CIRO Financial Reporting & Disclosure 3

Question 1

Under GAAP, which criterion must be met for a segment to be separately reportable under ASC 280?

Accepted Answer

The segment meets any one of three quantitative thresholds: 10% of revenue, profit/loss, or assets

Answer

ASC 280 requires separate disclosure of an operating segment if it meets any one of three 10% tests: revenue, reported profit or loss, or combined assets.

Question 2

What is the significance of the 'going concern' assessment in financial reporting?

Accepted Answer

It evaluates whether a company can continue operations for at least 12 months from the financial statement issuance date

Answer

Under ASC 205-40, management must evaluate whether substantial doubt exists about the entity's ability to continue as a going concern for one year after the financial statements are issued.

Question 3

In the context of fair value measurement under ASC 820, a Level 3 input is best described as:

Accepted Answer

Unobservable inputs based on the entity's own assumptions

Answer

Level 3 inputs are unobservable and reflect the entity's own assumptions about what market participants would use to price the asset or liability.

Question 4

Which document must an IR officer review to ensure the company's proxy statement complies with SEC disclosure rules?

Accepted Answer

Regulation S-K

Answer

Regulation S-K prescribes the non-financial statement disclosure requirements for SEC filings, including proxy statements covering executive compensation, governance, and other narrative disclosures.

Question 5

A company has a significant subsequent event that occurs after the balance sheet date but before the financial statements are issued. Under ASC 855, a 'recognized' subsequent event requires:

Accepted Answer

Adjustment to the financial statements to reflect new information about conditions that existed at the balance sheet date

Answer

Recognized subsequent events provide additional evidence about conditions that existed at the balance sheet date and require adjustments to the financial statements themselves.

(CIRO) Certified Investor Relations Officer Practice Test

(CIRO) Certified Investor Relations Officer Practice Test

CIRO Financial Reporting & Disclosure 3