Financial Accounting Standards Codification Research Assignment

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to get acces the financial accounting standards boars http://aaahq.org/ascLogin.cfm

Username: AAA52092

Password: v4G2AhM

Answer the following question above that I attached

Refer to attached for instructions on the assignment worth up to 2 extra credit points. Your version is listed on the attached excel file.

For most questions you can copy/paste the answer directly from the codification. Do not copy/paste from any other sources, such as the textbook or google search, as the objective of this project is to get you familiar with maneuvering through the codification reference materials.

Note that this is an individual assignment. It will be audited to ensure academic honesty.

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ACG4111 Intermediate Financial Accounting II Version 4 Financial Accounting Standards Codification Research Assignment This assignment is comprised of researching several of the more current technical topics in accounting and responding to several specific technical standard questions about the topics. You may be asked to interpret how the technical standard is applied or what the objective(s) of the related GAAP rules are attempting to address. Note that the FASC is now the one and only source of the technical GAAP standards; other sources are no longer accepted as GAAP. You can access the Financial Accounting Standards Board (FASB) Financial Accounting Standards Codification database at: http://aaahq.org/ascLogin.cfm. Type in the following: Username: AAA52092 Password: v4G2AhM Click on “FASB Accounting Standards Codification” and the database will open. The topics are found on the left side of the welcome page. Clicking on the topic will return the subtopics and contents. You can access each topic by either scrolling over the topics and subtopics until you find the related content or topic or by using the search box found in the top right of the screen. Submission: Electronic copies of this assignment should be attached to a Blackboard Message to your professor. I. FASB Accounting Standards Codification (FASC) This section deals with certain general background considerations and information related to the FASC and the answers can be found by clicking the “About the Codification” and “Notice to Constituents” sections on the FASC Welcome Page. This section is a good general source of information about the FASC and should be reviewed prior to starting to answer the specific questions set forth in all sections. The related research questions that you must answer are: (a) When did the FASC Codification become effective? (b) Did the FASC change prior GAAP? (c) What does the FASB expect from the new FASC structure and system? (d) What are the “topics” used in the ASC? (e) Are Securities and Exchange Commission (SEC) references included in the ASC? II. Topic-Specific Research You have been hired at an audit firm as a first year staff. This firm requires that all references to generally accepted accounting principles in the audit workpapers include the corresponding FASC citation (topic and subtopics). Below are three independent situations found at your clients that require research and documentation. For each question, (1) provide the citation number (topic and subtopic) that addresses the question and (2) answer the question. Document this under the question, indenting your answer. 1. Inventories Your client is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of your client’s inventory. Discuss the authoritative literature to determine the accounting for this significant market event. (a) Identify the primary authoritative guidance for the accounting for inventories. (b) List three types of goods that are classified as inventory. What characteristic will automatically exclude an item from being classified as inventory? (c) Define “market” as used in the phrase “lower-of-cost-or-market.” 2. Capitalized Interest Your client is in the planning phase for a major plant expansion, which will involve the construction of a new warehouse. The assistant controller does not believe that interest cost can be included in the cost of the warehouse, because it is a financing expense. Others on the client’s staff believe that some interest cost can be included in the cost of the warehouse, but no one could identify the specific authoritative guidance for this issue. (a) Is it permissible to capitalize interest into the cost of assets? Provide authoritative support for your answer. (b) What are the objectives for capitalizing interest? (c) Discuss which assets qualify for interest capitalization. (d) Is there a limit to the amount of interest that may be capitalized in a period? (e) If interest capitalization is allowed, what disclosures are required? 3. Leases Daniel Hardware Co. is considering alternative financing arrangements for equipment used in its warehouses. Besides purchasing the equipment outright, Daniel is also considering a lease. Accounting for the outright purchase is fairly straightforward, but because Daniel has not used equipment leases in the past, the accounting staff is less informed about the specific accounting rules for leases. The staff is aware of some lease rules related to a “90 percent of fair value,” “75 percent of useful life,” and “residual value deficiencies,” but they are unsure about the meanings of these terms in lease accounting. Daniel has asked you to conduct some research on these items related to lease capitalization criteria. (a) Identify the primary authoritative guidance that addresses the accounting for leases. (b) What is the objective of lease classification criteria? (c) An important element of evaluating leases is determining whether substantially all of the risks and rewards of ownership are transferred in the lease. How is “substantially all” defined in the authoritative literature? (d) Besides the noncancelable term of the lease, name at least three other considerations in determining the “lease term.”
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