Question

In: Finance

Give an example of each codification and explain why do you think it was created. Include...

Give an example of each codification and explain why do you think it was created. Include the codification in your answer. Your answer should be a minimum of one paragraph each.

  1. ASC 830-230-55-1
  2. ASC 926-330-35-1
  3. ASC 954-440-25-2
  4. ASC 505-20-50-1
  5. ASC 710-10-05-6

Solutions

Expert Solution

a) ASC 830-230-55-1:
This reference shows how to account and format cash flows when a company has subsidiaries operating in foreign countries. Examples are given of a consolidated cash flow statement from a US based company and its two subsidiary companies. The reference explains how excess cash should be disclosed. A majority of the reference deals with the local currency and how it should be shown within the parent company, which in this case a US company based on the dollar therefore both foreign companies would need to be formatted with both local and US.

b) ASC 926-330-35-1:
This code references the ninth area of the Codification: Industry. 926 is the Entertainment-Films industry. 330 explains the Inventory in the film industry and how it is to be recorded. Such inventories can be “videocassettes and video discs” (asc.fasb.org,). -35 is the subtopic that discusses how the entity will recognize a subsequent item such as “impairment, credit losses, fair value adjustment, depreciation and amortization” (asc.fasb.org). The -1 further illustrates that that the entity will record the inventory at “net realizable value” (asc.fasb.org) on the balance sheet.

c) ASC 954-440-25-2:
This references how a continuing care facility may attain losses when calculating their cost to its clients. These care facilities are required to show annual their future facility and service cost. They do this to see if there will be any liability that needs to be recognized.

d) ASC 505-20-50-1:
This references how stock dividends should be described to the public and the corporation should try to by all means not to describe it as a stock split. An example is given of how a corporation, because of a legal requirement, may be able to describe it.

e) ASC 710-10-05-6: P

Provides information about deferred compensation arrangements from an employment contract, this contract are between the employer and employee. This code includes examples of deferred compensation related to a Rabbi Trust for employees. A Rabbi Trust is a non-qualified deferred compensation arrangement, the funds on this trust are held for the benefit of the employee for retirement purpose. In addition, the trust could be setup, establish and settled in different ways, such as cash, share of stock and diversifies assets. Code 710 is for Compensation - General, 10 is Overall and 05 is for Overview and Background.


Related Solutions

Give an example of a monopoly. Explain why you think it is bad and/or good for...
Give an example of a monopoly. Explain why you think it is bad and/or good for the consumers.
give an example of both an excitatory and an inhibitory neurotransmitter . explain why you think...
give an example of both an excitatory and an inhibitory neurotransmitter . explain why you think it is necessary to have inhibitory transmitters.
From a management perspective, why do you think budgets are important and give an example, that...
From a management perspective, why do you think budgets are important and give an example, that relates specifically to your major (business administration) of how you will use budgets in your field.
Why do firms do not include interest expense in the calculation of RNOA? Give an example.
Why do firms do not include interest expense in the calculation of RNOA? Give an example.
Using the FASB Codification System as your reference, why do you think there are different ways...
Using the FASB Codification System as your reference, why do you think there are different ways to report investments in other companies? Do you consider it necessary? What role does ethics play in financial reports?
Using the FASB Codification System as your reference, why do you think there are so many...
Using the FASB Codification System as your reference, why do you think there are so many ways to report investments in other companies? Do you think they are all needed? What role does ethics play in financial reporting?
From a management perspective why do you think budgets are so important AND give an example,...
From a management perspective why do you think budgets are so important AND give an example, that relates specifically to your major, of how you will use budgets in your field. Do not forget APA format on your sources and in-text citations.
Give an example of each of the following. Be clear or explain why it is an...
Give an example of each of the following. Be clear or explain why it is an example. - Convection - Conduction - Radiation In addition, explain how the first and second of law thermodynamics are different
Why do you think present value is important when evaluating capital investments? Give an example of...
Why do you think present value is important when evaluating capital investments? Give an example of how you could use present value to make a decision in your current job.
Why do you think present value is important when evaluating capital investments? Give an example of...
Why do you think present value is important when evaluating capital investments? Give an example of how you could use present value to make a decision in your current job. Do not forget to use APA format on your sources and in-text citations.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT