Ac551
1. Identify the six topical areas where the some 90 topics are located.
1. The General Principles Area
2. The Presentation Area
3. The Assets, Liabilities, and Equity Area
4. The Revenue and Expenses Area
5. The Broad Transactions Area 6. The Industry Area 2. In the master glossary, determine if the FASB considers options as securities or cash. Explain your position. The FASB considers options as securities. This is evident by the definition provided by the master glossary that states “unless otherwise stated, a call option that gives the holder the right to purchase shares of common stock from the reporting entity in accordance with an agreement upon payment of a specified amount. Options include, but are not limited to, options granted to employees and stock purchase agreements entered into with employees.” Because of the criteria presented options are considered securities. 3. According to guidance in the Codification, how should one account for the direct and indirect costs of growing crops? In what Codification section did you find this information? According to the Codification, “all direct and indirect costs of growing crops shall be accumulated until the time of harvest. Some crop costs, such as soil preparation, are incurred before planting and shall be deferred and allocated to the growing crop.” This is found in section 905-330-25 (1). 4. What two methods are identified in the Codification as appropriate in accounting for long-term construction contracts? Where in the Codification did you find this information? According to the Codification, the two methods identified as appropriate in accounting for long-term construction contracts are the percentage-of-completion method and the completed-contract method. This is found in section 605-35-25
1. The General Principles Area
2. The Presentation Area
3. The Assets, Liabilities, and Equity Area
4. The Revenue and Expenses Area
5. The Broad Transactions Area 6. The Industry Area 2. In the master glossary, determine if the FASB considers options as securities or cash. Explain your position. The FASB considers options as securities. This is evident by the definition provided by the master glossary that states “unless otherwise stated, a call option that gives the holder the right to purchase shares of common stock from the reporting entity in accordance with an agreement upon payment of a specified amount. Options include, but are not limited to, options granted to employees and stock purchase agreements entered into with employees.” Because of the criteria presented options are considered securities. 3. According to guidance in the Codification, how should one account for the direct and indirect costs of growing crops? In what Codification section did you find this information? According to the Codification, “all direct and indirect costs of growing crops shall be accumulated until the time of harvest. Some crop costs, such as soil preparation, are incurred before planting and shall be deferred and allocated to the growing crop.” This is found in section 905-330-25 (1). 4. What two methods are identified in the Codification as appropriate in accounting for long-term construction contracts? Where in the Codification did you find this information? According to the Codification, the two methods identified as appropriate in accounting for long-term construction contracts are the percentage-of-completion method and the completed-contract method. This is found in section 605-35-25