Table of Contents

 

Chapter 1 - ASU 2017-01: Business Combinations (Topic 805) - Clarifying the Definition of a Business - Section 1. 11

I. Objective of ASU 2017-01. 11

II. Background. 11

III. Rules in ASU 21017-01. 15

Definitions. 15

General 16

What Is a Business?. 17

IV. Steps to Determine Whether There Is a Business. 20

Step 1: Apply the Screen. 21

Step 2: FrameworkInputs, Substantive Processes, and Other Considerations. 22

V. Illustrations. 26

VI. Transition of ASU 2017-01. 39

VII. Allocation of Goodwill for Tax Purposes- Trade or Business Requirements. 39

Chapter 1 - Section 1 Review Questions. 43

Chapter 2 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 2. 45

ASU 2017-04: Intangibles- Goodwill and Other (Topic 350)- Simplifying the Test for Goodwill Impairment 45

I. Objective. 45

II. Background. 46

III. Rules in ASU 2017-04: 50

IV. Effective Date. 52

V. Examples of Application of ASU 2017-04. 53

Chapter 2 - Section 2 Review Questions. 58

Chapter 2 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 3. 59

ASU 2014-02- Private Company Accounting Alternative. 59

I. Background. 59

II. Definitions. 60

III. Scope of ASU 2014-02: 60

IV. Rules. 61

Chapter 2 - Section 3 Review Questions. 65

Chapter 3 - ASU 2016-02: Leases (Topic 842) - Section 4. 66

I. Background. 67

II. Basic Concepts of ASU 2016-02. 70

A. General Rules. 70

Chapter 3 - Section 4 Review Questions. 73

Chapter 3 - ASU 2016-02: Leases (Topic 842) - Section 5. 74

III. Scope and Scope Exceptions. 74

IV. Identifying a Lease. 74

Chapter 3 - Section 5 Review Questions. 88

Chapter 3 - ASU 2016-02: Leases (Topic 842) - Section 6. 89

V. Lessee Rules. 89

A. Lease Classification  Lessee. 89

B. Initial Measurement of Lease  Lessee. 96

C. Lease Modifications  Lessee. 100

D. Lease Payments  Lessee. 101

E. Lease Term and Purchase Options  Lessee. 110

F. Subsequent Reassessment of Lease Elements  Lessee. 113

G. Short-Term Leases  Lessee. 116

H. Subsequent Measurement and Accounting for Leases  Lessee. 118

I. Other Recognition and Measurement Issues  Lessees. 124

J. Financial Statement Presentation Matters  Lessee. 128

K. Disclosures by Lessees. 130

Chapter 3 - Section 6 Review Questions. 144

Chapter 3 - ASU 2016-02: Leases (Topic 842) - Section 7. 145

VI. Lessor Rules. 145

A. Lease Classification. 145

B. Accounting for Sales-Type Lease- Lessor 150

C. Accounting for a Direct Financing Lease. 156

D. Accounting for Operating Leases  Lessor 160

E. Disclosure  Lessor Leases. 163

Chapter 3 - Section 7 Review Questions. 166

Chapter 3 - ASU 2016-02: Leases (Topic 842) - Section 8. 167

VII. Transition and Effective Date Information. 167

A. General  Existing Leases. 167

B. Transition. 167

VIII. Leases: Sale and Leaseback Transactions. 169

IX. Leases: Leveraged Lease Arrangements. 171

Chapter 3 - Section 8 Review Questions. 172

Chapter 3 - ASU 2016-02: Leases (Topic 842) - Section 9. 173

X. Impact of Changes to Lease Accounting. 173

XI. Impact of Lease Changes on Nonpublic Entities. 175

XII. Other Considerations  Dealing with Financial Covenants. 176

XIII. Avoiding the New Lease Standard. 178

Chapter 3 - Section 9 Review Questions. 180

Chapter 4 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 10. 181

Introduction. 181

ASU 2016-01: Financial Instruments  Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. 183

I. Objective. 184

II. Background. 184

Chapter 4 - Section 10 Review Questions. 192

Chapter 4 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 11. 193

III. Definitions. 193

IV. Rules  Debt Securities. 194

Chapter 4 - Section 11 Review Questions. 213

Chapter 4 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 12. 214

V. Rules  Equity Securities. 214

Chapter 4 - Section 12 Review Questions. 237

Chapter 4 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 13. 238

VI. Changes in Disclosures. 238

VII. Effective Date and Transition  ASU 2016-01. 242

Chapter 4 - Section 13 Review Questions. 248

Chapter 4 - ASU 2017-04: Intangibles- Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment - Section 14. 249

ASU 2016-13: Financial Instruments  Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. 249

I. Objective. 249

II. Background. 249

III. Scope of ASC 326. 251

IV. ASU 2016-13 Amendments. 252

Chapter 4 - Section 14 Review Questions. 265

Chapter 5 - Impact of Tax Cuts and Jobs Act on GAAP and Financial Reporting General - Section 15 266

General 266

I. GAAP Impact of Tax Changes Made by the Tax Cuts and Jobs Act 267

A. Tax Rate Change Impact on Deferred Income Taxes. 267

B. ASU 2018-02: Income Statement  Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. 272

C. Revaluing Deferred Tax Assets from NOLs. 285

D. Impact of Indefinite NOL Carryover Period on Deferred Tax Asset Valuation Accounts. 288

Chapter 5 - Section 15 Review Questions. 295

Chapter 5 - Impact of Tax Cuts and Jobs Act on GAAP and Financial Reporting General - Section 16 296

E. Accounting for the Change from S to C Corporation. 296

F. New Limitation on Interest Deduction. 298

G. Elimination of Like-Kind Exchanges on Personal Property. 299

H. Accounting for Bonus and Section 179 Depreciation in GAAP Financial Statements. 303

I. Overall Impact of Reduction in Tax Rate on SEC Companies. 311

Chapter 5 - Section 16 Review Questions. 315

Chapter 5 - Impact of Tax Cuts and Jobs Act on GAAP and Financial Reporting General - Section 17 316

J. SEC Staff Accounting Bulletin (SAB) No. 118. 316

] 318

K. FASB Staff Q&A: Topic 740, No. 2: Whether to Discount the Tax Liability on the Deemed Repatriation 318

II. Other Tax-Related Issues. 319

A. Deferred Tax Asset Recorded on Other Carryovers. 319

B. Presentation of Tax Benefit of NOL Carryover 321

C. Presenting Deferred Tax Assets and Liabilities on the Balance SheetFASBs ASU 2015-17 323

D. Fixing the Disclosures in Uncertain Tax Positions for Nonpublic Entities. 324

Chapter 5 - Section 17 Review Questions. 328

Chapter 6 - Current Developments: Accounting and Financial Reporting - Section 18. 329

I. Latest Developments on the Accounting Front 329

A. Significant GAAP Changes in 2018 and Beyond. 329

B. FASB Starts Up Financial Performance Reporting Project 331

C. LIFO Survives. 333

Chapter 6 - Section 18 Review Questions. 338

Chapter 6 - Current Developments: Accounting and Financial Reporting - Section 19. 339

D. Sustainability Standards Is a Hot Issue. 339

E. The Politics of Disclosures. 349

F. Extraordinary Items are Gone. 350

Chapter 6 - Section 19 Review Questions. 351

Chapter 6 - Current Developments: Accounting and Financial Reporting - Section 20. 352

G. Accounting, Auditing and Tax Issues Related to Marijuana. 352

H. Order of Placement of Financial Statements. 359

Chapter 6 - Section 20 Review Questions. 363

Chapter 6 - Current Developments- Accounting and Financial Reporting - Section 21. 364

II. Accounting Standards Updates (ASUs) 364

ASU 2016-18: Statement of Cash Flows (Topic 230)  Restricted Cash a Consensus of the FASB Emerging Issues Task Force. 366

ASU 2015-17: Income Taxes (Topic 740)  Balance Sheet Classification of Deferred Taxes. 370

ASU 2015-11: Inventory (Topic 330)  Simplifying the Measurement of Inventory. 371

Chapter 6 - Section 21 Review Questions. 377

Suggested Solutions. 378

Glossary. 426

Index. 432

Final Examination. 437

CPASelfstudy.com Course Evaluation. 451