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Generally Accepted Accounting Principles |
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Accounting Research Bulletins (ARB)
(No. 43 - No. 51)
U.S.
GAAP by Topic
Statements
of Financial Accounting Standards (SFAS)
Statements
of Financial Accounting Concepts (SFAC)
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| Accounting Research Bulletins (ARB) |
| Accounting Research Bulletins (ARB)
No. 43: Restatement and Revision of Accounting Research Bulletins (June
1953)
No. 44: Declining-Balance Depreciation (October 1954)--> ARB No. 44: superseded by revised version of ARB No. 44 (July 1958)
No. 44 (Revised): Declining-balance Depreciation (July 1958)--> ARB No. 44 (Revised): superseded by SFAS No. 96 (December 1987)
No. 45: Long-Term Construction-Type Contracts (October 1955)
No. 46: Discontinuance of Dating Earned Surplus (February 1956)
No. 47: Accounting for Costs of Pension Plans (September 1956)--> ARB No. 47: superseded by APB Opinion No. 8 (November 1966) --> APB Opinion No. 8: superseded by SFAS No. 87 (December 1985)
No. 48: Business Combinations (January 1957)--> ARB No. 48: superseded by APB Opinion No. 16 (August 1970) --> APB Opinion No. 16: superseded by SFAS No. 141 (June 2001)
No. 49: Earnings per Share (April 1958)--> ARB No. 49: superseded by APB Opinion No. 9 (December 1966) --> APB Opinion No. 9 (Section II, EPS portion): superseded by SFAS No. 128 (February 1997)
No. 50: Contingencies (October 1958)--> ARB No. 50: superseded by SFAS No. 5 (March 1975)
No. 51: Consolidated Financial Statements (August 1959) |
| Accounting Research Bulletin (ARB) No. 43 |
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Accounting Research Bulleting (ARB) No. 43 a. Restatement and Revision of Accounting Research Bulletins b. Issued in June 1953 Chapters of ARB No. 43 Chapter 1: Prior Opinions Section A: Rules Adopted by Membership
Unrealized profit--> NOT credited to income.
Profit is assumed to be realized--> when a sale is completed --> in the ordinary course of business
Capital surplus--> should not be used to offset income account losses.
Notes or accounts receivable from officers, employees, or affiliated companies --> must be shown separately. Section B: Opinion Issued by Predecessor Committee
Profits and Losses on Treasury stock--> should be reflected in capital surplus. Chapter 2: Forms of Statements Section A: Comparative Financial Statements
Comparative financial statements--> make financial statements more useful.
It is desirable that--> financial statements be given for one or more preceding years (as well as for the current year) Section B: Combined Statement of Income and Earned Surplus --> Chapter 2B: deleted by APB Opinion No. 9 (December 1966) Chapter 3: Working Capital Section A: Current assets and current liabilities
Working capital= current assets - current liabilities
Working capital (also
called net working capital)
APB Opinion No. 9--> represents the liquid portion of capital --> a margin for meeting obligations (within the ordinary operating cycle)
Current assets--> assets that are reasonably expected to be realized in cash (or sold or consumed) within one-year or normal operating cycle, whichever is longer.
Current liabilities--> obligations that are reasonably expected to be liquidated within one-year or normal operating cycle, whichever is longer. Section B: Application of U.S. Government Securities against Liabilities for Federal Taxes on Income --> Chapter 3B: replaced by APB Opinion No. 10 (December 1966) Chapter 4: Inventory Pricing Statement 1
Inventory refers to --> tangible personal property a. held for sale in the ordinary course of business, b. in process of production for such sale, or c. are to be currently consumed in the production. Statement 2
Objective of accounting for inventories--> to properly determine the income (through the process of matching costs against revenues.) Statement 3
Primary basis of accounting for inventories--> is cost.
Cost of inventories--> sum of expenditures incurred to bring inventories to its current condition (and location). Statement 4
Cost may be determined--> under any one of several assumptions about the flow of cost factors.
Examples of cost flow assumptions--> first-in first-out last-in first-out average
Objective of selecting a cost flow assumption is--> to choose the one which most clearly reflects periodic income. Statement 5
Lower of cost or market--> A departure from the cost basis is required --> when the utility of goods is less than cost. Statement 6
Market means current replacement cost
except that:--> a. Market should not exceed the net realizable value (i.e., estimated selling price - cost of completion and disposal) --> b. Market should not be less than net realizable value reduced by an allowance for normal profit margin. Statement 7
Lower of cost or market may be applied--> a. to each item or b. to the total of each major category or c. to the total of inventory. Statement 8
The basis of inventory valuation--> must be consistently applied and --> should be disclosed in the financial statements. Statement 9
Inventories may be stated above cost--> only in exceptional cases (e.g., precious metals) Statement 10
Accrued net losses on firm purchase commitments for inventories --> measured in the same way as inventory losses, --> should be recognized in the accounts and the amounts separately disclosed in the financial statement. Chapter 5: Intangible Assets --> Chapter 5: deleted by APB Opinion No. 17 (August 1970) --> APB Opinion No. 17: superseded by SFAS No. 142 (June 2001) Chapter 6: Contingency Reserves --> Chapter 6: deleted by SFAS No. 5 (March 1975) Chapter 7: Capital Accounts Section A: Quasi-Reorganization or Corporate Readjustment Section B: Stock Dividends and Stock Split-up
Stock Dividend--> Issuance of its own stock to shareholders without consideration --> to distribute retained earnings to shareholders.
Accounting for Stock Dividend--> Retained earnings is transferred to capital stock and additional paid-in capital --> for the amount of fair value of additional shares issued
Stock Split--> Issuance of its own stock to shareholders without consideration --> to reduce per share price by increasing number of outstanding shares.
Accounting for Stock Split--> Retained earnings is not transferred to capital stock. Issuance of additional
shares of more than 25 percent--> Recorded as stock splits. Section C: Business Combinations --> Chapter 7C: deleted by ARB No. 48 (January 1957) --> ARB No. 48: superseded by APB Opinion No. 16 (August 1970) --> APB Opinion No. 16: superseded by SFAS No. 141 (June 2001) Chapter 8: Income and Earned Surplus --> Chapter 8: deleted by APB Opinion No. 9 (December 1966) Chapter 9: Depreciation Section A: Depreciation and High Costs Section B: Depreciation on Appreciation --> Chapter 9B: replaced by APB Opinion No. 6 (October 1965) Section C: Emergency Facilities: Depreciation, Amortization and Income Taxes Chapter 10: Taxes Section A: Real and Personal Property Taxes Section B: Income Taxes --> Chapter 10B: deleted by APB Opinion No. 11 (December 1967) --> APB Opinion No. 11: superseded by SFAS No. 96 (December 1987) --> SFAS No. 96: superseded by SFAS No. 109 (February 1992) Chapter 11: Government Contracts Section A: Cost-Plus-Fixed-Fee (CPFF) Contracts
Fees under CPFF contracts--> may be credited to income on the basis of partial performance (with reasonable assurance of realization) Fees may be accrued--> as they are billable. Reimbursable costs and fees
are--> included in sales or other revenue accounts.
Unbilled costs and fees are--> receivables. Section B: Renegotiation Section C: Terminated War and Defense Contracts Chapter 12: Foreign Operations and Foreign Exchange Chapter 13: Compensation Section A: Pension Plans: Annuity Costs Based on Past Service --> Chapter 13A: deleted by APB Opinion No. 8 (November 1966) --> APB Opinion No. 8: superseded by SFAS No. 87 (December 1985) Section B: Compensation Involved in Stock Option and Stock Purchase Plans --> Chapter 13B: amended by APB Opinion No. 25 (October 1972) --> APB Opinion No. 25: superseded by SFAS No. 123 (Revised) --> Chapter 13B: deleted by SFAS No. 123 (Revised) (December 2004) Chapter 14: Disclosure of Long-Term Leases in Financial Statements of Lessees --> Chapter 14: deleted by APB Opinion No. 5 (November 1966) --> APB Opinion No. 5: superseded by SFAS No. 13 (November 1976) Chapter 15: Unamortized Discount, Issue Cost, and Redemption Premium on Bonds Refunded --> Chapter 15: deleted by APB Opinion No. 26 (October 1972) |
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