Wiley GAAP 2018 part3

Description

ch51 51: ASC 808 Collaborative Arrangements Perspective and Issues Subtopic Scope Endeavor Timing of determination or redetermination Joint operating activities Active involvement Significant risks and rewards Overview Definitions of Terms Concepts, Rules, and Examples Collaborative Arrangements-Presentation Accounting for transactions with unrelated third parties Example of a collaborative arrangement ch52 52: ASC 810 Consolidations Perspective and Issues Technical Alerts ASU 2016-17 Guidance Effective dates Transition Subtopics Scope and Scope Exceptions Applying the scope guidance General scope exceptions Variable interest entities within scope Variable interest entities scope exceptions Alternative approach for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity ASC 810-30, Research and Development Arrangements Overview Definitions of Terms Consolidation Models-Introduction and Background The Vie Model Does a VIE Scope Exception Apply? Does the Reporting Entity Have a Variable Interest in the Entity? Is the Reporting Entity a VIE? Analyzing an entity's design Example of expected variability of cash flows Initial determination of VIE status Is the Reporting Entity the Primary Beneficiary? How to determine if an interest holder is the primary beneficiary Related-party considerations in determining the primary beneficiary Related-party tie breaker Sufficiency of equity investment at risk Example of application of ASC 810 to related-party leases Analysis under ASC 810 Other lease terms and provisions Variable interests in ``silos.´´ Measurement Initial measurement with common control Initial measurement absent common control Example of consolidation of a VIE— consolidation worksheet and journal entries Example of an implicit variable interest Example: Arm’s-length leases—computing expected losses and expected residual returns Reconsideration of VIE status Voting Interest Model Protective rights Substantive participating rights Kick-Out Rights For limited partnerships Deconsolidation of a Subsidiary Changes not affecting control Changes resulting in loss of control ASC 810-30, Research and Development Arrangements Sponsored research and development activities Other Sources ch53 53: ASC 815 Derivatives And Hedging Perspective and Issues Subtopics Scope Overview Objectives of ASC 815-basic principles Definitions of Terms Concepts, Rules, and Examples ASC 815-10, Derivatives and Hedging, Overall Financial Instruments Derivative Financial Instruments Examples of derivatives Managing risk Not-for-profit entities Subsequent measurement Private company alternative All other entities Certain contracts on debt and equity securities Derecognition Presentation and disclosure ASC 815-15, Embedded Derivatives Recognition Example of embedded instruments which are separately accounted for Example of embedded instruments which are not separately accounted for Measurement ASC 815-20, Hedging-General Overview Hedges-designation and documentation Hedging criteria applicable to fair value hedges only Hedging criteria applicable to a cash flow hedge only Summary of Accounting for Hedges Discontinuing Hedge Accounting ASC 815-25, Fair Value Hedges Example—gains and losses on fair value hedges Measuring the effectiveness of fair value hedges Discontinuance of a fair value hedge Ineffectiveness of a fair value hedge Impairment considerations for hedging and hedged items Example of applying fair value measurements in times of market inactivity or stress ASC 815-30, Cash Flow Hedges Effectiveness of cash flow hedges-hedge with an interest rate swap Example of using options to hedge future purchase of inventory Discontinuance of a cash flow hedge Ineffectiveness of a cash flow hedge Impairment of a cash flow hedge Expanded application of interest rate hedging Reclassifications to earnings Example of a “plain vanilla” interest rate swap Example of an option on an interest rate swap Foreign Currency Hedges Foreign Currency Hedging Measuring hedge effectiveness Example of hedge effectiveness measurement Forward Exchange Contracts Example of a forward exchange contract Foreign currency net investment hedge Example of a foreign currency net investment hedge Foreign currency unrecognized firm commitment hedge Foreign currency available-for-sale security hedge Foreign currency-denominated forecasted transaction Using certain intercompany derivatives as hedging instruments in cash flow hedges of foreign currency risk in the consolidated financial statements Other guidance on accounting for financial instruments Organizations That Do Not Report Earnings ASC 815-40, Contracts in Entity's Own Equity Accounting for contracts held or issued by the reporting entity that are indexed to its own stock Freestanding derivatives indexed to, and potentially settled in, stock of a consolidated subsidiary ASC 815-45, Weather Derivatives Other Guidance Structured notes ch54 54: ASC 820 Fair Value Measurements Perspective and Issues Subtopic Scope and Scope Exceptions Scope Overview ASC 820, Fair Value Measurement Definitions of Terms Concepts, Rules, and Examples The Mixed Attribute Model Definition Measurement Principles and Methodologies Item identification and unit of account Principal or most advantageous market and market participants Measurement considerations when markets become illiquid or less liquid Determining whether there has been a significant decrease in level of activity Selection of the valuation premise for asset measurements Strategic buyers and financial buyers The combination valuation premise Risk assumptions when valuing a liability The hypothetical transaction and operational difficulties experienced in practice Liabilities with inseparable third-party credit enhancements Measurement Inputs Valuation approaches Income approach Measurement considerations Fair Value Disclosures ch55 55: ASC 825 Financial Instruments Perspective and Issues Subtopics Scope and Scope Exceptions ASC 825-10 ASC 825-20 Overview Definitions of Terms Concepts, Rules, and Examples ASC 825-10, Overall Fair value option-flexibility of application Timing of the election Financial Statement Presentation and Disclosure ASC 825-20 ch56 56: ASC 830 Foreign Currency Matters Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Determining the functional currency Translation When Foreign Entity Maintains Financial Records in Its Functional Currency Current rate method Translation When a Foreign Entity Maintains Financial Records in a Currency Other Than Its Functional Currency Remeasurement method Examples Example of the current rate method Example of the remeasurement method Cessation of highly inflationary condition Applying ASC 740 to foreign entity financials restated for general price levels Application of ASC 830 to an investment to be disposed of that is evaluated for impairment Foreign Operations in the United States Translation of Foreign Currency Transactions Example of foreign currency transaction translation Intercompany Transactions and Elimination of Intercompany Profits Example of intercompany transactions involving foreign exchange Accounts to Be Remeasured Using Historical Exchange Rates ch57 57: ASC 835 Interest Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples ASC 835-20, Capitalization of Interest Interest cost Capitalization interest rate Capitalizable base Example of accounting for capitalized interest costs Determining the time period for interest capitalization Capitalization of interest costs incurred on tax-exempt borrowings Assets acquired with gifts or grants Summary of interest capitalization requirements ASC 835-30, Imputation of Interest Receivables Note issued solely for cash Note issued for cash and rights or privileges Example of accounting for a note issued for both cash and a contractual right Note issued in exchange for property, goods, or services Example of accounting for a note exchanged for goods Example of accounting for a note exchanged for property Example of accounting for a note exchanged to property Notes and bonds Summary-ASC 835-30 Notes issued solely for cash Example of bonds issued for cash Notes issued for cash and a right or privilege Example of accounting for a note issued for both cash and a contractual right Redeemable instruments Sales of future revenue Effective Interest Method Example of applying the effective interest method Example of note issued between payment dates Debt Issuance Costs Consistency ch58 58: ASC 840 Leases Perspective and Issues Technical Alert Subtopics Scope and Scope Exceptions Overview Variable interest entities Definitions of Terms Concepts, Rules, and Examples Variable Interest Entities Lease or Sale-The Interplay of Lease and Revenue Recognition Accounting ASC 840-10-35: Determining whether an arrangement contains a lease Sales with a guaranteed minimum resale value Equipment sold and subsequently repurchased subject to an operating lease Lessee Classification Lessor Classification Distinctions among sales-type, direct financing, and leveraged leases Lessee Accounting Operating leases Capital leases Example of accounting for a capital lease— asset returned to lessor Example of accounting for a capital lease— asset ownership transferred to lessee Lessor Accounting Operating leases Sales-type leases Example of accounting for a sales-type lease Direct financing leases Example of accounting for a direct financing lease Leveraged leases Example of simplified leveraged lease Real Estate Leases Leases involving only land Leases involving land and building Example of lessee accounting for land and building lease containing transfer of title Example of lessee accounting for land and building lease without transfer of title or bargain purchase option Leases involving real estate and equipment Leases involving only part of a building Operating leases with guarantees Lessee-incurred real estate development or construction costs Sale-Leaseback Transactions Retention of rights to use the property Sale-leaseback involving real estate Example of accounting for a sale-leaseback transaction Other Lease Issues Accounting for a sublease Example of a direct-financing sublease Lease escalations Example 1 Example 2 Lessee Involvement in Asset Construction Construction period rent associated with land and building leases Transfer of construction period risks Change in Residual Value Example of a permanent decline in residual value Change in the Provisions of a Lease Early Termination of a Lease Lessee accounting Lessor accounting Example of lessor accounting for the early termination of a sales-type lease Renewal or Extension of an Existing Lease Example of lessor accounting for extension of a sales-type lease Leases Between Related Parties Indemnification Provisions in Lease Agreements Accounting for Leases in a Business Combination Accounting for Changes in Lease Agreements Resulting from Refunding of Tax-exempt Debt Sale or Assignment to Third Parties; Nonrecourse Financing Money-over-Money Lease Transactions Wrap-lease Transactions Transfers of Residual Value (ASC 860) Example of the transfer of residual value Leases Involving Government Units Maintenance Deposits by Lessees Leasehold Improvements Example Statement of Financial Position Classification ch59 59: ASC 842 Leases Fasb Issues New Standard for Lease Accounting Technical Alert Overview-Putting It on the Balance Sheet Lessors Lessees Scope Effective Dates Key Terms in the Standard Transition Practical expedients Significant Changes from Current U.S. GAAP Implementation Considerations ch60 60: ASC 845 Nonmonetary Transactions Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Types of Nonmonetary Transactions General Rule Modification of the Basic Principle Commercial Substance Recognition of gains or losses Nonreciprocal Transfers Example of accounting for a nonreciprocal transfer with a nonowner Example of an exchange involving no boot Nonmonetary Exchanges That Include Monetary Consideration (Boot) Example of an exchange involving no commercial substance and boot Exchanges of Real Estate Involving Monetary Consideration (Boot) Inventory Purchases and Sales with the Same Counterparty Determining whether transactions constitute a single exchange Measurement of the exchange Example of counterparty inventory transfers Exchange of Product or Property Held for Sale for Productive Assets Barter Transactions Exchanges of a Nonfinancial Asset for a Noncontrollng Ownership Interest Deferred Income Taxes Summary ch61 61: ASC 850 Related-Party Disclosures Perspective and Issues Subtopic Scope Definitions of Terms Concepts, Rules, and Examples Disclosures ch62 62: ASC 852 Reorganizations Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Corporate Bankruptcy and Reorganizations Entities operating under and emerging from protection of the bankruptcy laws Quasi-Reorganizations ch63 63: ASC 853 Service Concession Arrangements Perspective and Issues Subtopic Scope Scope exception Overview Definitions of Terms Concepts, Rules, and Examples Accounting for Service Concession Arrangements Service concession arrangements Economic substance ch64 64: ASC 855 Subsequent Events Perspective and Issues Subtopic Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Types of Subsequent Events Presentation and disclosure ch65 65: ASC 860 Transfers and Servicing Perspective and Issues Subtopics Scope and Scope Exceptions Overview Definitions of Terms Concepts, Rules, and Examples Transfers of Financial Assets under ASC 860-Introduction Conditions for a sale of a financial asset Maintaining effective control Meaning of ``participating interest.´´ Accounting for transfers Measuring assets and liabilities after completion of a transfer Transfers of receivables with recourse Example of accounting for the transfer of receivables with recourse Retained interests Example: Sale of partial interest in receivables Examples: Sale of loans with various types of retained interests Servicing Assets and Liabilities The nature of servicing Accounting for servicing Example: Sale of receivables with servicing asset retained by transferor Example: Sale of receivables with servicing liability retained by transferor Examples: Sale of receivables with servicing asset retained Example of rights to future income from serviced assets Changes resulting in transferor regaining control of financial assets sold Sales-type and direct financing lease receivables Example of sale of interest in lease payments Securitizations Example of a securitization deal involving four classes of securities Example of revolving period securitizations Repurchase agreements Example of a repurchase agreement Securities lending transactions Example: Securities lending transaction (30 days) Accounting for collateral Example of accounting for collateral ch66 66: ASC 900S Specialized Industry Gaap Contractors-Federal Government (ASC 912) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Renegotiation Terminated Defense Contracts Entertaintment-Broadcasters (ASC 920) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Accounting for License Agreements Amortizing Capitalized Costs Example of accounting for program license agreements Accounting for Network Affiliation Agreements Accounting for Barter Transactions Reporting and Disclosure Entertainment-Cable Television (ASC 922) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Accounting During the Prematurity Period Amortization Amortizable life for portions built at different times Installation revenues and costs Franchise application costs Impairment Entertainment-Casinos (ASC 924) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Entertainment-Film (ASC 926) Perspective and Issues Overview Definitions of Terms Concepts, Rules, and Examples Revenue Recognition Persuasive evidence of an arrangement Delivery Commencement of exploitation Fixed or determinable arrangement fee Returns and price concessions Barter revenue Modifications of arrangements Example Product licensing Present value Costs and Expenses-Components Film costs Participation costs Exploitation costs Manufacturing costs Costs and Expenses-Amortization of Film Costs and Accrual of Participation Costs Ultimate revenue Ultimate participation costs Example of individual film forecast computation method Valuation of Unamortized Film Costs Subsequent events Entertainment-Music (ASC 928) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Accounting by Licensors Revenues Example Cost of artist compensation Cost to produce masters Accounting by Licensees Extractive Activities-Oil and Gas (ASC 932) Perspective and Issues Concepts, Rules, and Examples Financial Services-Depository and Lending (ASC 942) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Bad-Debt Reserves Accounting by Creditors for Impairment of a Loan Accounting for Loans Acquired by Transfer Conforming Practice by All Financial Institutions Servicing Assets and Liabilities Cash Flow Statement Other Accounting Guidance Financial Services-Insurance (ASC 944) Perspective and Issues Concepts, Rules, and Examples Premium Income Claim Cost Recognition Deferred Income Taxes Other Matters Financial guarantee insurance Reinsurance Loss reserves Guaranty funds Surplus notes Deposit accounting Demutualizations Nontraditional Long-Duration Contracts Costs Associated with Acquiring or Renewing Insurance Contracts Deferred Acquisition Costs for Insurance Contract Modifications or Exchanges Other Accounting Guidance Financial Services-Investment Companies (ASC 946) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Accounting Policies Accounting for High-Yield Debt Securities Exemptions from the Requirement to Provide a Statement of Cash Flows Taxes Commodity Pools Other Accounting Guidance Financial Services-Mortgage Banking (ASC 948) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Mortgage Banking Activities Mortgage loans Mortgage-backed securities Repurchase agreements Servicing Mortgage Loans Servicing fees Repurchase Financing Sales to Affiliated Entities Issuance of GNMA Securities Loan and Commitment Fees and Costs Loan origination fees received Services rendered Commitment fees paid to investors on loans held for sale Expired commitments or early repayment of loans Reporting Financial Services-Title Plant (ASC 950) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Acquisition Costs Operating Costs Reporting Title Plant Sales Franchisors (ASC 952) Perspective and Issues Technical Alert Overview Definitions of Terms Concepts and Rules Franchise Sales Example of initial franchise fee revenue recognition Area Franchise Sales Example of revenue recognition for area franchise sales Other Relationships Continuing Franchise and Other Fees Costs Repossessed Franchises Business Combinations Not-For-Profit Entities (ASC 958) Perspective and Issues Technical Alert Guidance Effective Date Scope Transition Overview Definitions of Terms Concepts, Rules, and Examples The Reporting Entity Complete Set of Financial Statements Net Assets and Changes in Net Assets Reporting Revenues Reporting Expenses Transfers Received as an Agent, Trustee, or Intermediary Investments and Endowment Funds Collections Split-Interest Agreements Mergers and Acquisitions Plan Accounting (ASC 960, ASC 962, ASC 965) Perspective and Issues Technical Alert Guidance Effective Dates Transition Definitions of Terms Accumulated Plan Benefits Benefits Health and Welfare Benefit Plan Liquidation Net Assets Noncontributary Plan Concepts, Rules, and Examples Complete Set of Financial Statements Statement of Net Assets Available for Benefits Statement of Changes in Net Assets Available for Benefits Transactions with Related Parties (ASC 850) Risks and Uncertainties Defined Benefit Plans Defined Contribution Plans Employee Health and Welfare Benefit Plans Government Regulations Terminating Plans Real Estate-General (ASC 970) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Preacquisition Costs Taxes and Insurance Project Costs Amenities Incidental Operations Allocation of Costs Revisions of Estimates Abandonment and Change in Use Selling Costs Rental Costs Impairment and Recoverability Real estate special assessments Other Guidance to Accounting for Real Estate Operations Real Estate-Retail Land (ASC 976) Perspective and Issues Definitions of Terms Concepts, Rules, and Examples Real Estate Sales-Land Sales ASC 976 scope Profit recognition methods Consummation of a sale Adequacy of the buyer's initial investment Computation of sales value Composition of the initial investment Size of initial investment Example of determining adequacy of initial investment Adequacy of the buyer's continuing investments Continuing investment not qualifying Release provisions Seller's receivable subject to future subordination Seller's continuing involvement Leases involving real estate Profit-sharing, financing, and leasing arrangements Options to purchase real estate property Partial sales of property Buy-sell agreements Selection of method Methods of Accounting for Real Estate Sales Other than Retail Land Sales Full accrual method Installment method Example of the installment method Cost recovery method Example of the cost recovery method Deposit method Example of a deposit transaction Reduced profit method Example of the reduced profit method Profit Recognition on Retail Land Sales Full accrual method Percentage-of-completion method Installment method Deposit method Real Estate Time-Sharing Activities (ASC 978) Perspective and Issues Overview Definitions of Terms Concepts, Rules, and Examples Accounting for time-share transactions Profit recognition Effect of sales incentives Reload transactions Uncollectibles Cost of sales Costs charged to current period expense Incidental operations VIEs and other complex structures Continuing involvement by seller or related entities Regulated Operations (ASC 980) Perspective and Issues Concepts, Rules, and Examples Asset Recognition Imposition of Liabilities Abandonment Accounting for Liabilities Related to Asset Retirement Obligations Accounting for Asset Impairments Accounting for Deregulation and ``Stranded Costs´´ Other Accounting Guidance Software (ASC 985) Perspective and Issues Overview Definitions of Terms Concepts, Rules, and Examples Costs of Software Developed Internally for Sale or Lease Example of amortization of capitalized computer software development costs Software Revenue Recognition Licensing vs. sales Product may not equate with delivery of software Delivery is the key threshold issue for revenue recognition Revenue must be allocated to all elements of the sales arrangement, with recognition dependent upon meeting the criteria on an element-by-element basis Fair values for revenue allocation purposes must be vendor specific The earnings process is not complete if fees are subject to forfeiture Exclusions Operational Rules Established by ASC 985-605 Other Accounting Guidance app1 Appendix A: Definitions of Terms app2 Appendix B: Disclosure and Presentation Checklist for Commercial Businesses index Index