كورس UNIT 4 : CMA PART 1
MR:amr taison
MR:mohamed cma
MR:desoky kh.
MR:m.batayneh
1) Purchase Commitment
2) Warranty Liability
3) Contingencies -- Recognition and Reporting
MR:amr taison
MR:mohamed cma
MR:desoky kh.
MR:m.batayneh
1) Definition of a Lease
2) Lease Classification Test
3) Lessee Accounting -- Initial Measurement
4) Lessee Accounting for Finance Leases -- Subsequent Measurement
5) Lessee Accounting for Operating Leases -- Subsequent Measurement
MR:amr taison
MR:mohamed cma
MR:desoky kh.
MR:m.batayneh
1) Objectives
2) Basic Definitions
3) Intraperiod Tax Allocation
4) Interperiod Tax Allocation
5) Deferred Tax Assets and Liabilities
6) Calculating Tax Expense or Benefit
MR:amr taison
MR:mohamed cma
MR:desoky kh.
MR:m.batayneh
1) Nature of Bonds
2) Bond Issuance
3) Amortization of Premium or Discount
4) The following are different types of bonds
5) Non-current Notes Payable
| G.2020 | G.2022 | mr.amro taison |
|---|---|---|
| 2.9 | 4.1 | lec. 6 |
| 3.4 | 4.2 | xxx |
| 3.5 | 4.3 | lec. 8 |
| 3.6 | 4.4 | lec. 8 |
1- What are the types of liabilities in the balance sheet?
*Current liabilities such as (creditors - accounts payable - unrealized revenues - due tax ...)
*Non-current liabilities such as (long-term bonds - long-term notes payable)
*Non-current liabilities such as (long-term bonds - long-term notes payable)
2- What is Purchase Commitment?
A commitment to purchase a specific number or value of goods in the future at a fixed price. This agreement is non-cancelable, so the company must recognize a loss when the current cost of the purchases less than the contracted price.
3- What is a warranty liability?
A warranty is a written guarantee of the integrity of a goods or service. by this guarantee the seller agree to repair or replace a goods , refund all or part of the price of the goods or service, or provide additional service instead.
4- What are the types of warranty?
1) Service-type warranty
2) Assurance-type warranty
2) Assurance-type warranty
5- What is Assurance -type warranty?
It is considered an essential part of the goods sold, meaning that the price of the goods includes the price of the warranty, so the customer is obliged to buy the warranty with the goods, otherwise he will not buy, such as buying a computer with a one-year warranty. During that year, the customer has the right to replace or repair industry defects
6- What is Service -type warranty?
It is offered with the merchandise at a specified amount, meaning that its price is separated from the price of the merchandise. This sale process expresses that the company sells two products in one product, selling the merchandise and selling the guarantee.
7- What is the definition of a Lease?
A lease is a long-term contract between the lessor and the lessee, through this contract the lessor allows the lessee to use the property (owned by the lessor) for a specified period in return for a set amount paid by the lessee
8- How is a lease classified?
A lease is considered financing (for the lessee) and selling (for the lessor) if at least one of five specified conditions is met
9- What is the five criteria for a lease?
1) Transfer of ownership of the leased asset to the lessee at the end of the lease contract
2) The lease contract contains a condition that allows the lessee to purchase the leased asset
3) the lease term which is equal to 75% or more than the expected economic life of the asset
4) The present value of the amounts to be paid by the lessee equals 90% or more of the fair value of the asset
5) The lessee does not intend to change the activity of using this asset
2) The lease contract contains a condition that allows the lessee to purchase the leased asset
3) the lease term which is equal to 75% or more than the expected economic life of the asset
4) The present value of the amounts to be paid by the lessee equals 90% or more of the fair value of the asset
5) The lessee does not intend to change the activity of using this asset
10- What is a short term lease?
A short-term lease is a form of off-balance sheet financing for the lessor, and a period expense for the lessee. It is a lease contract between the lessor and the lessee in which the lease period does not exceed 12 months, and does not contain a condition that allows the lessee to purchase the asset
11- What are leases According to IFRS?
IFRS has a difference that: all leases for the lessee are considered finance leases except for:
1) Short-term lease: These are contracts in which the lease period is 12 months or less.
2) Lease with low asset value: These are lease contracts in which the value of the asset does not exceed $5,000
1) Short-term lease: These are contracts in which the lease period is 12 months or less.
2) Lease with low asset value: These are lease contracts in which the value of the asset does not exceed $5,000
12- What are the objectives of accounting for income taxes?
1) To recognize the amount of currently payable taxes or refundable taxes
2) To recognize the deferred tax liabilities and assets for the future tax
2) To recognize the deferred tax liabilities and assets for the future tax
13- What is the accounting income?
It is the income that is determined based on generally accepted accounting principles (GAAP) and that appears in the income statement after subtracting expenses from revenues, meaning that accounting income represents net income before tax.
14- What is the tax income?
Tax Income: It is the income that is subject to tax
Tax income differs from accounting income as a result of adjusting the income and expense items in the income statement in accordance with the tax laws of the country
Tax income differs from accounting income as a result of adjusting the income and expense items in the income statement in accordance with the tax laws of the country
15- What are the permanent tax differences?
They are expenses or revenues that are either
1) Accountable and not governmental acceptable: that is, companies consider them as taxable amounts, but the government considers them non-taxable amounts..
2) or they are not accountable and governmentally acceptable
1) Accountable and not governmental acceptable: that is, companies consider them as taxable amounts, but the government considers them non-taxable amounts..
2) or they are not accountable and governmentally acceptable
16- What are the temporary tax differences?
It meaning that: may be income or expenses that are classified as acceptable to the government in a certain year and not acceptable in the other, or it is acceptable for a certain number of years and after that it becomes unacceptable, meaning that these differences cannot be classified as always taxable or always non-taxable.
17- What is the nature of bonds?
It is a contract between the company issuing the bonds and the parties who buy these bonds. Under this contract, the company pays the bond holders the face amount of the bonds plus interest on the maturity date or in separate payment periods.
18- How are the bonds issued?
The cash collected from selling bonds can be equal to, less than, or more than the face amount of these bonds , it is depending on the relationship between the bonds’ stated rate of interest and the market rate of interest on the selling bonds date
19- How is the bond premium calculated?
First, determine the face amount of the bonds, and suppose that it was 500,000$. Second, calculate the present value of the amounts that the company will pay, (the annual interest + the face amount) of the bonds (based on the company’s interest, which is higher than the market interest), and suppose that the current value of these amounts was 520,000, so the difference is 20,000 is called the full bond premium. Note that in the case of the company issuing an interest greater than the market interest, the present value of the future amounts that the company will pay will always be greater than the face amount of the bonds and the difference is called the issue premium (bond premium)
20- How is the bond discount calculated?
The opposite of the premium: that is, the company pays interest less than the market interest, but what attracts the investor to buy bonds with interest less than the market interest?? The company will pay the face amount of the bonds in the future, higher than the actual face amount, for example, the face amount of the bonds is 90,000, so that the company will pay a higher amount to bonds holder ]for example 100,000[ so the investor benefited from two aspects: an additional amount he will get with the face amount of the bonds (10,000), and annual interest (even if it is less than market interest)
21- What are the classifications and types of bonds?
1) Maturity Pattern : {A term bond , A serial bond}
2) Repayment Provisions : {Income bonds , Revenue bonds}
3) Securitization : {Mortgage bonds , Debentures , Guaranty bonds , Collateral trust bonds , Equipment trust bonds}
4) Valuation{Variable (or floating) rate bonds , Zero-coupon or deep-discount bonds , Commodity-backed bonds , Redemption Provisions , Callable bonds (redeemable bonds) , Convertible bonds}
2) Repayment Provisions : {Income bonds , Revenue bonds}
3) Securitization : {Mortgage bonds , Debentures , Guaranty bonds , Collateral trust bonds , Equipment trust bonds}
4) Valuation{Variable (or floating) rate bonds , Zero-coupon or deep-discount bonds , Commodity-backed bonds , Redemption Provisions , Callable bonds (redeemable bonds) , Convertible bonds}