Identify and explain in detail the FASB, according to US GAAP, that applies to the types of contingencies and explain in detail how a contingency is defined and classified. Explain in detail, what criteria are used to decide whether a contingency should be recorded as a liability, disclosed in the notes or ignored. Provide an example of a situation in which a company must recognize a contingency and another in which it must only disclose it, indicating in each case the specific US GAAP criteria.
Identify and explain in detail the FASB that corresponds to the Business Combination and how the purchase method is applied in an acquisition. Provide and explain in detail, a practical example of a recent (last five years) acquisition of a company, explaining how the assets acquired and liabilities assumed were valued and what impact it had on the consolidated financial statements.
Explain in detail, how companies should treat financial or commercial commitments, including forward inventory purchase agreements or lease agreements, and cite the applicable FASB. Give an example, and explain in detail, where a commercial commitment does not require immediate accounting recognition, but does require disclosure in the financial statements.
Explain the accounting treatment of a āgain on purchaseā or goodwill in a business combination and cite the applicable FASB ASC. Provide an example where the company pays less than the assets acquired are worth and one where it pays more, and identify and explain the required entries in the accounting records.
Identify and explain in detail the FASB that corresponds to pending or potential litigation and how companies should estimate and document their potential losses. Describe, in detail, an example of a legal claim where the company is required to record a liability and one where only disclosure is required.
Discuss, in detail, the importance of disclosing details such as the nature of the transaction, the justification for paying a premium, and how the assets and liabilities acquired in a business combination were valued and cite the applicable FASB. Provide a recent (last five years) example of a business combination and explain, in detail, how specific disclosures help investors and other stakeholders evaluate the impact of the acquisition on the company's results.