SGeorgieva week 1

Topics: Generally Accepted Accounting Principles, Debt, Balance sheet Pages: 6 (996 words) Published: November 29, 2014


DeVry University
ACCT540
Week 1Assigment
Professor Dr. Uzell Freeman-Williams
Silviya Georgieva
November, 2014

(ASU) 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Under U.S GAAP going concern is a fundamental assumption and a basis of which financial statements are prepared. The update issued August 2014 entity should assess its ability to meet obligations and sets disclosure requirements for how this information should be disclosed in the financial statements. Under the update, management is required to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. Management should disclose uncertainties about such ability if there is “substantial doubt about an entity’s ability to continue as a going concern”. Substantial doubt is defined as a condition that exist when aggregate events indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). Management is also required to evaluate and disclose whether its plans alleviate that doubt. The update was necessary because there was no guidance in GAAP on management’s responsibility for evaluating and disclosing going concern uncertainties. Currently the assessment is performed by auditors under auditing standards. ASU 2014-15 is effective for annual periods ending after December 15, 2016 and for interim periods within annual periods beginning after December 15, 2016. ASU 2014-14, Receivables —Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure — a consensus of the FASB Emerging Issues Task Force This update refers to government-sponsored foreclosed mortgage loans. Under some government-sponsored programs such as those offered by FHA, HUD or VA, qualifying creditors can extend mortgage loans with a guarantee to recover all or a portion of the unpaid balance from the government if the borrower default. The purpose of this update is to reduce the diversity in how creditors classify those loans upon foreclosure. Some creditors account for the guarantee as a separate unit of account, while others do not. The update will require creditors to derecognize certain foreclosed government-guaranteed mortgage loans and to recognize a separate other receivable that is measured at the amount the creditor expects to recover from the guarantor, and to treat the guarantee and the receivable as a single unit of account. For public companies this update is effective annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For all other entities, the update is effective is effective for annual periods ending after December 15, 2015, and interim periods beginning after December 15, 2015.

 

ASU 2014-13 Consolidation (Topic 810), Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity (a consensus of the FASB Emerging Issues Task Force) This update applies to the measurement for consolidated collateralized financing entities (CFEs). It will allow an alternative fair value method for measuring the financial assets and financial liabilities of a CFE. The ASU would permit the parent company to measure both the financial assets and financial liabilities of a CFE the fair value of either the CFE’s financial assets or liabilities, whichever is more observable. The update is intent to eliminate the difference that sometimes arises when a CFE’s financial assets and...

References: FASB (2014) Presentation of Financial Statements—Going Concern (Subtopic 205-40) Retrieved from:
http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176164329772&acceptedDisclaimer=true
FASB (2014) Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40) Retrieved from:
http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176164282728&acceptedDisclaimer=true
FASB (2014) Consolidation (Topic 810) Retrieved from:http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176164268998&acceptedDisclaimer=true
FASB (2014) Compensation—Stock Compensation (Topic 718) Retrieved from:
http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176164147053&acceptedDisclaimer=true
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