The ASC 815 standard, established by the Financial Accounting Standards Board (FASB), governs the accounting for derivatives and hedging activities. One common derivative instrument used by businesses to manage interest rate risk is the interest rate swap. In this article, we will provide an overview of interest rate swap transactions under ASC 815 and illustrate how journal entries can be used to account for them.
The ASC 842 lease accounting standard, established by the Financial Accounting Standards Board (FASB), has brought significant changes to the way businesses account for leases. One crucial aspect of ASC 842 is the treatment of lease modifications, which can be complex and require careful consideration. In this article, we will provide an overview of lease modification transactions under ASC 842 and illustrate how journal entries can be used to account for them.
Treasury stock represents a company's own shares that have been repurchased from the market. These repurchases can be done for various reasons, such as providing shares for employee stock option plans, supporting stock price, or preventing hostile takeovers. ASC 505, Equity, provides guidelines on accounting for treasury stock transactions. In this article, we will discuss the treatment of treasury stock under ASC 505 and provide journal entries to help illustrate the accounting process.
Companies often invest in debt and equity securities as part of their investment strategies, which may be subject to fluctuations in value due to market conditions and other factors. ASC 320, Investments - Debt and Equity Securities, provides guidelines on accounting for investments in debt and equity securities, including the recognition, measurement, and presentation of impairment losses. In this article, we will focus on the impairment of debt securities and explain the associated transactions with relevant journal entries.
Deferred tax assets (DTAs) arise when a company has temporary differences between its financial accounting income and taxable income, resulting in deductible amounts in future periods. ASC 740, Income Taxes, provides guidelines on the recognition, measurement, and presentation of income taxes, including the treatment of deferred tax assets and the need for a valuation allowance. In this article, we will discuss the concept of a deferred tax asset valuation allowance and provide journal entries to help illustrate the accounting treatment.