This essay focuses on the American Accounting Association.In order to complete this assignment, it will be necessary for you to access the FASB Codification website through the American Accounting Association.
In order to complete this assignment, it will be necessary for you to access the FASB Codification website through the American Accounting Association. You may login at http://aaahq.org/ascLogin.cfm using the following user ID and password:
User ID: AAA51369
After you login, take the following steps:
On the “Thank You” page click on “FASB Accounting Standards Codification.” Ignore the second option entitled, “GASB Governmental Accounting Research System Online”.
Accept the license agreement by clicking on “I accept” button at the end of the document.
This will bring you to the homepage entitled, “FASB Accounting Standards Codification Professional View.”
Below the “What’s New” section in the middle of the screen is a “Help” and “Feedback” section. Under the “Help” section, click on “How to Use the Codification.” This will bring you to another screen entitled, “FASB Codification Learning Guide for the Codification Research System Professional View.”
Directly following this introductory section is Lesson 1, “Getting Started with the Codification.” Chapter 1 may be found on pages 1-9. Please read Chapter 1 fully. It will provide you with a brief overview of the Codification.
The last section of Chapter 1 (after the lesson summary) is entitled, “Reinforce your Learning.” It contains three parts consisting of questions, an exercise (1), and a problem (1). Please answer each of these 3 sections. After you complete this, go to Appendix A of the Learning Guide. Appendix A contains the solutions to all the questions, exercises, and problems in the Learning Guide. It is on Pages 185-205. Compare your answers to the ones in the answer key to ascertain that you answered correctly.
Please read the case study below and use the Codification Research System to search for the solution to the issues raised at the end of the discussion in the “Required” section.
Go the left side of the opening page, under the browse codification section, and place your cursor on the equity topic (505) and move it to the right until the drop down menu of subtopics appear.
b) Click on the equity subtopic entitled, “Equity-based payments to non-employees” (50).
c) Then go to section 30 entitled, Initial Measurement. Click on it to bring you to the appropriate paragraphs indicated below.
d) Read paragraph 505-50-30-2.
e) Then go to paragraph 505-50-30-6 and read it carefully.
f) In formulating your response, please cut and paste those paragraphs noted above that you used to derive your answer.
8. You may want to experiment and see what happens if you use the search engine instead in the upper right hand section of the opening page and input “equity based payments to non-employees –initial measurement” to solve this problem.
9. You may use your notes, any discussions we had in class, as well as any other
sources to answer the question at the end of the case. In addition, in answering the question, you are required to provide ASC citation support as well as an explanation as to why you reached the conclusion you did.
THE CASE AND QUESTIONS YOU MUST ANSWER MAY BE FOUND BELOW:
WHAT HAPPENS WHEN YOU BARTER WITH STOCK?
Does It Matter Whether It’s Treasury Stock or Newly Issued Stock?
Clyde: I acquired this land for my business by issuing stock. I did not pay a penny. Since it’s my stock, and I decided how much to give up for the land, does that mean I get to determine the value of the land on my balance sheet?
Fredrika: You could have issued the stock to somebody else, taken the cash received, and paid for the land, right?
Clyde: I suppose I could have, but I did not.
Fredrika: The fact that you could have does imply there is some value for the stock and that it can be determined by referring to the market for that stock.
Clyde: I also bartered for some equipment. I exchanged some treasury stock for those assets. I suppose you are going to suggest that I could have reissued that treasury stock to somebody else, taken the proceeds, and purchased the equipment instead. While I could have, I did not.
Fredrika: What exactly did you expect the advantage to be of bartering with treasury stock? For that matter, why did you issue stock for the land rather than merely pay cash?
I mean, when you pay cash, that is the amount paid -— open and shut. Whereas, when you barter with goods, services, or in my case stock, don’t I have some discretion then?
Fredrika: Do you believe you paid a fair price in stock?
Clyde: Certainly. I mean, I would not have given up the stock unless I thought I received fair value in exchange. Are you telling me that the identical value would be recorded in my barter exchanges as if I had given up cash instead of stock or Treasury Stock?
Does Clyde have more discretion in the recording of his bartering exchanges than he would have had by paying cash? Use the FASB’s Accounting Codification System to answer this question and briefly explain why. Provide the specific citation(s) paragraphs that support your answer by cutting and pasting them from Accounting Standards Codification. Do you think it matters whether treasury stock or newly issued stock is used?