Why do you think the Altria Group Annual report has so much discussion of contingencies? Based on your brief review of the contingencies note, are you confident that Altria Group has reported all its liabilities? Why or why not?
Here is the footnote: http://thomson.mobular.net/thomson/7/2592/3076/© BrainMass Inc. brainmass.com October 25, 2018, 3:51 am ad1c9bdddf
Here is the link to the footnote:
I put my answer in word so you can edit and re-write in your own words. This assignment is asking your opinion so alter whatever you need to make it your own view. This gets you started. I didn't use anything but the Footnote 21 from the 2007 Annual Report on the company website (see link above).
Altria's contingency footnote in their 2007 Annual Report, obtained from their company website under "investor relations," ...
Footnotes can be difficult to read but they reveal important information. This discussion in everyday language reaches conclusions about liabilities based on the footnote mentioned.
International Financial Reporting Standards
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I am currently stuck on the following HW questions looking to get pointed in the right direction. Any help would be greatly appreciated.
The International Accounting Standards Board (IASB) is the independent standard-setting body of the IFRS Foundation. Currently IASB has fifteen members with four of them from the United States (US). A new member representing the US will join the Board soon bringing the total number of US representatives to five.
What is your opinion about the level of US representation on the IASB?
The IASB and the Financial Accounting Standards Board (FASB) are working on a Joint Project on Conceptual Framework, Phase B - Elements and Recognition. The Joint Project provides the following working definitions for an asset and a liability.
"An asset of an entity is a present economic resource to which the entity has a right or other access that others do not have."
"A liability of an entity is a present economic obligation for which the entity is the obligor."
Review the following items and evaluate if they should be recorded as an asset or a liability under the Boards' working definitions above. Explain your answers.
a). Uncollectible accounts receivable
b). Payables arising from future inventory purchases
c). Lawsuit settlement (no lawsuit has been filed and no manifestation of intent has been expressed)
XYZ Company typically records revenue under US GAAP when both parties (XYZ Company and the customer) have signed a master agreement. In the first quarter of 2010, XYZ Company entered into a master agreement to provide Product A to one of its customers. On September 30, 2010, XYZ Company is in possession of a signed purchase order for Product B, which also will be covered by the master agreement signed for Product A. On September 30, 2010, Product B was delivered. On September 30, 2010, XYZ Company is negotiating an amendment to the master agreement, which XYZ Company believes is a mere formality, and no further material items are under negotiation. On October 5, 2010, XYZ Company obtains from its customer a final, signed copy of the amendment, which is dated September 30, 2010, with no terms materially changed. XYZ Company signed the agreement as soon as it received it from the customer. XYZ Company recognizes the revenue related to the transaction for Product B in the quarter ended September 30, 2010.
1) Discuss the general rules applicable for revenue recognition in this transaction under IAS 18, Revenue. Provide specific citation.
2) Is the revenue recognition appropriate under IFRS? Explain in details.
On April 15, 2010, the ABC Company (ABC) enters into a contract with a customer to provide Product Z for $100,000. Delivery occurs on April 30, 2010. Payment terms, which are standard for ABC, are as follows: $50,000 due June 15, 2010, and $50,000 due December 15, 2010. ABC's customer is in the start-up phase and has been in operation for six months. As of June 30, 2010, the customer has made no payments. ABC obtained the financial statements for its customer, which revealed losses for all periods and a cash balance of $10,000. The customer informed ABC that it was in the process of finalizing an agreement for some additional venture financing, which will be used to make future payments. ABC demonstrates that it has persuasive evidence of an arrangement, delivery has occurred and the selling price is fixed.
Should revenue be recognized on this transaction when delivery occurs on April 30, 2010, under IFRS? Why or why not?
On December 15, 2010, Robots Inc. (RI) sold General Cereal (GC) a used packaging machine and installation services for $270,000. RI currently sells installation contracts on a stand-alone basis. RI frequently sells and installs this type of packaging machine. Machines are not functional until properly installed. Based on historical sales, RI has determined the fair value of this packaging machine is $250,000 and the fair value of the installation agreement is $50,000. The packaging machine was delivered on December 27 and installed on January 3.
1) How many separate components will RI have related to this transaction under IFRS? Explain using appropriate authoritative literature.
2) How much revenue should RI record in December and January under IFRS? Explain
You are the assistant controller of BIG Company (BIG), a large manufacturing company. Two years ago, BIG decided to follow IFRS for reporting purposes (it has a large number of overseas subsidiaries). You have been asked to compute the 2012 EPS amounts for inclusion in the annual report to shareholders.
You have been able to gather the following information:
• The net profit of the company for 2012 was $30.0 million.
• The common shares outstanding at January 1, 2012, totaled 2.0 million shares and an additional 1.0 million shares were issued on July 1, 2012.
• The average market price of the common stock during the year was $85 per share. The average market price for the first quarter, second quarter, third quarter and fourth quarter was $76, $81, $82 and $93, respectively.
• The company has 50,000 outstanding stock options, each convertible into one share of stock, exercisable at $75 per share. These options are vested and have been outstanding for the entire year.
1) Determine the weighted-average of the common shares outstanding for 2012 for both basic and diluted EPS under IFRS.
2) Calculate the basic and diluted EPS.
. Cathay Pacific Airways (HKG) is an international airline offering scheduled passenger and cargo services to 116 destinations in 35 countries and territories. The following titles were shown on Cathay's statement of financial position for a year.
Current portion of long-term liabilities Deferred taxation
Fixed assets Investments in associates
Liquid funds Minority interests
Reserves Other long-term receivables and investments
Retirement benefit obligations Share capital--ordinary shares
Taxation Unearned transportation revenue
Organize the accounts in a general order in which they would have been presented in a classified statement of financial position under IFRS. Include appropriate section titles as well. A complete statement of financial position is not required.
The following is an excerpt from Note 40 Accompanying Soceite Generale's 2007 Financial statements:
Theh application of the provisions of IAS 10 "Events after the balance sheet date" and IAS 39 "Financial instruments: Recognition and Measurement". for the accounting of transactions related to those unauthorized activities and their unwinding would have led to recognizing a pre-tax gain of EUR 1.471 million in consolidated income for the 2007 financial year and only presenting the pre-tax loss of EUR 6.382 million ultimately incurred by the Group in January 2008 in the note of the 2007 consolidated financial statements.
For the information of its shareholders and the public, the Group considered that this presentation was inconsistent with the objective of the financial statements described in the framework of IFRS standards and that for the purpose of a fair presentation of its financial situation at December 31, 2007, it was more appropriate to record all the financial consequences of the unwinding of these unauthorized activities under a separate caption in consolidated income for the 2007 financial year. To this end in accordance with provision of paragraphs 17 and 18 of IAS 1 "Presentation of Financial Statements" the Group decided to depart from the provisions of IAS 10 "Events After the Balance Sheet Date" and IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" by booking in estimated consolidated income for the 2007 financial year a provision for the total cost of the unauthorized activities.
a) What is the "True and Fair Departure" under IAS 1?
b) Evaluate the appropriateness of the footnote disclosure according to the requirements under IAS 1.View Full Posting Details