A - For the next set of questions, answer each question using the FASB Codification and cite your source down to the paragraph(s).
1) In determining whether the equity method should be applied to an investment in common stock, an investor should consider whether it can exercise significant influence. Significant influence is characterized by certain quantitative factors (20% ownership) and qualitative factors. What are two of the qualitative factors an investor should consider?
2) Are investments in life insurance within the scope of derivative accounting guidance?
3) What is the initial measurement objective when recording guarantees?
4) When should an entity record the effects of changes in tax laws and rates in recording its income taxes?
5) Should the cash surrender value of life insurance policies be classified within current assets on the balance sheet?
B - Identify the ASC reference – down to the paragraph level of detail- that you would look to for guidance.
1) The requirement that entities shall disclose all significant accounting policies in the financial statement footnotes.