2010—Pages 93–118 Did Fair-Value Accounting Contribute to the Financial Crisis? Christian Laux and Christian Leuz I n its pure form‚ fair-value accounting involves reporting assets and liabilities on the balance sheet at fair value and recognizing changes in fair value as gains and losses in the income statement. When market prices are used to determine fair value‚ fair-value accounting is also called mark-to-market accounting. Some critics argue that fair-value accounting exacerbated the
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Fin Aff 2013‚ 2:1 http://dx.doi.org/10.4172/2167-0234.1000108 Open Access A Fair Value and Hedge Activities Doan Van Dinh1* and Guangming Gong2 1 2 College of Economics and Trade Management of Hunan University‚ China and Faculty of Finance and Banking of the Industrial University of Ho Chi Minh City‚ Vietnam Business school Hunan University in China Abstract This article‚ author consider the fair value of financial instruments whether it is appropriate for economic development and the
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1. Sadie incorporates her sole proprietorship with assets having a fair market value of $80‚000 and an adjusted basis of $100‚000. Even though § 351 applies‚ Sadie may recognize her realized loss of $20‚000. F True False 2. For § 351 purposes‚ stock warrants are included in the definition of "stock." F True False 3. In order to retain the services of Paige‚ a key employee in Byron’s sole proprietorship‚ Byron contracts
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IFRS 13 Fair Value Measurement applies to IFRSs that require or permit fair value measurements or disclosures and provides a single IFRS framework for measuring fair value and requires disclosures about fair value measurement. The Standard defines fair value on the basis of an ’exit price’ notion and uses a ’fair value hierarchy’‚ which results in a market-based‚ rather than entity-specific‚ measurement. IFRS 13 was originally issued in May 2011 and applies to annual periods beginning on or after
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callable at 120 at any time on or after 12/31/2013. JP Corp uses effective interest rate method to calculate their interest expense each period. (12 points) Required: 1) Calculate the issue price of the bonds. Present value of face amount = $1‚000‚000*0.37689 = 376‚890 Present value of interest payments = $60‚000*12.46221 = 747‚733 Total price of bonds at issuance = 1‚124‚623 Face amount discount factor from PV of $1‚ n = 20‚ i = 5% Interest payment amounts = $1‚000‚000*12%*1/2 = $60
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Allfoods Corp. (Allfoods) acquired 80 percent of the outstanding common stock of Baked Beans Corp. in a business combination. After value consideration transferred value of tangible and intangible assets acquired‚ libilities assumed‚ I recommend doing this consolidation general entry for the business combination: Dr. | Land | $ 21‚000‚000 | | | | Dr. | PPE | $ 7‚000‚000 | | | | Dr. | IPR&D | $ 15‚000‚000 | | | | Dr. | Trademark | $ 3‚000‚000 | | | | Dr. | Goodwill
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cannot pay a note due that day. It is a $500‚000 note with $50‚000 accrued interest payable to Edsen‚ Inc. Edsen agrees to forgive the accrued interest‚ extend the maturity date to December 31‚ 2008‚ and reduce the interest rate to 4%. The present value of the restructured cash flows is $428‚000. Instructions Prepare entries for the following: (a) The restructure on Poore’s books. (5 points) (b) The payment of interest on December 31‚ 2007. (5 points) (c) The restructure on Edsen’s books
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a. 150‚000 b. 100‚000 c. 550‚000 d. 240‚000 6. Where there is a production cycle of more than one for a biological asset‚ PAS 41 encourages separate disclosure of a. Physical change only b. Price change only c. Total change in value d. Physical change and price change 7. Financial accounting is the area of accounting that emphasizes reporting to a. Management b. Regulatory bodies c. Internal auditors d. Creditors and investors 8. An investor purchased a bond as
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Chapter 16 codification assignment 1. Identify what authoritative literature addresses accounting for stock compensation plans. What are the objectives for the accounting for share based compensation? 718-10-10-1 The objective of accounting for transactions under share-based payment arrangements with employees is to recognize in the financial statements the employee services received in exchange for equity instruments issued or liabilities incurred and the related cost to the entity as
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argue for your moral position (Justification essay) and that you demonstrate clear and consistent reasoning as well as critical thinking skills. In making good moral judgment‚ you must argue for your position (the Discovery essay) using a normative ethical theory (the Justification essay). The key to recognizing an ethical issue is to be able to conceptualize the moral problem correctly in the first place and this is what our Moral Reasoning Strategy attempts to help you do; it is a template which
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