Circumstances Where an "Emphasis of a Matter" Paragraph May Be

question 59

Multiple Choice

Circumstances where an "emphasis of a matter" paragraph may be necessary include

• A)an uncertainty relating to the future outcome of exceptional litigation or regulatory action
• B)early application (where permitted)of a new accounting standard that has a pervasive effect on the financial statements after its effective date
• C)a major catastrophe that has had,or continues to have,a minor effect on the entity's financial position
• D)significant transactions with related parties
• E)unusually frequent subsequent events
• F)both A and D
• G)both B and C
• H)both D and E

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Definitions:

Goodwill

The intangible asset that arises as a result of the acquisition of one company by another for a premium value, representing aspects like brand, customer base, and reputation.

Tangible Capital

Physical assets owned by a firm that are used in the production process, such as machinery, buildings, and equipment.

Nonresidential Structures

Buildings and constructions excluding residential homes, often commercial, industrial, or public use facilities.

Human Capital

The economic value of a worker's experience and skills, including factors like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.