1 April 2022 3:09

What is modified GAAP?

Modified GAAP means United States generally accepted accounting principles as in effect from time to time, except that: (i) stock-related expenses (including stock options, restricted stock, stock appreciation rights, restricted stock units, stock purchase programs or any award based on equity of Intel or Micron) …

What is the modified basis of accounting?

Modified cash basis is an accounting method that combines elements of the two primary bookkeeping practices: cash and accrual accounting. It seeks to get the best of both worlds, recording sales and expenses for long-term assets on an accrual basis and those of short-term assets on a cash basis.

What is the difference between modified accrual and full accrual?

In full accrual accounting, the portion is recognized in the period and value when it is incurred. Modified accrual accounting recognizes the current portion of long-term debt as it matures. It can also be reported to the extent of liquidation with available financial resources that are expendable.

What is adjusted GAAP?

Adjusted GAAP means generally accepted accounting principles, consistently applied, (i) using the same accounting methods, policies, practices, procedures, with consistent classification, judgments, estimation methodology, as were used by the Company in preparing the December 31, 2000 balance sheet of the Company, (ii) …

What is a modified accrual basis?

Modified accrual is a combination of cash basis and full accrual basis. Revenues are recognized when they are both measurable and available. Measurable — the cash flow from the revenue can be reasonably estimated. Available — the revenue is available to finance current expenditures to be paid within 60 days.

Is modified accrual basis GAAP?

Public companies cannot use modified accrual accounting because it does not comply with International Financial Reporting Standards (IFRS) or the generally accepted accounting principles (GAAP).

Is modified cash accounting GAAP?

The modified cash basis is not allowed under Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), which means that a business using this basis will need to alter the recordation of those elements of its transactions that were recorded under the cash basis, so that they …

Which of the following funds should use the modified accrual basis of accounting?

Modified accrual basis accounting is used for all governmental funds (general, federal special revenue, other special revenue, general debt service, debt service, and capital projects). Under the cash basis, transactions are recognized only when cash changes hands.

What account categories are not recorded in the modified accrual basis of accounting?

Fixed assets, such as property, plant and equipment, and long-term debt are not recognized in this accounting basis on the balance sheet because they are not considered a “current” financial resource.

Which fund category uses the modified accrual basis of accounting?

Governmental Funds

All Governmental Funds use the modified accrual basis of accounting and their measurement focus is a flow of spendable financial resources. The General Fund is usually created at the inception of a governmental unit and exists throughout the life of that unit.

What is the difference between cash basis and modified cash basis?

As mentioned, modified cash-basis allows you to include short-term items like cash-basis accounting. But, you can also include long-term items like you can with the accrual method. Unlike with cash-basis, you can record accounts receivable, current and fixed assets, and accounts payable with modified cash accounting.

When Should property taxes be recognized under modified accrual accounting?

modified accrual basis. 19. NCGA Interpretation 3 also provides that property taxes should be collected within sixty days of year-end to be deemed ―available.

Do the differences between full accrual accounting and modified accrual accounting apply to revenues expenditures or both explain?

The difference between the full accrual and modified accrual basis of accounting applies both to revenues and expenditures. Under full accrual accounting, revenues are recognized when earned; under modified accrual accounting, revenues are recognized when measurable and available.

How would the change affect the reported expenditures of a governmental fund under GAAP?

The change would have no impact on reported expenditures under GAAP. The expenditure would be charged in the year in which the employees provided their services, irrespective of when they are paid.

Which of the following is a fiduciary fund?

The fiduciary fund category includes pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds and agency funds.” Examples of fiduciary funds a city may have include a law enforcement trust fund and firemen’s pension fund.

What does susceptible to accrual mean?

Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). “Measurable” means the amount of the transaction can be reasonably estimated.

Why would governmental funds elect to use the modified accrual basis instead of the full accrual basis?

Modified accrual accounting is used and accepted by governmental agencies because these entities have a much different goal from for-profit and nonprofit entities. A governmental entity is focused on current-year obligations, and the modified accrual basis focuses mainly on short-term financial assets and liabilities.

What assets are viewed as current financial resources?

What assets are viewed as current financial resources? Current financial resources are primarily cash, investments, and receivables because they can be quickly turned into cash for spending purposes. These resources are expected to be used to meet the current period spending needs of the governmental funds.

What are the five types of governmental funds?

Governmental funds are classified into five fund types: general, special revenue, capital projects, debt service, and permanent funds.

What are the 11 different funds used in governmental accounting?

Governmental Reporting Overview Fund Type Structure

Governmental Funds Proprietary Funds Fiduciary Funds
General (FT01) Enterprise (FT05) Pension (FT10)
Special Revenue (FT02) Internal Service (FT06) External Investment Trust (FT18)
Debt Service (FT03) Private-Purpose Trust (FT20)
Capital Projects (FT04) Custodial (FT22)

What are the types of fiduciary funds?

The Statement describes four types of fiduciary funds:

  • Pension (and other employee benefit) trust funds,
  • Investment trust funds,
  • Private-purpose trust funds, and.
  • Custodial funds.

Which of the following has established a hierarchy of GAAP?

The “Hierarchy of GAAP” is established by the: A) Financial Accounting Standards Board.

What are the major heads of GAAP?

There are 10 general concepts that lay out the main mission of GAAP.

  • Principle of Regularity. …
  • Principle of Consistency. …
  • Principle of Sincerity. …
  • Principle of Permanence of Methods. …
  • Principle of Non-Compensation. …
  • Principle of Prudence. …
  • Principle of Continuity. …
  • Principle of Periodicity.

What is the highest form of accounting guidance?

The top of the hierarchy is the most authoritative guidance. An accountant researching a given topic should consult first with the highest level for relevant advice. If no information on the topic is given at the higher levels, the accountant should look to the next level for relevant pronouncements.

What is the purpose of GAAP?

The purpose of GAAP is to ensure that financial reporting is transparent and consistent from one organization to another.

What are the 4 principles of GAAP?

The four basic principles in generally accepted accounting principles are: cost, revenue, matching and disclosure.

What are the 5 GAAP principles?

Revenue Recognition Principle, Historical Cost Principle, Matching Principle, Full Disclosure Principle, and.