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Shorter of the non-cancelable lease term or unique useful life of the asset 0 1. The Division of Reserve Bank Operations and Payment Systems has assigned specific maximum estimated useful lives to the following assets: Ten 10 year useful life, zero salvage value 1 Unisys check processing equipment and 2 currency storage containers.
Study 47 chapter 14 Accounting and Financial Statements flashcards from Cari W. on StudyBlue. See chapter 12 for information about getting publications and forms. Accounting Periods When preparing a statement of income and expenses (generally your income tax return), you must use your books and records for a specific interval of time called an accounting period. Chapter 4: Governmental Accounting, Financial Accounting for Local and State School Systems, Edition.
Fifteen 15 year useful life: Twenty 20 year estimated useful life: Twenty five 25 year estimated useful life: Forty 40 year estimated useful life: Peripheral equipment that is expected to have the same useful life as a mainframe computer should be depreciated over the life of the mainframe.
However, if the useful life of such equipment is projected to be different from that of the computer, the equipment may be depreciated over a different period provided the equipment is not dedicated to, or an integral part of, the mainframe.
Return to table An operating lease is defined as a lease contract that allows the use of an asset, without conveying rights of ownership, such as tenant leases and equipment. Minimum rental payments include those called for by the lease agreements, such as broker commissions, tenant improvements, incentive Chapter 14 accounting publications and, rent escalations and CPI adjustments, and exclude executory costs insurance, maintenance, and taxes and contingent payments.
The non-cancelable lease term should include all free rental periods granted. Improvements should be capitalized and amortized as discussed in paragraphs For example, if a Reserve Bank enters into a lease agreement with a rent escalation clause, the Reserve Bank's monthly rental expense or income will be equal to the total rent that will be paid over the minimum non-cancelable lease term divided by the number of months in the minimum non-cancellable lease term.
The difference between the rental expense or income and the actual rent payment will be recognized as a liability in the Sundry Items Payable SIP account or an asset in the deferred charges account and as an offset to the liability or asset as the payments escalate.
Terminating or restructuring operating leases equipment or facility related to restructuring events: Lease termination costs should be accrued when a lease contract is terminated.
Termination of the contract is determined by the contract provisions i. If a lease is being restructured, a liability for costs that will continue to be incurred under the lease contract without economic benefit to the Bank shall be recognized when the Bank ceases using the asset cease-use date.
In general, this liability should be the present value of remaining lease payments after the cease-use date reduced by estimated sublease rentals that could be reasonably obtained for the asset, even if the Bank does not intend to enter into a sublease. If the value of the sublease rentals exceeds the lease costs, no liability or asset is recognized.
A lease that is entered into that transfers substantially all the benefits and risks of ownership of property to the Reserve Bank is a capital lease and should be accounted for as the acquisition of an asset and the incurrence of an obligation.
The lease transfers ownership of the property to the lessee by the end of the lease term. The lease contains a bargain purchase option. This is a provision that allows the lessee to purchase the leased property for a price sufficiently lower than the expected fair value of the property and the exercise of which appears reasonably assured.
The lease term is equal to 75 percent or more of the estimated economic life of the leased property. The estimated economic life is the estimated remaining period during which the property is expected to be economically usable for the purpose for which it was intended at the inception of the lease.
This criterion should not be used if the beginning of the lease term falls within the last 25 percent of the total estimated economic life of the leased property.
The present value of lease payments equals or exceeds 90 percent of the excess of fair value of the leased property over any related investment tax credit retained by the lessor. If the lease has been determined to meet any one of the four criteria above and has passed the materiality test, the transaction should be treated as the acquisition of a capital asset.
If the lease meets either criterion 1 or 2 listed above, the asset should be depreciated as any similar capital asset would be, otherwise, the asset should be depreciated over the lease term. The amount capitalized should be equal to the lesser of the current fair market value of the asset or the present value of the lease payments and the payment called for by the bargain purchase option if any.
The present value of the lease payments should be calculated using the current Treasury borrowing rate for a term comparable to the lease term unless the interest rate implicit in the lease, as computed by the lessor, is both readily determinable and less than the current Treasury borrowing rate.
At the time of capitalization, a liability in the Sundry Items Payable account see paragraph Additionally, a portion of each lease payment should be treated as interest expense at the time each payment is made such that a constant periodic rate of interest is in effect over the life of the lease.
The interest rate used should be the same as that used in determining the present value of the lease payments.CHAPTER 14 FINANCING LIABILITIES: BONDS AND LONG-TERM After reading this chapter, In this chapter, we focus primarily on the accounting for debenture bonds which are the most common types of bonds.
Characteristics of Bonds. STATE OF DELAWARE Office of Management and Budget BUDGET AND ACCOUNTING POLICY Payroll Compliance Chapter 14 – Payroll Compliance vdoc Page 6 of 8 Reference: Publication B – Employer’s Tax Guide To Fringe Benefits. DOWNLOAD CHAPTER 14 ACCOUNTING TEST ANSWERS chapter 14 accounting test pdf DoD Financial Management Regulation Volume 2B, Chapter 5 * December CHAPTER 5 RESEARCH, DEVELOPMENT, TEST, AND EVALUATION APPROPRIATIONS Publication 17 (), Your Federal Income Tax | Internal.
Accounting II chapter 14 definitions and problems. Total Cards. Subject. Accounting. Level. Undergraduate 2. Created. 03/23/ Click here to study/print these flashcards. Create your own flash cards! Sign up here. Additional Accounting Flashcards. Cards Return to Set Details. OFM Publications.
Reports/Statements. Agency Financial Reports; Chapter Managerial Cost Accounting Chapter Grants and Subsidies Chapter Payroll, Benefits, and Allowances Chapter Records Management Chapter Gifts and Bequests Glossary: Glossary of Accounting Principles and Standards Terms.
Chapter Partnerships - Formation and Operation. Defined: A partnership is an association of two or more people or organizations .