AC 551 Case 13-5 Occupy Mall Street
FOR MORE CLASSES VISIT www.ac551rank.com Occupy Mall Street Occupy Mall Street (OMS or the ―Company‖) is a leading real estate management firm that owns and manages over 100 shopping malls across the United States. The Company went public in 2009 and experienced a continued increase in stock price through 2011. With the sustained growth of the business and rising stock price, OMS developed a practice of granting annual stock option awards to its executives at the beginning of each year. On January 1, 2012, OMS granted 1,000 employee share options that cliff vest after a four-year service period, with an exercise price of $30 per share. Using the Black-Scholes pricing model, the Company determined that the grant-date fair-value-based measure of the awards was $15. On the grant date, the Company’s stock was trading at $30 per share. On January 1, 2014, to provide additional retention incentive to its employees for the third and fourth years of service of the 2012 annual grant, OMS will change the terms of the award by modifying the exercise price to $20 per share. Using the Black-Scholes pricing model, management determined that the fair-value-based measure of the awards was $12 after modification and $9 before the terms of the award were modified. The modification did not affect any of the other terms or conditions of the awards. Note that no forfeitures are assumed for the purposes of this case. Required: 1. How much compensation cost should OMS recognize in each year of the award’s service period?
2. How would the accounting for these awards change if the modification to the terms (i.e., exercise price) of the award was made on January 1, 2017, after the awards have become fully vested? Additional Case Facts: Assume the same facts as described above. However, the terms of the award also include a performance condition in which the awards will vest if cumulative net income over the four-year vesting period is greater than $10 million. On December 31, 2013, because of the loss of several tenants, projected cumulative net income over the four-year period had been revised down to $9 million. As a result, management determined that the performance condition had become improbable to achieve. On December 31, 2014, management’s conclusion that the award’s performance condition was improbable of achievement had not changed. In response to this, management reduced the performance condition of the original award to $8 million of cumulative net income over the four-year period. Using the Black-Scholes pricing model, management determined that the fair-value-based measure of the awards was $12 upon modification. The modification did not affect any of the other terms or conditions of the awards; thus, the modification did not affect the option’s per-share fair-value-based measure. Note that OMS had actually achieved $9.2 million of cumulative net income over the four-year period. Required: 3. How would the Year 2 accounting change if management determined that the performance condition was improbable of achievement on December 31, 2013? What would be the cumulative amount of compensation cost recognized?
4. How much compensation cost would management recognize in Year 3 and Year 4 if the December 31, 2014, modification resulted in the awards becoming probable of achievement? Additional Case Facts: Assume the same facts as described above. However, contemporaneously with the December 31, 2014, modification, OMS will lose a major tenant to bankruptcy; this loss will have a detrimental effect on the Company’s financial results for the year ended December 31, 2014. Even though OMS modified the options to reduce the performance target, loss of the significant tenant prompts OMS to maintain that the achievement of the performance target is improbable (i.e., the options are not expected to vest under the original or modified terms). Required: 5. If the awards continued to be improbable of achievement after modification, how much cumulative compensation cost would be recognized through December 31, 2015? December 31, 2016? ===============================================
AC 551 Unit 1 Assignment Chapter 1 – 5, 7, 10, 13, 16, 19
FOR MORE CLASSES VISIT www.ac551rank.com AC 551 Unit 1 Assignment Chapter 1 – 5, 7, 10, 13, 16, 19 ===============================================
AC 551 Unit 2 Assignment Chapter 2
FOR MORE CLASSES VISIT
www.ac551rank.com Question # 2 Discuss the highest level of thinking according to Bloom’s taxonomy. Question # 4 Discuss how critical thinking relates to the term professional skepticism. Question # 7 Discuss the AICPA list of effective writing characteristics. Which are editing skills, and which are composing skills? Exercises # 14 Insert the correct punctuation. ===============================================
AC 551 Unit 2 FASB Codification
FOR MORE CLASSES VISIT www.ac551rank.com Firm-fixed price contract Amortized Cost Impairment Are there SEC documents as a part of this Codification? ===============================================
AC 551 Unit 3 Assignment Chapter 3 (Questions 4, 7, 12, 15, and 16, Exercise 7)
FOR MORE CLASSES VISIT www.ac551rank.com Assignment 1: Complete the following for Chapter 3: Questions 4, 7, 12, 15, and 16; Exercise 7.
What is the FASB conceptual framework project? Explain the benefit of this project to the practitioner. Give examples of authoritative and nonauthoritative U.S. GAAP. Authoritative: based on the assumption or concept of financial or government accounting. Nonauthoritative: based on accounting literature not necessarily accounting principles. What constitutes U.S. GAAP? How can the promulgation of an accounting standard impact economic behavior? Discuss a specific example. Distinguish between primary authoritative support and secondary authoritative support. ===============================================
AC 551 Unit 3 FASB Codification
FOR MORE CLASSES VISIT www.ac551rank.com 1. Identify the six topical areas where some 90 topics are located. 2. In the master glossary, determine if the FASB considers options as securities or as cash. Explain your position. 3. According to guidance in the Codification, how should one account for the direct and indirect costs of growing crops? In what Codification section did you find this information? 4. What two methods are identified in the Codification as appropriate in accounting for long-term construction contracts? Where in the Codification did you find this? ===============================================
AC 551 Unit 4 Assignment FASB Codification (Case 13-1,
Refer a Friend Program)
FOR MORE CLASSES VISIT www.ac551rank.com 1. How should the $25 Referral Credit be recorded in Runway’s Income Statement— as a reduction of revenue or as a marketing expense? 2. When would Runway record the $25 Referral Credit? What are the entries Runway would record when the $25 Referral Credit is earned by the Existing Customer? What are the entries Runway would record when the $25 Referral Credit is redeemed against a $100 purchase made by the Existing Customer? 3. Runway is planning to adopt IFRSs in the near future. What is the relevant? ===============================================
AC 551 Unit 4 Assignment Questions
FOR MORE CLASSES VISIT www.ac551rank.com Question 8. Does the Codification contain all GAAP authorities? Explain Question11. What are the SEC accounting authorities? Where are they located? Questions 12. Does the Codification contain SEC authorities? If so, what authority does the Codification have over SEC content? Exercise 3. Use the topical categories in the left navigation panel of the Codification to identify the first three subtopics within the general topic of Presentation
Codification) governing each of the followings: Exercise 19. Use the codification to find which expenditures qualify as a research and development cost (be sure to cite where you found the answer within the Codification). ===============================================
AC 551 Unit 5 Homework Assignment FASB Codification Case (Case 13-5 Occupy Mall Street)
FOR MORE CLASSES VISIT www.ac551rank.com Case 13-05 Occupy Mall Street Occupy Mall Street (OMS or the ―Company‖) is a leading real estate management firm that owns and manages over 100 shopping malls across the United States. The Company went public in 2009 and experienced a continued increase in stock price through 2011. With the sustained growth of the business and rising stock price, OMS developed a practice of granting annual stock option awards to its executives at the beginning of each year. ===============================================
AC 551 Unit 6 Codification Case Venus Cellular
FOR MORE CLASSES VISIT www.ac551rank.com Analysis of Statement of Comprehensive Income: Venus Cellular Venus Cellular Limited (―Venus‖) is the leading, worldwide provider of a wide variety of telecommunications equipment and services. Its telecommunications equipment and services enable its customers to send or receive virtually any type of voice or data transmission. Its customers include fixed line and wireless telecommunication
operators, Internet service providers, governments, and businesses. Venus prepares its financial statements in accordance with International Financial Reporting Standards (IFRSs). Question 1 — Identify whether the analysis of expenses in profit or loss is presented by nature or function. • Question 2 — Identify the alternative performance (operating) measures presented in the statement of comprehensive income and document your conclusions with regard to the appropriateness of the various performance measures. • Question 3 — Discuss any additional issues you have identified or other observations. ===============================================