Advanced Accounting

Overview

Footnotes to financial statements provide additional information or details to clarify figures. They refer to additional information that helps explain how a company arrived at the numbers outlined in the data. They also help to explain any irregularities or perceived inconsistencies in the account, from one year to another. Review the

Supporting Materials

section to see examples of footnotes in an 8-K report for a well-known organization.

In this assignment, you will create footnotes to support financial data. This assignment will help you complete Project One, where you will complete consolidated balance sheets.

Directions

Part One: Footnotes

Use data from your textbook, Illustration 2-5 P Company Pro Forma Balance Sheet, linked in the Supporting Materials section, to create an applicable footnotes page. Pay particular attention to adjustments that stand out and may require footnotes.Part Two: Financial Accounting Standards Board (FASB) CodificationAnswer the questions from your textbook, linked in the Supporting Materials section, to complete this assignment. Clearly label the questions you are answering for Part Two.

Specifically, you must address the following rubric criteria:

Part One: Footnotes

Identify four to five adjustments that require footnotes.

Explain irregularities based on the adjusted numbers using footnotes. Consider the following questions to guide your response:

What might be a potential reasonable explanation for the irregularity?

Why might certain original amounts in the audited balance sheet have previously been zero?

What threshold number created a concern, and why?

Part Two:

FASB Accounting Standards Codification

(ASC)

Determine if the codification allows for exceptions at interim reporting dates.

Determine if interim periods are considered standalone financial statements or an integral part of the annual financial statements under current Generally Accepted Accounting Principles (GAAP) (ASC13-5).

Explain if you agree or disagree with how interim periods are handled by GAAP (ASC13-5).

Submit your assignment as a 2- to 3-page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.

Supporting Materials

Textbook Data: Illustration 2-5 Company Pro Forma Balance SheetThis illustration contains data to complete Part One.Textbook Framework: FASB’s Conceptual FrameworkRefer to Concepts Statement No. 3 when completing Part One.Website: Form 8-KThis website provides the purpose of the Form 8-K and circumstances that require this form. This will help you with Part One.Website: Target Form 8-K ReportsReview the example of different types of disclosures. This will help you with Part One.Textbook Questions: Chapter 13 ASC ExercisesThis contains all of the questions to complete Part Two: ASC13-1, ASC13-3, ASC13-5, ASC13-6.Website: FASB Accounting Standards CodificationThis website contains all of the codification codes and GAAP to complete Part Two. The following are access instructions:

Access the FASB Accounting Standards Codification website.

On the right side of the screen under Basic View, select I’m not a robot and pass through the reCAPTCHA system. Select Access the Basic View.

Accept the license agreement for the Basic View.

Find each topic/subtopic listed.