CHAPTER 1

CASH AND CASH EQUIVALENTS

Definition of cash
Definition of cash equivalents
Valuation and statement presentation of cash
Investment of excess cash
Foreign currency, cash fund for a certain purpose, bank overdraft, and compensating balance
Undelivered check, postdated check delivered, and stale check
Imprest system
Petty cash fund – imprest fund system and fluctuating fund system

CHAPTER 2
BANK RECONCILIATION

Bank deposits
What is bank reconciliation?
Book reconciling items – credit memo, debit memo, and errors
Bank reconciling items – deposits in transit, outstanding checks, and errors
Form of bank reconciliation – adjusted balance, book to bank and bank to book

CHAPTER 3
PROOF OF CASH

Two-date bank reconciliation

Computation of book balance
Computation of bank balance
Computation of deposits in transit
Computation of outstanding checks

CHAPTER 4
ACCOUNTS RECEIVABLE

Definition of receivables
Classification and presentation of receivables
Customers’ credit balance
Initial measurement of accounts receivable
Subsequent measurement of accounts receivable
Gross method and net method of recording credit sales
Allowance method and direct writeoff method
CHAPTER 5
ESTIMATION OF DOUBTFUL ACCOUNTS

Aging of accounts receivable

Percentage of accounts receivable
Percentage of sales

CHAPTER 6
NOTES RECEIVABLE

Definition of notes receivable

Dishonored notes receivable
Initial measurement
Subsequent measurement
Interest bearing note
Noninterest bearing note

CHAPTER 7
LOAN RECEIVABLE

Initial measurement of loan receivable

Subsequent measurement of loan receivable
Origination fees
Direct origination fees
Impairment of loan
Measurement of impairment
Three-stage impairment approach

CHAPTER 8
RECEIVABLE FINANCING
Pledge, assignment, and factoring

Pledge of accounts receivable

Assignment of accounts receivable
Factoring of accounts receivable

CHAPTER 9
RECEIVABLE FINANCING
Discounting of note receivable

Discounting of note receivable without recourse

Discounting of note receivable with recourse
Discounting with recourse as conditional sale
Discounting with recourse as secured borrowing
CHAPTER 10
INVENTORIES

Definition of inventories
Classes of inventories
Goods includible in inventory
Goods in transit
Freight collect and freight prepaid
FOB destination and FOB shipping point
Maritime shipping terms – FAS, CIF, and ex-ship
Periodic and perpetual system
Trade discount and cash discount
Gross method and net method of recording purchases
Cost of purchase, cost of conversion, and other cost
Cost of inventories of a service provider

CHAPTER 11
INVENTORY COST FLOW

FIFO
Average method
Specific identification
LIFO
Standard cost
Relative sales price method

CHAPTER 12
LOWER OF COST AND NET REALIZABLE VALUE

Measurement at lower of cost and NRV

Accounting for inventory writedown and reversal of writedown
Purchase commitments
Disclosures with respect to inventories
Agricultural, forest, and mineral products
Commodities of broker-traders

CHAPTER 13
GROSS PROFIT METHOD

Use of estimate in inventory valuation

Basic formula for gross profit method
Gross profit rate based on sales
Gross profit rate based on cost
Cost of goods sold using gross profit rate
CHAPTER 14
RETAIL INVENTORY METHOD

Information required for retail method

Basic formula for retail method
Conventional or conservative or LCNRV approach
Average cost approach
FIFO approach

CHAPTER 15
FINANCIAL ASSET AT FAIR VALUE

Definition of investments
Statement classification
Definition of financial asset
Classification of financial assets
Equity and debt security
Initial measurement of financial assets
Subsequent measurement of financial assets
Financial asset at fair value through profit or loss
Financial asset held for trading
Equity investment at fair value through other comprehensive income
Debt investment at amortized cost
Debt investment at fair value through other comprehensive income
Fair value of investment
Impairment of financial assets at fair value
Impairment of financial assets at amortized cost

CHAPTER 16
INVESTMENT IN EQUITY SECURITIES
Dividends, share split, and share right

Acquisition of equity securities

Investment categories
Investment in unquoted equity instruments
Sale of equity securities
Cash dividend, property dividend, liquidating dividend, share dividend
Shares received in lieu of cash dividend
Cash received in lieu of share dividend
Share split, special assessment, redemption of shares
Share right accounted for separately
Share right not accounted for separately
CHAPTER 17
INVESTMENT IN ASSOCIATE
Basic principles

Intercorporate share investment

Definition of significant influence
Presumption of significant influence
Equity method
Excess cost and excess fair value
Investee with heavy losses
Impairment of investment in associate
Investee with preference shares
Other changes in equity

CHAPTER 18
INVESTMENT IN ASSOCIATE
Other accounting issues

Upstream and downstream transactions

Discontinuance of equity method
Measurement after loss of significant influence
Equity method not applicable
Investment of less than 20%
Cost method
Investment in associate achieved in stages
Change from cost method to equity method
Change from fair value method to equity method

CHAPTER 19
FINANCIAL ASSET AT AMORTIZED COST

Definition of bond
Initial measurement of bond investment
Subsequent measurement of bond investment
Amortization of bond discount and bond premium
Callable, convertible, serial, and term bonds
Straight line method of amortization
Bond outstanding method of amortization
CHAPTER 20
EFFECTIVE INTEREST METHOD
Amortized cost, FVOCI, and FVPI

Nominal interest rate

Effective interest rate
Effective interest method of amortization
Bond investment – FVOCI
Fair value option
Market price of bonds

CHAPTER 21
RECLASSIFICATION OF FINANCIAL ASSET

Requirement for reclassification

Exemption from reclassification
FVPL to amortized cost
Amortized cost to FVPL
Amortized cost to FVOCI
FVOCI to amortized cost
FVPL to FVOCI
FVOCI to FVPL

CHAPTER 22
INVESTMENT PROPERTY
Cash surrender value

Definition of investment property

Definition of owner-occupied property
Partly investment and partly owner-occupied
Property leased to affiliate
Recognition and measurement of investment property
Fair value of investment property
Transfer of investment property between categories
Disclosures related to investment property
Cash surrender value of life insurance
CHAPTER 23
DERIVATIVES
Interest rate swap

Purpose of derivatives
Types of financial risk
Definition of derivative
Characteristics of derivatives
Measurement of derivatives
Interest rate swap

CHAPTER 24
DERIVATIVES
Forward, futures, option, foreign currency

Forward contract
Futures contract
Call option
Put option
Embedded derivative

CHAPTER 25
PROPERTY, PLANT, AND EQUIPMENT

Definition of property, plant, and equipment

Recognition of property, plant, and equipment
Measurement of property, plant, and equipment
Acquisition of property
Cash acquisition
On account subject to cash discount
Installment acquisition
Issuance of share capital
Issuance of bonds payable
Exchange
Donation
Government grant
Construction
Fully depreciated property
Property classified as held for sale
Idle or abandoned property
CHAPTER 26
GOVERNMENT GRANT

Definition of government grant

Recognition and measurement
Classification of government grant
Accounting for government grant
Repayment of government grant
Grant of interest-free loan
Government assistance
Disclosures related to government grant

CHAPTER 27
BORROWING COSTS

Definition of borrowing cost

Qualifying asset
Accounting for borrowing cost
Asset financed by specific borrowing
Asset financed by general borrowing
Asset financed both by specific and general borrowing
Specific borrowing for asset used for general purpose
Disclosures related to borrowing cost

CHAPTER 28
LAND AND BUILDING

Land – classification, costs, land improvement, special assessment, real property tax
Building – cost when purchased and constructed
Sidewalks, pavements, parking lot, driveways
Claims for damages
Building fixtures
Ventilating system, lightning system, elevator
PIC Interpretation on land and building
CHAPTER 29
MACHINERY
Capital and revenue expenditure

Cost of machinery acquired by purchase

Tools
Patterns and dies
Delivery equipment
Store and office equipment
Furniture and fixtures
Returnable containers
Capital expenditure and revenue expenditure
Additions, improvements or betterments, replacements, repairs, rearrangement cost
Accounting for major replacement

CHAPTER 30
DEPRECIATION
Straight line and variable method

Concept of depreciation
Depreciation in financial statements
Depreciation period
Physical and functional depreciation
Factors of depreciation
Methods of depreciation
Straight line
Composite and group method
Working hours method
Output or production method

CHAPTER 31
DEPRECIATION
Sum of years’ digit and declining balance

Sum of years’ digits

Declining balance and double declining balance
Inventory, retirement, and replacement method
Change in useful life
Change in depreciation method
CHAPTER 32
DEPLETION

Exploration and evaluation of mineral resources

Exploration and evaluation expenditures
Exploration and evaluation asset
Wasting asset
Acquisition cost
Exploration cost
Development cost
Estimated restoration cost
Depletion and depletion method
Revision of depletion rate
Depreciation of mining property
Trust fund doctrine
Wasting asset doctrine
Maximum dividend under the wasting asset doctrine

CHAPTER 33
REVALUATION

Cost model
Revaluation model
Frequency and basis of revaluation
Revalued amount
Fair value
Depreciated replacement cost
Revaluation surplus
Proportional approach
Elimination approach
Treatment of revaluation surplus
Sale of revalued asset
Disclosures related to revaluation
CHAPTER 34
IMPAIREMENT OF ASSETS
Individual asset

Definition of impairment
Indication of impairment
Measurement of recoverable amount
Fair value less cost of disposal
Value in use
Recognition of impairment loss
Reversal of impairment loss

CHAPTER 35
IMPAIRMENT OF ASSETS
Cash generating unit

Definition of cash generating unit

Impairment of cash generating unit
Reversal of impairment of goodwill
Corporate assets
Impairment of corporate assets

CHAPTER 36
INTANGIBLE ASSETS
Goodwill

Definition of intangible asset

Essential criteria for intangible asset
Recognition of intangible asset
Initial and subsequent measurement of intangible asset
Internally generated intangible asset
Identifiable and unidentifiable intangible asset
Amortization of intangible asset
Amortization period, amortization method, and useful life
Change in amortization method and useful life
Disclosures related to intangible asset
Definition of goodwill
Recognition and measurement of goodwill
Impairment of goodwill
CHAPTER 37
INDENTIFIABLE INTANGIBLE ASSETS

Definition of patent
Cost of patent
Amortization and impairment of patent
Definition of trademark
Cost of trademark
Amortization and impairment of trademark
Definition of copyright
Cost of copyright
Amortization and impairment of copyright
Definition of franchise
Initial and periodic franchise fee
Amortization and impairment of franchise
Leasehold improvement
Broadcasting license
Airline right
Customer list
Amortization and impairment of broadcasting license, airline right, and customer list
Organization cost and start-up cost
Web site development cost

CHAPTER 38
RESEARCH AND DEVELOPMENT COST
Computer Software

Definition of research
Definition of development
Research activities
Development activities
Accounting for research cost
Accounting for development cost
Internally developed computer software
Classification of computer software