GFS part 2

Who is responsible for opening a new bank account?

• GL accountant
• Regional Treasury Operations Team
• Controlling

What are Non-Preferred Banks?

• Banks that meet minimum credit rating criteria and ability to sweep cash balances to a preferred bank
• Banks with low trust rating
• Banks with limited number of services

3M's global payment design requires all payments initiated by?

• Bank portal
• Special treasury software
• SAP

What does it mean if we can see book overdrafts on account 305400 (cash reclass)?

• Payments made by the bank which exceed 3M’s available balance
• Outstanding checks issued by 3M, which are not yet presented for clearance
• Both answers

What are the differences between checks and a draft?

• There are no differences
• For checks, once a check has been released, 3M has relinquished control over the use of that cash. For drafts, control over the cash is not relinquished until the draft is presented for payment
• A draft is payable upon demand

How often 3M required to reassess the appropriateness of the initial marketable debt security classification?

• Quarterly
• Every month
• Once every 6 months

Which mentioned items had to meet the conditions in scope for lease agreements?

• Lease term +1 month and contract value greater than $5k
• Lease term +12 month and contract value greater than $8k
• Lease term +12 month and contract value greater than $15k

What is the definition of embedded lease?

• Contract concerned assets purchased partially from vendor but still in use in process of contact by lessee
• Agreement that includes a lease even though the agreement itself does not use the word "lease."
• Arrangement contained that vendor would sell assets used in traction on a specified date after end of contract date

What are examples of the assets most leased commonly at 3M?

• Intangible assets, IT equipment, leases of inventory
• Assets under construction, vehicles, IT service agreements
• Real estate, apartments for employees,contract manufacturing

Non-operating income example is:

• Construction Period Interest (CPI) - corporate interest expense that is reclassified to Capital Accounts and thus increases a capital asset account value and decreases the interest expense charge
• Long-lived asset impairment charges and charges due to the acceleration of depreciation
• Currency exchange gains and losses