets to another party, or to exchange financial instruments with another party under potentially unfavorable conditions. Financial obligations are initially acknowledged at fair value, subsequently either at amortized cost or fair value. ASPE does not stipulate the measurement of non-monetary obligations. However, unearned revenues are typically quantified at the fair value of the goods or services to be delivered in the future, while others are quantified at the best projection of the resources needed to meet the obligation. Under IFRS, non-monetary obligations except for unearned revenues are quantified at the best projection of the amount the entity would rationally pay at the statement of financial position date to satisfy the current obligation.

3. Characterize current responsibilities and recognize and manage common types of current obligations. Current responsibilities are duties due within one year from the statement of financial position date or within the lengthier operating cycle, if the cycle exceeds a year. IFRS also includes responsibilities held for trading and any obligation where deferring settlement beyond 12 months after the statement of financial position date is not unconditionally granted to the entity. Various types of current responsibilities exist, with accounts and notes payable, and payroll-related obligations being the most prevalent.

4. Identify and handle the primary employee-related responsibilities. Employee-related responsibilities encompass (1) deductions from payroll, (2) earned leave, and (3) profit-sharing and bonus pacts. Payroll deductions signify sums withheld from employees leading to an obligation to the government or another party. The employer’s matched contributions are also encompassed within this obligation. Earned leaves by employees are company liabilities that are acknowledged as employees accrue entitlement to them, provided they are reasonably measurable. Bonuses linked to earnings are accrued as an expense and liability as the earnings are realized.

5. Elaborate on the identification, quantification, and disclosure requirements for decommissioning and restoration obligations. A decommissioning, restoration, or asset retirement obligation (ARO) is an approximation of the expenses a company must incur upon retiring specific assets. It is recorded as a liability, predominantly long-term in nature. Under ASPE, solely legal commitments are acknowledged. They are quantified at the best approximation of the cost to settle them on the statement of financial position date, with the connected cost included in the property, plant, and equipment cost. Under IFRS, both legal and implied obligations are acknowledged. They are quantified at the amount the entity would logically pay to release itself from the obligation and are capitalized as part of PP&E or inventory, if associated with production activities. Over time, the liability is adjusted for the time value of money, and the asset costs are amortized as expenses. Entities reveal the nature of the obligation and measurement methodologies, with more comprehensive disclosures mandated under IFRS than ASPE.

6. Discuss the concerns and treatment of unearned revenues. When an entity receives advances or payments for multiple services earlier, unearned revenue is acknowledged to the extent the entity has not yet delivered. It is measured at the fair value of the forthcoming goods or services to be provided. In transactions where revenue is recognized and deemed earned while costs remain to be incurred, estimated liabilities and expenses are recognized at the best approximation, adhering to the matching principle.

7. Address the concerns and handling of product warranties and other customer program responsibilities. Historically, a cost-centric approach has been used to address the standing liability, although some modern standards have transitioned toward a revenue-oriented approach. According to the cost-centric approach, the outstanding liability is ascertained at the cost of the economic resources required to fulfill the responsibility. The assumption is that besides recognizing the mandatory liability at the reporting date, the associated expense must be quantified and aligned with the period’s revenues. Following the revenue approach, the outstanding responsibility is quantified at its value. Payments received for undelivered goods or services are initially regarded as unearned upon sale. Until the revenue is recognized, the liability is reported at sales or fair value. The liability diminishes as the revenue is realized.

8. Address and manage contingencies and uncertain commitments, while outlining the accounting and reporting requisites for assurances and commitments. Current standards mandate accruing a loss and recognizing a liability if (1) available information before issuing financial statements indicates probable (or more likely than not according to IFRS) liability incidence by the statement of financial position date, and (2) the loss magnitude is feasibly estimable (a rare occurrence under IFRS where an estimation is not achievable). A different approach expected in forthcoming standards formulated by the IASB is discussed in the chapter’s Outlook section. Generally, guarantees are treated akin to contingencies. Commitments or contractual duties typically do not culminate in liabilities on the statement of financial position date. Specific details about outstanding commitments are disclosed in the financial statement notes at the statement of financial position date.

9. Explain the presentation and analysis of non-financial and current liabilities. Current liability accounts are frequently displayed as the primary category in the liability section of the statement of financial position; however, under IFRS, a common method is presenting current assets and liabilities at the statement’s conclusion. Within the current liability section, accounts may be listed based on maturity or liquidation preference order. IFRS necessitates information about provisions along with reconciliations. Adequate details are provided to meet comprehensive disclosure requirements. Unrecognized loss contingencies information including their nature and possible loss estimates are presented in the financial statement notes. Significant year-end commitments in terms of size, risk, or duration are disclosed in the financial statement notes, with far more information desired under IFRS. Three prevalent liquidity analysis ratios are current ratio, quick ratio, and accounts payable turnover.

10. Recognize accounting distinctions between IFRS and ASPE and impending modifications. Private enterprise and international standards bear substantial similarity. Nevertheless, there exist certain classification discrepancies. ASPE does not encompass “provisions,” and distinctions exist concerning the recognition and measurement of decommissioning and restoration liabilities, cost capitalization, and the application criteria for contingencies’ probability and quantification. Furthermore, IFRS necessitates markedly increased disclosure. The IASB and FASB are proposing revisions to prevailing standards anticipated for application, at least partially, in the CICA Handbook, Part II hereafter. The primary alterations pertain to standards of recognition and measurement for non-financial liabilities.

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Intermediate Accounting 11th Canadian Edition Volume 2 By Donald E. Kieso-Test Bank
Intermediate Accounting 11th Canadian Edition Volume 2 By Donald E. Kieso-Test Bank

Original price was: $25.00.Current price is: $14.97.

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