Chapters 4,5,6,8 Review

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Management and Organizational Studies
Management and Organizational Studies 3360A/B
Stacey Hann

Chapter 4  Discontinued operations is always presented net of tax and after income tax  When criteria for “assets held for sale” are fulfilled o ASPE:  The asset retains its classification (current/non-current)  Stop recording amortization on the asset  Lower of the (net book value) or (fair value less cost to sell)  Adjustment to I/S if (FV-COST) is lower: Loss in Impairment (Rocketeer Division example)  Unusual Loss o Example: an event, such as a flood which would cause damage to inventory (something that is very infrequent in nature) o Difference between unusual loss and other loss: other may be expected, unusual is not o Unusual loss is included under “Other expenses and losses”  Three things you need to show net of tax o Income from continuing operations o Discontinued operations o OCI (IFRS only) – shown after “Net Income” and the final line = “Comprehensive Income”  EPS is presented thrice – once for NI, once for Discontinued, once for Net Chapter 5  Investments are presented depending on management’s intention with that particular investment o Short-term investments o Long-term bonds held till maturity o Strategic investments are long-term  How to account for investments on the Balance Sheet o Fair Value o Cost/Amortized Cost o Equity method (only applicable for long-term investments)  How to account for A/R o Current asset o Show gross A/R less AFDA (Net Realizable Value)  How to account for PP&E o ASPE  Cost o IFRS  Cost or FV  How to account for Intangible Assets o Presented after PP&E o If it has a finite life, then record amortization o Present at cost less accumulated amortization o Not all intangible assets have amortization  How to account for non-current liabilities o Move curren
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