Overall Flashcard for FAR Exam

define and give examples of. Intra versus inter period tax allocations?

Intraperiod allocations: within one year, across sections of the statements (“net of tax”).

Interperiod allocations: across years, Deffered tax benefits or liabilities

When do current tax expense and current tax liability differ?

When estimated tax payments were made during the year( payments decrease liability)

what is the Effective rate?

total tax expense ÷ pretax book income

A cash basis taxpayer that prepares accrual financial statements has an increase in rent receivable. What does this create?

DTL

A new tax rate is enacted for future years. What happens to existing DTAs and DTLs?

Remeasure them at the new rate; the adjustment hits tax expense in the year of enactment

When must a company record a valuation allowance?

When it is more likely than not (over 50%) that some or all of a DTA will NOT be realized

A company has a $100,000 DTA. It's more likely than not that only $60,000 will be realized. What is the journal entry?

Dr Tax expense $40,000 / Cr Valuation allowance $40,000

How much of income can NOLs offset in future years and for how long

NOLS can offset up to 80% of income and carried forward indefinitely

What does the CAR im IN is BIG stand for?

the consolidation JE, Debit, Common stock, APIC, RE, and Credit Investment in Sub and Noncontrolling Interest, Debit Balance Sheet adjustment to FV and Identifiable FV of assets, goodwill

Aqusition method for Price of

What is the difference between how the equity and fair value option effect is or the investment account?

Equity method increase due to income- balance sheet investment account changes und is equity earning changes fin valve method investment account cheerier and unrealized gens

which sections do dividend paid and received belong on the Cash flow statments?

Dividends paid- Financing

Dividends received- Operating

Equity versus Trading securities

Equity is ivestment ins stock or within a company shares

Trading is th acqurign of debt

How are interest and taxes accouted for on the Cash flow statment?

Both are included in operating sections and are added

What type of transactions are generally classified as investing activities?

Buying and selling of long-term assets and investments