FAR MOCK EXAM 1 & 2 QUESTIONS AND ANSWERS

Disclosure of vulerability due to Identified concentrations - Answer-Only needs to be disclosed when: C's exist at BS date C's make entity vulnerable in near-term Reasonably possible severe impact CFO reporting - Answer-required of segments reportable Avoidable interest - Answer-The potential amount to be capitalized for construction debt (total expenditures / 2(if evenly spread through year)) x interest rate Compare with total and choose lower Exchange that lacks commercial substance with cash received - what is the gain recognized? - Answer-If cash is less than 25% of total consideration, then divide cash by total and multiply percentage by total gain to determine amount recognized. Acquisition Method Balance Sheet Adjustments - Answer-FV G/L of derivatives held for speculation is recorded where? - Answer-Income Statement Net Periodic Pension Expense Calculation - Answer-SIRAGE Servce Cost +Interest Cost (Beg PBO x Discount rate) -Return on Assets (Beg FV Assets x Return on plan) +Amortization of Prior Service Cost (prior service cost/average remaining service life) -Gain Amortization (see other calc) +Existing net obligation amortization GAAP Pension Plan reporting - Answer-All overfunded plans should be reported as non-current asset, all underfunded as a non-current liability, and any plan where benefits payable in the next year exceeds FV of pension plan assets must be shown as a current liability EPS calculation with PS liquidation value and dividends in arrears - Answer-(PS+CS+APIC+RE-PS Liquidation value-dividends in arrears)CS Outstanding Sh Government-wide financial statements focus on? - Answer-Operational accountability only Funds focus on fiscal accountability only Gove