GFS part 5

Refurbishment costs related to assets with an original cost where

• <$5000 are expensed
• >$5000 are expensed
• Between $5000 and $10000 are expensed

An electronic Authorization for Expenditure (eAFE) is required for all customer contracts involving an equipment component:

• Greater than $500,000 USD
• Up to $500,000 USD
• Less than $500,000 USD

Which of the following is not true: Equipment built or procured for sale which is capitalized is held in account 2711000 - Asset Equipment for Sale

• If the equipment is sold to an established customer, the sale is recognized in revenue as a regular sales transaction and not as proceeds from the sale of an asset
• Assets < $5,000 may be capitalized at a summary level
• Refurbishment costs related to assets with an original cost >$5000 are expensed

Treasure requirement are financial arrangements such as:

• Cash advances, & loans
• Loan guarantees must not be undertaken by individual legal entities and divisions
• Other mentioned are correct

Cross border manufacturing includes situations where:

• 3M contracts with a third party and 3M inventory is sent into another country
• 3M operates as first party and 3M inventory remains in the same country
• 3M is responsible for knowing where its inventory is located and that all import requirements are met, even when a third party sends it across country borders

Contractual Requirements involve:

• A contract must be in place at the time to initiating services when required by Sourcing policy
• Sourcing is responsible for contracting with the 3rd parties. Appropriate legal, manufacturing, trade compliance and financial individuals must be involved in the contracting process
• The contract may need to be reviewed for contractual guarantees as these may affect disclosure requirements on 3M’s financial statements

Unreconciled Items greater than $50,000 but less than $1 million must be supported or cleared:

• At the same month
• At the following month
• Within the quarter

Account grouping parameters involve:

• The grouping must align with 3M’s reporting to ensure no account misclassification
• The GSC RTR Management is accountable for determining the strategy for grouping and Area Controllers are responsible for ensuring the groups are not aggregated across the externally reported lines
• Each individual account within the group must be fully reconciled and the supporting documentation for each account balance must be clear within the template

Prior to implementation, the revised risk ratings must be approved

• By the Area Controller, who may increase the risk level assigned to an account to “high” based on management judgement
• By the Global Process Lead, Global Finance Compliance Manager, Global SOX Manager and a representative of the GSC RTR Internal Control Managers who review and approve the overall result
• Other mentioned are correct

How can you calculate an impairment?

• Step 1:Determine whether an impairment exists. This is when the sum of the undiscounted future cash flows (UFCF) over a certain time period is less than the net book value of the assets. Step 2: calculate the loss where impairment exists. This is where the net book value exceeds the fair market value of the assets. This is where the fair market value exceeds the net book value of the assets
• Step 1:Determine whether an impairment exists. This is when the sum of the undiscounted future cash flows (UFCF) over a certain time period is less than the net book value of the assets. Step 2: calculate the loss where impairment exists. This is where the net book value exceeds the fair market value of the assets
• None of the mentioned