Question 1 (15 POINTS)

The FASB recently released the following two Accounting Standards Updates (ASU) and an ASC, as listed below

:

ASU 2014-08, Reporting of Discontinued Operations and Disclosures of Disposals of Components of Entities

ASU 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items and

ASC 606 Revenue Recognition Standard ( May 2014)

For each of these, answer the following questions (can use Codification site to refer to standards):

a) Why did the FASB issue this ASU/ ASC (i.e., how is it an improvement)?

b) What are the main provisions of the ASU/ASC and how are these different from current GAAP?

Question 2: What are accounting changes and why is it an issue? List and define the three types of accounting changes. Include in which statement the changes are presented and where in the statement. (5 POINTS)

Question 3: Under current US GAAP (ASU 2011-05): (10 POINTS)

a) What is meant by Comprehensive Income?

b) How should Comprehensive Income be presented in the financial statements?

Questions 4: How is fair value defined in SFAS No. 157 (5 POINTS)