REQUIRED

Listed below are 5 case scenarios involving accounting issues. For each one, you are to use the Accounting Standards Codification (ASC) database to determine the precise reference that represents the most specific authoritative guidance in US GAAP. Your answers for each part should indicate one specific ASC reference.

Example: Your Company has asked you to prepare the footnotes for its 2014 annual report. Identify the authoritative guidance that indicates what information the footnote on accounting policies should present.

The appropriate ASC Reference is 235-10-50-3.

Case A: Your Company has been accounting for depreciation of equipment on a straight-line basis. You are considering switching to an accelerated depreciation method. Identify the authoritative guidance that indicates how such a change in depreciation method is accounted for under GAAP.

Case B: Your Company makes investments in other companies (investees) in which it has significant influence, but not majority ownership. It uses the equity method of accounting for these investments. Identify the authoritative guidance that indicates your company should account for its share of the earnings or losses of these investees in the periods they are reported by the investees in their financial statements.

Case C: Since some goods in our inventory are no longer as great as their cost, our company adjusts the value to lower of cost or market. Identify the authoritative guidance that indicates which amount is considered the new cost basis for subsequent accounting purposes.

Case D: Your Company speculates with small investments in equity securities of other companies and classifies them as trading securities. Identify the authoritative guidance that indicates unrealized holding gains for trading securities should be included in earnings.

Case E: Your Company disposed a component of its business at the end of 2017. During that year, the component had an impairment of goodwill on its balance sheet. Identify the authoritative guidance that indicates how your Company should report this impairment of goodwill in its 2017 income statement.