I need to know where to find this answers in the FASB codification system. Just
ID: 2423452 • Letter: I
Question
I need to know where to find this answers in the FASB codification system. Just the answer without citation is not helping me
After graduating from BSU, you take a job at a start-up company, Flutie Enterprises. Your boss is unsure of what the standards state about which accounting policies your new company will have to disclose in their footnotes. Write a formal business memo to your boss, Doug Flutie, in good form. Include responses to the following questions. Be sure to provide codification references for your responses. a. Identify the literature that addresses the disclosure of accounting policies. b. How are accounting policies defined in the literature? c. What are the three scenarios that would result in detailed disclosure of the accounting methods used? d. What are some examples of common disclosures that are required under this statement? Pease provide citation from the FASB odification system
Explanation / Answer
Answer:a Disclosure of accounting policies shall identify and describe the accounting principles followed by the entity and the methods of applying those principles that materially affect the determination of financial position, cash flows, or results of operations. In general, the disclosure shall encompass important judgments as to appropriateness of principles relating to recognition of revenue and allocation of asset costs to current and future periods; in particular, it shall encompass those accounting principles and methods that involve any of the following:
a. A selection from existing acceptable alternatives
b. Principles and methods peculiar to the industry in which the entity operates, even if such principles and methods are predominantly followed in that industry
c. Unusual or innovative applications of GAAP.
Answer:b The accounting policies of an entity are the specific accounting principles and the methods of applying those principles that are judged by the management of the entity to be the most appropriate in the circumstances to present fairly financial position, cash flows, and results of operations in accordance with generally accepted accounting principles (GAAP) and that, accordingly, have been adopted for preparing the financial statements.
Answer:c Scenario 1
Disclosure shall be made in the income statement or a note thereto, of
(i) the components of income (loss) before income tax expense (benefit) as either domestic or foreign;
(ii) the components of income tax expense, including (A) taxes currently payable and (B) the net tax effects, as applicable, of timing differences (indicate separately the amount of the estimated tax effect of each of the various types of timing differences, such as depreciation, warranty costs, etc., where the amount of each such tax effect exceeds five percent of the amount computed by multiplying the income before tax by the applicable statutory Federal income tax rate; other diferences may be combined)
Scenario 2
If, as of the most recent balance sheet date, the amount at risk under repurchase agreements with any individual counterparty or group of related counterparties exceeds 10% of stockholders' equity (or in the case of investment companies, net asset value), disclose the name of each such counterparty or group of related counterparties, the amount at risk with each, and the weighted average maturity of the repurchase agreements with each. The amount at risk under repurchase agreements is defined as the excess of carrying amount (or market value, if higher than the carrying amount or if there is no carrying amount) of the securities or other assets sold under agreement to repurchase, including accrued interest plus any cash or other assets on deposit to secure the repurchase obligation, over the amount of the repurchase liability (adjusted for accrued interest). (Cash deposits in connection with repurchase agreements shall not be reported as unrestricted cash pursuant to rule 5–02.1.)
Scenario 3
For purposes of providing the Provide a reconciliation between the amount of reported total income tax expense (benefit) and the amount computed by multiplying the income (loss) before tax by the applicable statutory Federal income tax rate, showing the estimated dollar amount of each of the underlying causes for the difference, each reconciling item in excess of five percent should be disclosed. If no individual reconciling item amounts to more than five percent of the amount computed by multiplying the income before tax by the applicable statutory Federal income tax rate, and the total difference to be reconciled is less than five percent of such computed amount, no reconciliation need be provided unless it would be significant in appraising the trend of earnings. Reconciling items that are individually less than five percent of the computed amount may be aggregated in the reconciliation. The reconciliation may be presented in percentages rather than in dollar amounts. Where the reporting person is a foreign entity, the income tax rate in that person’s country of domicile should normally be used in making the above computation, but different rates should not be used for subsidiaries or other segments of a reporting entity.
2 the rate used by a reporting person is other than the United States Federal corporate income tax rate, the rate used and the basis for using such rate shall be disclosed.
Answer:4