An Interest Rate Swap Is a Succession of Forward Contracts

question 11

True/False

An interest rate swap is a succession of forward contracts on interest rates arranged by two parties that allows for the exchange of fixed interest payments for floating payments; as such it allows a FI to place a long-term hedge.

Recognize and compute income effects of intra-entity land sales between parent and subsidiary.

Understand the impact of upstream and downstream inventory transfers in consolidated financial statements.

Calculate the net income attributable to the noncontrolling interest in a consolidated entity.

Prepare financial statement consolidations including adjustments for intra-entity transactions.

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Definitions:

Cost

The amount of money required to purchase something or the expense associated with creating a product or service.

Selling Price

The amount of money for which a product is sold to the consumer.

Completed-Contract Method

An accounting strategy where revenue and expenses of a long-term project are deferred until the project is completed, at which point they are recognized in the fiscal period of completion.

Partial Billings

The invoicing of a portion of the amount due for goods or services before the work is fully completed.