ACC 4100 Study Guide - Comprehensive Final Exam Guide - Financial Statement, Accounting, Equity Method
20 Nov 2018
School
Department
Course
Professor
Document Summary
Fv method: dividends, how does this affect basis of inv, bankruptcy no div promise to pay in future, periodic assessment for impairment, fv less than carrying value, report write-off/ loss. Cost method for equity securities: customer lists, how do you measure this, sometimes you may not have real determinable values. One set of financials roll everything up make decisions quickly now subs quickly disseminate info. Spe: misuse off b/s financing (s/b rolled up in books wouldn"t be disclosed or reported. Can you assume/ foresee influence (majority influence) Reduce asset (not booked as income: cannot double count, reduce basis on balance sheet. Criteria for utilizing the equity method: investee"s board of directors, meeting minutes (if you don"t have a say/ not @ meeting may not have influence, material intra-entity transactions (amongst themselves) Measurements of financial performance often affect the following: the firms ability to raise capital, managerial compensation, the ability to meet debt covenants, future interest rates managers.
