The accrual of restructuring costs creates obligations (liabilities) referred to as exit or disposal cost obligations. Required: 1. Obtain the relevant authoritative literature on exit or disposal cost obligations using the FASB Accounting Standards Codification. You might gain access at the FASB website (asc.fasb.org). What is the Codification topic number that addresses this issue? 2. What is the specific citation that addresses the initial measurement of these obligations? 3. How are these obligations and related costs to be measured? 4. What is the specific citation that describes the disclosure requirements in the notes to the financial statements for exit or disposal obligations? 5. List the required disclosures.

The accrual of restructuring costs creates obligations (liabilities) referred to as exit or disposal cost obligations. Required: 1. Obtain the relevant authoritative literature on exit or disposal cost obligations using the FASB Accounting Standards Codification. You might gain access at the FASB website (asc.fasb.org). What is the Codification topic number that addresses this issue? 2. What is the specific citation that addresses the initial measurement of these obligations? 3. How are these obligations and related costs to be measured? 4. What is the specific citation that describes the disclosure requirements in the notes to the financial statements for exit or disposal obligations? 5. List the required disclosures.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter25: Bankruptcy, Reorganization, And Liquidation

Section: Chapter Questions

Problem 3MC

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The accrual of restructuring costs creates obligations (liabilities) referred to as exit or disposal cost obligations.Required:1. Obtain the relevant authoritative literature on exit or disposal cost obligations using the FASB AccountingStandards Codification. You might gain access at the FASB website (www.fasb.org). What is the Codification topic number that addresses this issue?
1. State if each of the costs identified above should be provided for. Givereasons for your answers. Include calculations where necessary 2.Calculate the amount of the restructuring provision if any.
The FASB has established a Five-Step process to recognize revenue. Which of the following is not one of those steps? A. Ability to identify the contract with the customer. B. Determination thatcollection of the entitled contractual consideration from the customer is probable. C. Properly identify all of the performance obligations within the contract. D. Ability to determine the transaction price. E. Properly identify all of the deliverables and allocate the transaction price to each.
Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org).Required:Determine the specific citation for accounting for each of the following items: Circumstances indicating when theinstallment method or cost recovery method is appropriate for revenue recognition.
Access the FASB’s Codification Research System® at the FASB website (www.fasb.org) and select Basic View. Determine the specific seven-digit (XXX-XX-XX) or eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items: Definition of initial direct costs. When a modification to a contract is reported as a separate contract (that is, separate from the original contract). The disclosures required in the notes to the financial statements for a lessor. The classification criteria for when a lessee classifies a lease as a finance lease and a lessor classifies a lease as a sales-type lease.
Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the correct letter: A. Revocable amount of the consideration received or receivable B. Book value of the consideration received or receivable C. Fair value of the consideration received or receivable D. Historical cost of the consideration received or receivable
If the outcome of a long-term contract can be measured reliably, the preferred accounting method under both IFRS and US GAAP is: A . the cost recovery method.
When percentage-of-completion accounting is not appropriate, U.S. GAAP requires the use of the completedcontract method, while IFRS requires the use of the cost recovery method. Explain how the two methods affectrecognition of revenue, cost of construction, and gross profit over the life of a profitable contract.
When it is probable that total contract costs will exceed total contract revenue, how shall it be accounted for? Group of answer choices The expected loss shall be recognized as an expense immediately only when the outcome of a construction contract cannot be estimated reliably. The expected loss shall be recognized as an expense immediately regardless of the certainty or uncertainty of the outcome of a construction contract. The expected loss shall be accounted for based on company’s policy. The expected loss shall be recognized as an expense by reference to the state of completion of the contract activity at the end of the reporting period when the outcome of a construction contract cannot be estimated reliably. PreviousNext
Under the new revenue recognition guidance in ASC Topic 606, which of the following statements is true regarding contracts with customer options? In some cases where customers have an option to acquire additional goods or services, an evaluation is required to determine if the option creates an additional performance obligation. An additional performance obligation is created if the customer could obtain the same rights to additional goods or services without entering the contract. An additional performance obligation is created if the option provides the customer a right to purchase the goods or services at the stand-alone selling price for those goods or services. It is generally not considered a performance obligation when a retailer grants a "customer appreciation dividend" to a customer.
Which statement is true when the outcome of construction contract cannot be estimated reliably? a. Contract costs shall be recognized as an expense in the period when incurred. b. Revenue shall be recognized only to the extent of contract costs incurred that is probable will be recoverable c. All of these statements are true. d. An expected loss on the construction contract shall be recognized as an expense immediately.
Which of these statements is true? a. The matching concept requires that we distinguish between expired and unexpired costs. b. To say that a cost has expired means that the benefits associated with the expenditure have been recognized. c. Most costs that represent future benefits are classified as assets. d. Matching is required for external reporting. e. All of the above.