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Wiley GAAP 2008 by Colorado Steven M. Bragg Englewood, Ralph Nach American Express Tax and Business Inc., Barry J. Epstein

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Concepts, Rules, and Examples

The Mixed Attribute Model

Under longstanding US GAAP, assets, liabilities, and equity are measured and presented on a reporting entity's balance sheet by applying a disjointed, inconsistent assortment of accounting methods. This current state of affairs is sometimes referred to as the “mixed attribute model.” The following table summarizes the current state of the mixed‐attribute model and the effects of FAS 157 and FAS 159 (if any) on the specified assets and liabilities.

Assets  Liabilities and Equity 
Key1 CaptionCustomary measurement attributeKey1 CaptionCustomary measurement attribute
ACash and cash equivalentsCost, approximating fair valueENotes payableUnamortized principal plus accrued interest
EAccounts receivableEstimated net realizable valueAAccounts payableContractual price agreed upon by the parties; depending on the contractual terms, often will approximate fair value
ENotes and loans receivableUnamortized principal due less allowance for credit lossesAPayroll taxes withheld and accrued; sales taxes payableAmounts due to taxing authorities; due to short periods during which these amounts are outstanding, they usually approximate fair value without being discounted
NInventoryLower of cost or market using FIFO, LIFO, average cost, or specific identificationNIncome tax liabilities currently payableAmounts due to taxing authorities based on positions claimed on income tax returns field or to be filed
NDepositsCost less portion applied by the holder ...

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