E 7-9 FASB codification research The FASB Accounting Standards Codification repr
ID: 2542033 • Letter: E
Question
E 7-9 FASB codification research The FASB Accounting Standards Codification represents the single source of authoritative U.S. generally accepted accounting principles. Required: 1. Obtain the relevant authoritative literature on accounting for accounts receivable using the FASB's Codification L07-5 Research System at the FASB website (www.fasb.org). What is the specific citation that describes the informa- tion about loans and trade receivables that is to be disclosed in the summary of significant accounting policies? 2. List the disclosure requirements.Explanation / Answer
a) As found in FASB's authoritative literature, the specific citation for the information about loans and trade receivables disclosure policies is FASB 310-10-50-1A
b) The disclosure requirements include:
i) On what basis loans and trade receivables are accounted for?
ii) What method is used to determine lower of cost or fair value of nonmortgage loans held for sale?
iii) If a company has loans, other receivables, interest-only strips, or retained interests in securitizations, how they classify them and what method they use for accounting for these items?
iv) How the company recognizes interest income on loan and trade receivables? They must also include a statement which clearly states the company's policy for treatment of related costs & fee, along with the method of amortizing net deferred costs or fees.
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