Fasb Codification Assignment 1 – Receivables Essay

Words: 1525
Pages: 7
Open Document
FASB Codification Assignment 1 – Receivables

You are spending your summer working for a local wholesale furniture company, Beds and Beyond, Inc. The company is considering a proposal from a local financial institution, Old Faithful Financial, to factor Bed and Beyond’s receivables. The company controller is unfamiliar with the most recent FASB pronouncement that deals with accounting for the transfer of financial assets and has asked you to do some research. The controller wants to make sure the arrangement with the financial institution is structured in such a way to allow the factoring to be accounted for as a sale. Old Faithful has offered to factor all of the company’s receivables on a “without recourse” basis. Old Faithful …show more content…
Provide the specific paragraph citation.
An agreement that both entitles and obligates the transferor to repurchase or redeem transferred assets from the transferee maintains the transferor’s effective control over those assets, and the transfer shall therefore be accounted for as a secured borrowing, if and only if all of the following conditions are met: a. The assets to be repurchased or redeemed are the same or substantially the same as those transferred. To be substantially the same, the asset that was transferred and the asset that is to be repurchased or redeemed need to have all of the following characteristics: * 1. The same primary obligor (except for debt guaranteed by a sovereign government, central bank, government-sponsored enterprise or agency thereof, in which circumstance the guarantor and the terms of the guarantee must be the same) * 2. Identical form and type so as to provide the same risks and rights * 3. The same maturity (or in the circumstance of mortgage-backed pass-through and pay-through securities, similar remaining weighted-average maturities that result in approximately the same market yield) * 4. Identical contractual interest rates * 5. Similar assets as collateral * 6. The same aggregate unpaid principal amount or principal amounts within accepted good delivery standards for the type of security
Show More

Related Documents: Fasb Codification Assignment 1 – Receivables Essay

Groupon Case Assignment 2014 Essay

ACTG 630 – Case Assignment Due: Wednesday, December 3 Please submit one assignment per group. No more than 3 students per group. Read “Growing Pains at Groupon” by Dutta, Caplan and Marcinko (2014) and complete the questions included in the Case Requirements section (beginning on page 238). Instructions for accessing the FASB Codification database: 1. Go to http://aaahq.org/ascLogin.cfm 2. User ID: AAA51526 3. Password: x43AYtX ISSUES IN ACCOUNTING EDUCATION Vol. 29, No. 1 2014 pp. 229–245 American…

Words 5795 - Pages 24

Identify And Compute Ratios For Analyzing A Company's Profitability

CHAPTER 2 A Further Look at Financial Statements Study Objectives 1. 2. 3. Identify the sections of a classified balance sheet. Identify and compute ratios for analyzing a company’s profitability. Explain the relationship between a retained earnings statement and a statement of stockholders’ equity. Identify and compute ratios for analyzing a company’s liquidity and solvency using a balance sheet. Use the statement of cash flows to evaluate solvency. Explain the meaning of generally…

Words 8529 - Pages 35

Guilds to 2013 Aicpa Essay example

CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION Approved by the Board of Examiners American Institute of Certified Public Accountants May 15, 2009 Update Approved on October 1, 2011 Effective Date: January 1, 2013 Examinations Team American Institute of Certified Public Accountants 100 Princeton South Suite 200 Ewing, NJ 08628 ii COPYRIGHT © 2011 BY AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, INC. CONTENT SPECIFICATION OUTLINES (CSOs) The outline portions…

Words 7307 - Pages 30

Auditing and Audit Procedures Essay

EXAM #1 STUDY GUIDE (CHAPTER 1-5) *Chapter 1—Introduction to Assurance & Financial Statement Auditing Auditing: analytical and logical skills; much more conceptual in nature; risk based assessments (RBA) Why is Auditing Necessary? House inspector analogy Provides reasonable assurance that financial statements are free from material misstatement Information asymmetry & conflicts of interest lead to information risk for the principal (absentee owner) Principal (Absentee Owner) provides capital…

Words 6939 - Pages 28