Acc 420 – H
April 2nd, 2015
Reflection Paper Exam 2
During this portion of class, I have learnt a lot new accounting concepts and standards about Leases, Pensions and taxes. All this new information will be helpful later on when making investment and credit decisions. In chapter 15, I have learnt that there are two types of leases; capital and operating lease. And I have also learnt how to classify any lease and explain the basis for each of the criteria and conditions used to classify these leases. E.g. One of the four criteria for a capital lease specifies that the lease term be equal to or greater than 75% of the expected economic life of the leased property. The remaining three criteria are if the present value of the minimum lease payments were equal to or greater than 90% of the fair value of the asset or there is transfer of ownership and finally if the lease has a bargain purchase option. In this chapter I have also learnt how to account for any type of lease whether from a lessee or a lessor perspective and Record all transactions associated with those leases by both the lessee and lessor.
In Chapter 16, I have learnt how to account for income taxes. I can now describe the types of temporary differences, which originate in one period and reverses, or turns around, in one or more later periods, and cause deferred tax liabilities. Deferred taxes are a huge topic and many things to cover, in class we learnt why permanent differences have no deferred tax consequences and how a change in tax rates affects the measurement of deferred tax amount.
In Chapter 17, I have learnt about pension plans and other post-retirement benefits. To begin with, there are five components of post-retirement benefit expense and those are (1) Service cost, (2) interest cost (3) expected return on plan