Intermediate accounting:
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| Main Authors: | , , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
New York <<[u.a.]>>
McGraw-Hill
1995
|
| Edition: | 5. ed. |
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Physical Description: | XXVIII, 1201 S. Ill., graph. Darst. |
| ISBN: | 0070110875 |
Staff View
MARC
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| 100 | 1 | |a Chasteen, Lanny G. |e Verfasser |4 aut | |
| 245 | 1 | 0 | |a Intermediate accounting |c Lanny G. Chasteen ; Richard E. Flaherty ; Melvin C. O'Connor |
| 250 | |a 5. ed. | ||
| 264 | 1 | |a New York <<[u.a.]>> |b McGraw-Hill |c 1995 | |
| 300 | |a XXVIII, 1201 S. |b Ill., graph. Darst. | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 650 | 4 | |a Accounting | |
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| 700 | 1 | |a Flaherty, Richard E. |e Verfasser |4 aut | |
| 700 | 1 | |a O'Connor, Melvin C. |e Verfasser |4 aut | |
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Record in the Search Index
| _version_ | 1804138143280005120 |
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( Preface xxj
Chapter, I Financial Accounting and Reporting: An Introduction
m^wjpm and Historical Development 1
l^E^KT to. THE ENVIRONMENT AND ROLE OF FINANCIAL ACCOUNTING AND
sJ^NfmSSJJ REPORTING 2
H^J^U|5^H| The economic environment 2 Uses and users of financial accounting
^^^^^^H^^^^H information 3 The economic environment and its relationship to financial
^^^^^^^^^^^H accounting and reporting 4
^^^^K^^H THE NATURE AND CONTENT OF FINANCIAL ACCOUNTING AND
^^^HE^^H REPORTING 8
^^^^Hl^^^^J Generally accepted accounting principles (GAAP) 8 The importance of ethics in
^^H^^^^^^H financial accounting and reporting 10 Financial reporting in relation to other
^^^^^^^^^^^ information used in decision making 11
THE HISTORICAL DEVELOPMENT OF FINANCIAL ACCOUNTING AND
REPORTING 13
The pre-formal-theory era 13 The problem-solving era 14 The conceptual
framework era 17 Standard setting as a political process 21 Other groups that
influence theory and practice 22 International standard-setting developments 24
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 25
Questions 26 Cases 27 Exercises 32
Chapter jL Financial Accounting and Reporting: A Theoretical
m^^^^^^^^^^— Structure 34
HP^^^^^^Z^H ENVIRONMENTAL ASSUMPTIONS 37
E^^gll^^HSJSSSS^Sl Tne accounting entity assumption 37 The periodicity assumption 37 The going
lt^|M^*^pBwS^^jKg concern assumption 37 The monetary assumption 38
^^JJ|E^^^^^^M9| OBJECTIVES OF FINANCIAL REPORTING 38
¦lMk2595NMHflB Characteristics and limitations of financial statement information 38 The role and
VM§!Ji^MMaiZia!Z^K^^9 objectives of financial accounting and reporting 39
Contents
rORZoNC4rACTERIST1CS °F USEFUL ACCOUN™G
rs:f:ro:rP^;TSEs for ™e *™*™ -
=r p. , d8teminingp jz% pzSeu^;srd=:r
SSSSSS^ - 008 °F ™ANC ^ STATEMENT
Disclosure 65 Methods of presentation 67
xr6r ssrysK A,r concept * *»«,« 68
„ ChaPter3 The Accounting Process a » •
^Ciifl ^31^^^-^ rrocess: A Review 87
balance 120 Reversing entries 121 ? PreParin9 a postclosing trial
Chapter 41 th i
,? ^ E^Tsfatement Md State—t of Ketaine.,
^ - ^^ ^ INC0ME MEASUREMENT 152
^,^ ;?¦- lncome-reporting issues 165 3 Earnin9s per share 164 Unresolved
Contents «j
STATEMENT OF RETAINED EARNINGS 166
Prior period adjustments 166 Combined statement of income and retained
earnings 167
SUMMARY OF PRESENTATION OF INCOME INFORMATION 167
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 167
APPENDIX 4-1: ACTUAL FINANCIAL STATEMENTS OF THE BRISTOL-MYERS
SQUIBB COMPANY 170
Questions 184 Cases 184 Exercises 187 Problems 192
Chapter 3 The Balance Sheet (Statement of Financial
Position) 197
._ . USES OF THE BALANCE SHEET 198
.t /¦^¦•v^ft CLASSIFICATION AND VALUATION IN THE BALANCE SHEET 199
~ U^~ a Jj Current assets 200 Current liabilities 202 Noncurrent assets 205 Long-term
iy liabilities 206 Owners (stockholders ) equity 207
W~~ }* UNCLASSIFIED BALANCE SHEETS 209
«f NOTES AND SUPPLEMENTARY INFORMATION 209
%-¦ Long-term commitments 211 Property, plant, and equipment 211 Accounting
policies 211 Subsequent events 212
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 214
APPENDIX 5-1: ANALYSIS OF FINANCIAL STATEMENTS 215
Questions 235 Cases 237 Exercises 243 Problems 250
Chapter O The Statement of Cash Flows 262
I ^ HISTORICAL BACKGROUND 263
j^MBS OVERVIEW OF THE STATEMENT OF CASH FLOWS 265
^299 USEFULNESS OF THE STATEMENT OF CASH FLOWS 267
¦ ¦-—__ PREPARATION OF THE STATEMENT OF CASH FLOWS 272
1 i££=~ -- ^r=r: Cash flows from operating activities 273 Cash flows from investing and financing
I il~_ 1H: activities 282 Cash flows from investing activities 282 Cash flows from
¦ §§v~EL .f - financing activities 283 Summary of statement of cash flows preparation 285
^_!_:— 3 2 . Summary of cash flow reporting objectives 285
r^II * f ! REPORTING NET CASH FLOWS FROM OPERATING ACTIVITIES—AN
r = .s - EVAluaTION 285
EVALUATION OF FINANCIAL STATEMENTS 287
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 287
Questions 288 Cases 289 Exercises 291 Problems 298
Contents
Chapter 7 Revenue Recognition and Income Determination 307
flflHflHMH AN OVERVIEW OF REVENUE CONCEPTS 309
^^HH^RflH 1~h@ revenue earning process 309 Recognition and the realization principle 309
^^HhHHH revenue recognition at the point of sale 310
^^^^^^HSK| Sales made on credit 311 Costs incurred after the point of sale 311 Return
H^H^^^BHH privileges 311 Service transactions 313
HH|^^^^H REVENUE RECOGNITION DURING PRODUCTION 314
^Hggl^^^^^^H Long-term construction contracts 314 Service transactions 323 Products
^H^^^^^^^H requiring aging 324
^^|^^^^B REVENUE RECOGNITION AT COMPLETION OF PRODUCTION 324
^^^^^^^™ REVENUE RECOGNITION DURING CASH COLLECTION 327
The installment method 328 The cost-recovery method 332 Evaluation of cash-
collection methods 333
SUMMARY OF REVENUE AND INCOME RECOGNITION CONCEPTS 333
SPECIALIZED APPLICATIONS OF REVENUE RECOGNITION CONCEPTS 334
Franchises 334 Real estate sales and retail land sales 336 Barter
transactions 337 Other industry standards 337
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 338
APPENDIX 7-1: CONSIGNMENT SALES 339
Questions 341 Cases 341 Exercises 347 Problems 353
Chapter O Cash, Current Receivables and Liabilities, and
¦^w ^mh Contingencies 363
jOl ^h^Hr| Petty cash 365 Reconciliation of cash balances 366 Cash disclosures:
tJ[jfck ^^^HB! overdrafts and compensating balances 368
H^^H^^B RECEIVABLES 369
^^^^^Hjjj^H Accounts receivable 369 Short-term notes receivable 377 Using receivables to
HH^^^^^^E^B secure immediate cash 379
KfeSMaT^atf LIABILITIES AND THEIR VALUATION 384
¦H^B^M DETERMINABLE CURRENT LIABILITIES 385
MkSHB Trade accounts payable 385 Short-term (current) notes payable 386 Dividends
payable 387 Collections for third parties 387 Accrued liabilities 388
Prepayments and deposits from customers 391
CURRENT LIABILITIES DEPENDENT ON OPERATING RESULTS 391
Income taxes payable 392 Bonuses payable 392
CONTINGENCIES 393
Loss contingencies 393 Gain contingencies 398
Contents ^j.
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 398
Questions 399 Cases 401 Exercises 403 Problems 410
Chapter Inventory Valuation: Determining Cost and Using Cost
JPB^^^^^^^^^M Flow Assumptions 424
^HH^^^^^^^H| MAJOR INVENTORY CLASSIFICATIONS 425
^^^^^^|^^^^H INVENTORY ACCOUNTING SYSTEMS 427
^^^^^^^^H^^H^^B The periodic inventory system 427 The perpetual inventory system 427 The
^^^^^^^Hjj^^^HIHS periodic and perpetual inventory systems compared 428
^^^^^m^B^^H ITEMS TO BE INCLUDED IN INVENTORY 429
^^^^^^^^QH|H^^J Goods in transit 429 Consigned goods 430 Sales on approval 430 Product
^^^^^^^^^^^•^¦^B financing arrangement 430 Conditional sales 431
INVENTORY ERRORS AND THEIR EFFECTS ON THE FINANCIAL
STATEMENTS 431
EXPENDITURES AND COST ALLOCATIONS TO BE INCLUDED IN INVENTORY
COST 433
The costs of purchased merchandise inventory and cost adjustments 434 The
costs of manufactured inventories 437
COST FLOWS AND COST FLOW ASSUMPTIONS 437
Specific identification 438 Average cost 439 First in, first out (FIFO) 440
Last in, first out (LIFO) 442 Comparative results of cost flow assumptions 442
Evaluation of the various cost flow assumptions 444 Problems in using unit
LIFO 447 A pooled approach to LIFO 447 Dollar-value LIFO 449
REPORTING INVENTORIES IN THE FINANCIAL STATEMENTS 454
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 454
APPENDIX 9-1: METHODS OF OBTAINING INVENTORY COST INDEXES 456
Questions 459 Cases 460 Exercises 462 Problems 468
Chapter 1 O Inventory Valuation: Departures from Historical Cost
MRi^i^Hi^^^PBi and Methods of Estimating Inventory Cost 480
j^BBI^^^^KKB VALUATION OF INVENTORY AT LOWER OF COST OR MARKET 480
flBB^^^Bf^^Snjj^B Rationale for ceiling and floor constraints on market 482 Applications of the
H^^^^^^^H^S^^S LCM procedure 483 LCM and conservatism 484 Recording the reduction of
^Hj^^^^^^^^^^^^B inventory to market 485 Valuing firm purchase commitments at LCM 485
j^^^^^^^^^^^^R OTHER ALTERNATIVES TO HISTORICAL COST INVENTORY VALUATION 487
j^^^^^^^^^^^^^^^H Replacement cost 487 Net realizable value 488 Standard costs 489
^^^^MHMI^^^^B METHODS OF ESTIMATING INVENTORY COSTS 489
The gross profit method 489 The retail inventory method 491 The dollar-value
retail LIFO method 497
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 501
Questions 502 Cases 503 Exercises 505 Problems 511
Contents
Chapter 1 1 Plant Assets and Intangibles: Acquisition and
^^^^^^^^_ Subsequent Expenditures 520
^^^H^^^l CHARACTERISTICS OF PLANT ASSETS AND INTANGIBLES 521
^HB^^^H VALUATION AT ACQUISITION 521
^^^^^^^^^H Plant assets 521 Intangible assets 528 Acquiring assets by issuing stock 537
^^^^^^^^^^H Donated assets 537 Lump-sum purchases 537 Exchanges of nonmonetary
^^^^^^^^^^H assets 539
^^^^Hl!g» EXPENDITURES AFTER ACQUISITION 544
H^B^HOIHH Repairs and maintenance 544 Additions 545 Replacements and
^^^HJ^HEmmE improvements 545 Rearrangement and relocation 547 Litigation 547
^^^MHmH SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 547
Questions 548 Cases 549 Exercises 554 Problems 560
Chapter 1 JL Plant Assets and Intangibles: Depreciation, Depletion,
^^^^^^^^^__ Amortization, and Disposition 567
jH^^^BBBBB the nature of depreciation, depletion, and amortization in
jHHJHHflEflNH ACCOUNTING 567
^^B|b9[^^^^^^^ B Cost allocation vs. valuation 568 Depreciation and cash flows 568 Relevant
J^^KS||KS§39hH^^B factors in calculating depreciation 569
¦QdBJEgl^Ks DEPRECIATION METHODS 571
^^^^^^^^H^^^B Straight-line method 571 Production or use method 573 Accelerated
IHHl^BHHHHll depreciation methods 574 Group and composite methods 576
PARTIAL-YEAR DEPRECIATION 578
DEPLETION OF NATURAL RESOURCES 579
Changes in estimates 581 Percentage (statutory) depletion 581 The oil and
gas controversy 581
AMORTIZATION OF INTANGIBLE ASSETS 583
Specifically identifiable intangible assets 583 Goodwill 584
IMPAIRMENT OF VALUE OF LONG-LIVED ASSETS 584
DISPOSITION OF PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE
ASSETS 586
Sale 586 Abandonment 586 Donation 586 Involuntary conversion 586
FINANCIAL STATEMENT DISCLOSURES 588
Plant assets 588 Natural resources 588 Intangible assets 589
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 589
Questions 590 Cases 591 Exercises 594 Problems 598
Contents *,¦*,
Chapter 1 3 Financial Instruments: Investments in Equity
^^BMgBue; Securities 606
PHMBBEIBB FUNDAMENTAL FINANCIAL INSTRUMENTS 608
¦^HHgfiHyfiliH Types of fundamental financial instruments 608 Recognition and measurement of
^R^^^^Hj^^Q financial instruments 609
jj^^^^^^^H INVESTMENTS IN EQUITY SECURITIES 610
^^^^^^^^^^H Valuation at acquisition 610 Valuation following acquisition 612 Financial
^^^^^^^^^^flj statement presentation and disclosures 619
^I^^^^^H OTHER SECURITY INVESTMENTS 625
^^^^^^^^^H Preferred stock 625 Stock rights 626 Stock splits and stock dividends 629
i^^H^^I SUMMARY OF VALUATION METHODS AND UNRESOLVED ISSUES 629
SPECIAL-PURPOSE FUNDS 630
Accounting for funds 631
CASH SURRENDER VALUE OF LIFE INSURANCE 632
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 633
APPENDIX 13-1: ADDITIONAL ISSUES RELATED TO THE EQUITY
METHOD 634
Questions 637 Cases 638 Exercises 640 Problems 645
Chapter 1 4 Financial Instruments: Debt Securities 654
¦^¦TOBHHH BONDS AND NOTES—NATURE AND CHARACTERISTICS 654
j^^^H^^^^^H Interest 655 Security for debt issued 655 Ownership registration 655 Sinking
P^B9HH fund requirements 656 Other characteristics 656
s^^KS^!!) DETERMINING SELLING PRICES FOR UNCONDITIONAL RECEIVABLES/
kf5T!P||P|Jk PAYABLES—BONDS AND NOTES 657
* *f /gift *w Market pricing of debt on debt contract date 657 Pricing between interest
JMJLL; |K J ACCOUNTING FOR BONDS AND NOTES—ISSUER AND INVESTOR 661
¦SEP ®J^L e2JH Accounting at date of issue and on subsequent interest dates 661 Accruals
SHr -: .s9E|fi wnen nterest period and accounting period do not coincide 672 Debt issued or
¦EL d $t Jai^HI^H purchased between interest dates 674 Basic accounting concepts for bonds and
notes: a summary 676
ACCOUNTING AND REPORTING CERTAIN DEBT SECURITIES AT FAIR
VALUE 677
Definition of a debt security 677 Classification for purposes of applying fair
value 677 Held-to-maturity debt securities 678 Trading securities and available-
for-sale securities 678 Nontemporary declines in fair value (impairments) of
available-for-sale securities and held-to-maturity securities 682 Transfers
between categories of debt securities 683 Financial statement presentation and
disclosures of investments in debt securities 684 Mark-to-market (fair value)
procedures: summary and analysis 684
Contents
Afl
EXTINGUISHMENT OF DEBT 686
Extinguishment by paying creditor 687 In-substance defeasance 688 Debt
extinguishment: a summary 689
ACCOUNTING FOR LOAN IMPAIRMENTS 689
COMPOUND FINANCIAL INSTRUMENTS WITH DEBT AND EQUITY
CHARACTERISTICS 691
Convertible debt 691 Debt issued with detachable warrants 694 Compound
financial instruments with debt and equity characteristics: a summary 695
Emerging financial instruments and an overview of the FASB s financial
instruments project 695
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 699
APPENDIX 14-1: TROUBLED DEBT RESTRUCTURING 700
Questions 706 Cases 707 Exercises 711 Problems 717
Chapter 1 5 Leases 724
^^Jt^3j^^jJ3 CONCEPTUAL CONSIDERATIONS: RENTAL OR ACQUISITION? 725
^^^^^^^^^•^lCMH Leases that transfer ownership rights, risks, and rewards 725 Accounting for a
^^^H^£ggtfM|H^H lease that represents a transfer of ownership 727 Financial statement
^^^^ JRiy^VHpH presentation 729 Classification of leases 730
9HK|||^J|p^|fl APPLYING THE CONCEPTUAL CONSIDERATIONS 734
WBrn^SsBUb^^mam Historical background 734 FASB Statement No. 13 lease classification
^flfl ¦ ^^^^ftg criteria 735 Lessee depreciation of leased property under a capital lease 737
Hist JHHI^^H Summary °f Statement No. 13 objectives 738
ADDITIONAL LEASING ISSUES 738
Minimum lease payments 738 Residual value at the end of the lease term 739
Bargain purchase options 745 Lessee use of the implicit rate vs. an incremental
borrowing rate 746 Lessor initial direct costs of leasing 748 Sale-leaseback
transactions 749 Lease disclosures 753 Continuing lease controversies 754
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 756
APPENDIX 15-1: REAL ESTATE LEASES 758
Questions 760 Cases 762 Exercises 766 Problems 771
Chapter 1 6 Pensions and Other Postretirement Benefits 778
HHHHHHHH POSTRETIREMENT BENEFIT PLANS 779
^^^^^^^^^^^^^H Characteristics of private postretirement benefit plans 780 A typical defined
^^^^PB^^^^^^H benefit pension plan arrangement 781 Accounting pronouncements on private
^^^V^H^^^^^^H postretirement benefit plans 782 Objectives in accounting for defined benefit
^^^K^I^^^^^^H retirement plans 784
^H^^^^^^^H FUNDAMENTALS OF DETERMINING AND ACCOUNTING FOR PENSION AND
^^^¦^¦^^^^H OTHER POSTRETIREMENT BENEFIT COSTS 785
im^H|^^^H Actuarial assumptions and valuation 786 Accumulated benefits vs. projected
benefits 787 Allocating (attributing) cost of benefits to periods 788 Service cost
Contents XVH
and interest cost 788 Funding and returns on plan assets 792 Retroactive
benefits (prior service cost) 796 Amortization of prior service cost for a group of
employees 799 Pension accounting fundamentals extended to other
postretirement benefits 803
ADDITIONAL ISSUES IN ACCOUNTING FOR PENSIONS AND OTHER
POSTRETIREMENT BENEFIT COSTS 807
Gains and Losses 808 Accounting for plan amendments 813 Recognizing a
minimum liability 815 Pensions and other postretirement benefits: transition
requirements 817 Disclosure requirements of Statements Nos. 87 and 106 819
Accounting for pensions and other postretirement benefits: an assessment 821
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 824
APPENDIX 16-1: OTHER TOPICS RELATED TO PENSION AND OTHER
POSTRETIREMENT BENEFITS 826
APPENDIX 16-2: ACCOUNTING AND REPORTING BY THE PENSION
PLAN 828
Questions 829 Cases 830 Exercises 833 Problems 840
Chapter 1 7 Accounting for Income Taxes 849
H|^HHWHB| MAJOR CONCEPTUAL ISSUES IN ACCOUNTING AND REPORTING FOR
PH|i|^QK£pffi INCOME TAXES 850
S^^l^^W^^Sg Temporary differences 850 Partial vs. comprehensive recognition 852 Asset/
t^^^ MS ^^ JSr liability method vs. deferred method 853 Net-of-tax reporting of deferred
^ilP^i^fli FUNDAMENTALS OF CURRENT REQUIREMENTS IN ACCOUNTING FOR
^JaK?^*~5|£ INCOME TAXES 856
48SyL/ 6|lF^ *S^ Historical background 856 Current requirements 857 Example 1: deferred tax
**53^* TJr^^lfP liability 858 Changes in enacted marginal tax rates 859 Net operating
u .¦¦5CS* .J^«££* losses 860 Example 2: deferred tax asset/liability 863 Financial accounting
fei Ss^ Jif J, *i^- f events that do not have tax consequences 863 Comprehensive example: supra
¦-¦**¦* company 864 Valuation allowance for deferred tax assets 873 Financial
statement presentation and disclosure 875
ADDITIONAL ISSUES IN ACCOUNTING FOR INCOME TAXES 878
Tax planning strategies 878 The alternative minimum tax 881
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 881
Questions 882 Cases 883 Exercises 884 Problems 888
Chapter 1 8 Stockholders Equity 893
^Hjf^HIHHEPfli CORPORATE FORM OF ORGANIZATION 894
^^Hj^^Bffi^^Hu^^KI state |aws governing corporations 894 The system of capital accumulation 895
^^^^^^B^^^^^^^H Limited liability 896 Preferred stock 898 Corporate dividend policies 901
^^^^^^|H^^^^^^^I Ability to pay dividends 901
Contents
ACCOUNTING FOR THE ISSUANCE OF STOCK 903
Issuance for cash 903 Issuance for noncash consideration 904 Stock
subscriptions 905 Lump-sum stock issuances 907 Stock issue costs 908
Conversion of preferred into common 908 Stock rights 909
DONATED CAPITAL 919
ACCOUNTING FOR ACQUIRED CAPITAL STOCK 919
Accounting for retirement of capital stock 920 Accounting for treasury stock 921
THE NATURE OF RETAINED EARNINGS 926
Trends in terminology 926 Transactions affecting retained earnings 926
DIVIDENDS 927
Types of dividends 927 The effect of dividend preferences on dividend
distributions 935
APPROPRIATIONS (RESTRICTIONS) OF RETAINED EARNINGS 937
A note on account titles 938
STATEMENT OF STOCKHOLDERS EQUITY 938
STOCKHOLDERS EQUITY: AN OVERVIEW 939
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 940
APPENDIX 18-1: QUASI-REORGANIZATIONS 941
APPENDIX 18-2: THE USE OF OPTION-PRICING MODELS TO DETERMINE
THE FAIR VALUE OF STOCK-BASED COMPENSATION 944
Questions 945 Cases 947 Exercises 951 Problems 960
Chapter 1 Accounting Changes and Error Analysis 970
^ji^il^HH ACCOUNTING CHANGES 971
jt ^? ^^^^^^H Types of accounting changes 973 Approaches to recording and reporting
WBjk^ ^^^^^^H accounting changes 975 Changes in accounting principle 976 Changes in
!l||ifiilta« J^^^^^^H accounting estimates 985
^^mBBjU^P ANALYSIS AND CORRECTION OF ERRORS 987
/ jgj|H^HH^^B Types of errors 987 Correction and disclosure of errors 988 Analysis of
^^^^^^^^^HH errors 992
JESMHHI SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 996
APPENDIX 19-1: WORKSHEET ANALYSIS FOR NUMEROUS ERRORS 997
Questions 1002 Cases 1003 Exercises 1005 Problems 1011
Chapter 2* J Earnings per Share 1023
iP*i|9HHH| AN OVERVIEW OF THE CALCULATION OF EPS 1024
|p *!^.£^HJ^^B* Determining income applicable to common stock 1025 Calculating the weighted
^iid^g*^gB5o^S average number of common shares 1025 Adjusting the weighted average for
tST * HSanZS^ifSZ^^M stock dividends, stock splits, or reverse splits 1027
Contents ^
THE CONCEPT OF DILUTION 1028
CLASSIFICATION OF POTENTIALLY DILUTIVE SECURITIES FOR EPS
CALCULATIONS 1030
Common stock equivalents 1031 Order of entry into EPS calculations 1038
Other potentially dilutive securities 1039
SIMPLE VS. COMPLEX CAPITAL STRUCTURES 1039
REPORTING EPS AND MAKING RELATED DISCLOSURES 1039
ILLUSTRATIONS OF CALCULATING AND REPORTING EARNINGS PER
SHARE 1041
EPS for a simple capital structure 1041 EPS for a complex capital
structure 1043
SUMMARY OF CALCULATING EPS 1048
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 1048
Questions 1050 Cases 1051 Exercises 1053 Problems 1058
Chapter 21 A: Revisiting the Statement of Cash Flows 1069
B: Additional Disclosure Topics 1095
P_^^ PART A: REVISITING THE STATEMENT OF CASH FLOWS 1069
raPM The statement of cash flows 1070 Preparing the statement of cash flows 1072
HmHSm Investing and financing activities not affecting cash 1082 Summary of cash flow
jgp*- ^^^mHJHB reporting objectives 1082
t^^H^HB OTHER STATEMENT OF CASH FLOWS PREPARATION AND DISCLOSURE
V*^Wf?f3BI ISSUES 1082
^¦SafHSlJ Income flows vs. cash flows 1082 Extraordinary items 1084 Classification
^^ifiGSpHnfl issues 1085 Cash flow per share data 1085 Transactions and events not
** ^HHll0 disclosed on the statement of cash flows 1085
USE OF A WORKSHEET TO PREPARE THE STATEMENT OF CASH
FLOWS 1085
Explanation of the worksheet entries 1089 Preparing the statement of cash flows
from the worksheet 1095
PART B: ADDITIONAL DISCLOSURE TOPICS 1095
Interim reporting 1095 Segment reporting 1100
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 1104
APPENDIX 21-1: USING T-ACCOUNTS TO PREPARE THE STATEMENT OF
CASH FLOWS 1106
Questions 1106 Cases 1109 Exercises 1111 Problems 1116
Appendix Concepts of Present and Future Value 1130
INTEREST AND THE TIME VALUE OF MONEY 1131
Simple interest 1132 Compound interest 1132
Contents
PRESENT AND FUTURE VALUES OF SINGLE AMOUNTS 1134
Time diagrams 1134 Future value of a single amount 1135 Present value of a
single amount 1136 Other values related to single amounts 1138
ANNUITIES 1140
Future value of an ordinary annuity 1141 Present value of an ordinary
annuity 1142 Other values related to ordinary annuities 1145 Annuities
due 1147 Deferred annuities 1150
RELATING SYMBOLS TO CONCEPTS AND TABLES 1152
CONSOLIDATING THE CONCEPTS 1152
ACCOUNTING APPLICATIONS OF PRESENT AND FUTURE VALUE 1154
Valuing long-term bonds 1154 Obligations arising under employer pension
plans 1154 Lease obligations 1155
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 1156
PRESENT AND FUTURE VALUE TABLES 1156
Questions 1162 Exercises 1162 Problems 1167
Index 1173
|
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I II' , ^ j,
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( Preface xxj
Chapter, I Financial Accounting and Reporting: An Introduction
m^wjpm and Historical Development 1
l^E^KT to. THE ENVIRONMENT AND ROLE OF FINANCIAL ACCOUNTING AND
sJ^NfmSSJJ REPORTING 2
H^J^U|5^H| The economic environment 2 Uses and users of financial accounting
^^^^^^H^^^^H information 3 The economic environment and its relationship to financial
^^^^^^^^^^^H accounting and reporting 4
^^^^K^^H THE NATURE AND CONTENT OF FINANCIAL ACCOUNTING AND
^^^HE^^H REPORTING 8
^^^^Hl^^^^J Generally accepted accounting principles (GAAP) 8 The importance of ethics in
^^H^^^^^^H financial accounting and reporting 10 Financial reporting in relation to other
^^^^^^^^^^^ information used in decision making 11
THE HISTORICAL DEVELOPMENT OF FINANCIAL ACCOUNTING AND
REPORTING 13
The pre-formal-theory era 13 The problem-solving era 14 The conceptual
framework era 17 Standard setting as a political process 21 Other groups that
influence theory and practice 22 International standard-setting developments 24
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 25
Questions 26 Cases 27 Exercises 32
Chapter jL Financial Accounting and Reporting: A Theoretical
m^^^^^^^^^^— Structure 34
HP^^^^^^Z^H ENVIRONMENTAL ASSUMPTIONS 37
E^^gll^^HSJSSSS^Sl Tne accounting entity assumption 37 The periodicity assumption 37 The going
lt^|M^*^pBwS^^jKg concern assumption 37 The monetary assumption 38
^^JJ|E^^^^^^M9| OBJECTIVES OF FINANCIAL REPORTING 38
¦lMk2595NMHflB Characteristics and limitations of financial statement information 38 The role and
VM§!Ji^MMaiZia!Z^K^^9 objectives of financial accounting and reporting 39
Contents
rORZoNC4rACTERIST1CS °F USEFUL ACCOUN™G
rs:f:ro:rP^;TSEs for ™e *™*™ -
=r p. , d8teminingp jz% pzSeu^;srd=:r
SSSSSS^"-"008 °F ™ANC'^ STATEMENT
Disclosure 65 Methods of presentation 67
xr6r ssrysK A,r concept *"*»«,« 68
„ ChaPter3 The Accounting Process a » •
^Ciifl ^31^^^-^ rrocess: A Review 87
balance 120 Reversing entries 121 "? PreParin9 a postclosing trial
Chapter 41 th i
,? ^ E^Tsfatement Md State—t of Ketaine.,
^ - ^^"^ INC0ME MEASUREMENT 152
^,^ ;?¦- lncome-reporting issues 165 3 Earnin9s per share 164 Unresolved
Contents «j
STATEMENT OF RETAINED EARNINGS 166
Prior period adjustments 166 Combined statement of income and retained
earnings 167
SUMMARY OF PRESENTATION OF INCOME INFORMATION 167
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 167
APPENDIX 4-1: ACTUAL FINANCIAL STATEMENTS OF THE BRISTOL-MYERS
SQUIBB COMPANY 170
Questions 184 Cases 184 Exercises 187 Problems 192
Chapter 3 The Balance Sheet (Statement of Financial
Position) 197
._ . USES OF THE BALANCE SHEET 198
'".t /¦^¦•v^ft' CLASSIFICATION AND VALUATION IN THE BALANCE SHEET 199
~"U^~ a Jj Current assets 200 Current liabilities 202 Noncurrent assets 205 Long-term
iy liabilities 206 Owners' (stockholders') equity 207
W~~' }* UNCLASSIFIED BALANCE SHEETS 209
«f NOTES AND SUPPLEMENTARY INFORMATION 209
%-¦' ' Long-term commitments 211 Property, plant, and equipment 211 Accounting
policies 211 Subsequent events 212
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 214
APPENDIX 5-1: ANALYSIS OF FINANCIAL STATEMENTS 215
Questions 235 Cases 237 Exercises 243 Problems 250
Chapter O The Statement of Cash Flows 262
I '" ^ HISTORICAL BACKGROUND 263
j^MBS""" OVERVIEW OF THE STATEMENT OF CASH FLOWS 265
^299 USEFULNESS OF THE STATEMENT OF CASH FLOWS 267
¦ ¦-—_ PREPARATION OF THE STATEMENT OF CASH FLOWS 272
1 i££=~ -- ^r=r: Cash flows from operating activities 273 Cash flows from investing and financing
I il~_ 1H: activities 282 Cash flows from investing activities 282 Cash flows from
¦ §§v~EL .f - ' financing activities 283 Summary of statement of cash flows preparation 285
^_!_:— 3 2 . Summary of cash flow reporting objectives 285
r^II * f ! REPORTING NET CASH FLOWS FROM OPERATING ACTIVITIES—AN
r = .s - EVAluaTION 285
EVALUATION OF FINANCIAL STATEMENTS 287
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 287
Questions 288 Cases 289 Exercises 291 Problems 298
Contents
Chapter 7 Revenue Recognition and Income Determination 307
flflHflHMH AN OVERVIEW OF REVENUE CONCEPTS 309
^^HH^RflH 1~h@ revenue earning process 309 Recognition and the realization principle 309
^^HhHHH revenue recognition at the point of sale 310
^^^^^^HSK| Sales made on credit 311 Costs incurred after the point of sale 311 Return
H^H^^^BHH privileges 311 Service transactions 313
HH|^^^^H REVENUE RECOGNITION DURING PRODUCTION 314
^Hggl^^^^^^H Long-term construction contracts 314 Service transactions 323 Products
^H^^^^^^^H requiring aging 324
^^|^^^^B REVENUE RECOGNITION AT COMPLETION OF PRODUCTION 324
^^^^^^^™ REVENUE RECOGNITION DURING CASH COLLECTION 327
The installment method 328 The cost-recovery method 332 Evaluation of cash-
collection methods 333
SUMMARY OF REVENUE AND INCOME RECOGNITION CONCEPTS 333
SPECIALIZED APPLICATIONS OF REVENUE RECOGNITION CONCEPTS 334
Franchises 334 Real estate sales and retail land sales 336 Barter
transactions 337 Other industry standards 337
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 338
APPENDIX 7-1: CONSIGNMENT SALES 339
Questions 341 Cases 341 Exercises 347 Problems 353
Chapter O Cash, Current Receivables and Liabilities, and
¦^w ^mh Contingencies 363
jOl ' ^h^Hr| Petty cash 365 Reconciliation of cash balances 366 Cash disclosures:
tJ[jfck"^^^HB! overdrafts and compensating balances 368
H^^H^^B RECEIVABLES 369
^^^^^Hjjj^H Accounts receivable 369 Short-term notes receivable 377 Using receivables to
HH^^^^^^E^B secure immediate cash 379
KfeSMaT^atf LIABILITIES AND THEIR VALUATION 384
¦H^B^M DETERMINABLE CURRENT LIABILITIES 385
MkSHB Trade accounts payable 385 Short-term (current) notes payable 386 Dividends
payable 387 Collections for third parties 387 Accrued liabilities 388
Prepayments and deposits from customers 391
CURRENT LIABILITIES DEPENDENT ON OPERATING RESULTS 391
Income taxes payable 392 Bonuses payable 392
CONTINGENCIES 393
Loss contingencies 393 Gain contingencies 398
Contents ^j.
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 398
Questions 399 Cases 401 Exercises 403 Problems 410
Chapter " Inventory Valuation: Determining Cost and Using Cost
JPB^^^^^^^^^M Flow Assumptions 424
^HH^^^^^^^H| MAJOR INVENTORY CLASSIFICATIONS 425
^^^^^^|^^^^H INVENTORY ACCOUNTING SYSTEMS 427
^^^^^^^^H^^H^^B The periodic inventory system 427 The perpetual inventory system 427 The
^^^^^^^Hjj^^^HIHS periodic and perpetual inventory systems compared 428
^^^^^m^B^^H ITEMS TO BE INCLUDED IN INVENTORY 429
^^^^^^^^QH|H^^J Goods in transit 429 Consigned goods 430 Sales on approval 430 Product
^^^^^^^^^^^•^¦^B financing arrangement 430 Conditional sales 431
INVENTORY ERRORS AND THEIR EFFECTS ON THE FINANCIAL
STATEMENTS 431
EXPENDITURES AND COST ALLOCATIONS TO BE INCLUDED IN INVENTORY
COST 433
The costs of purchased merchandise inventory and cost adjustments 434 The
costs of manufactured inventories 437
COST FLOWS AND COST FLOW ASSUMPTIONS 437
Specific identification 438 Average cost 439 First in, first out (FIFO) 440
Last in, first out (LIFO) 442 Comparative results of cost flow assumptions 442
Evaluation of the various cost flow assumptions 444 Problems in using unit
LIFO 447 A pooled approach to LIFO 447 Dollar-value LIFO 449
REPORTING INVENTORIES IN THE FINANCIAL STATEMENTS 454
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 454
APPENDIX 9-1: METHODS OF OBTAINING INVENTORY COST INDEXES 456
Questions 459 Cases 460 Exercises 462 Problems 468
Chapter 1 O Inventory Valuation: Departures from Historical Cost
MRi^i^Hi^^^PBi and Methods of Estimating Inventory Cost 480
j^BBI^^^^KKB VALUATION OF INVENTORY AT LOWER OF COST OR MARKET 480
flBB^^^Bf^^Snjj^B Rationale for ceiling and floor constraints on "market" 482 Applications of the
H^^^^^^^H^S^^S LCM procedure 483 LCM and conservatism 484 Recording the reduction of
^Hj^^^^^^^^^^^^B inventory to "market" 485 Valuing firm purchase commitments at LCM 485
j^^^^^^^^^^^^R OTHER ALTERNATIVES TO HISTORICAL COST INVENTORY VALUATION 487
j^^^^^^^^^^^^^^^H Replacement cost 487 Net realizable value 488 Standard costs 489
^^^^MHMI^^^^B METHODS OF ESTIMATING INVENTORY COSTS 489
The gross profit method 489 The retail inventory method 491 The dollar-value
retail LIFO method 497
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 501
Questions 502 Cases 503 Exercises 505 Problems 511
Contents
Chapter 1 1 Plant Assets and Intangibles: Acquisition and
^^^^^^^^_ Subsequent Expenditures 520
^^^H^^^l CHARACTERISTICS OF PLANT ASSETS AND INTANGIBLES 521
^HB^^^H VALUATION AT ACQUISITION 521
^^^^^^^^^H Plant assets 521 Intangible assets 528 Acquiring assets by issuing stock 537
^^^^^^^^^^H Donated assets 537 Lump-sum purchases 537 Exchanges of nonmonetary
^^^^^^^^^^H assets 539
^^^^Hl!g» EXPENDITURES AFTER ACQUISITION 544
H^B^HOIHH Repairs and maintenance 544 Additions 545 Replacements and
^^^HJ^HEmmE improvements 545 Rearrangement and relocation 547 Litigation 547
^^^MHmH SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 547
Questions 548 Cases 549 Exercises 554 Problems 560
Chapter 1 JL Plant Assets and Intangibles: Depreciation, Depletion,
^^^^^^^^^_ Amortization, and Disposition 567
jH^^^BBBBB the nature of depreciation, depletion, and amortization in
jHHJHHflEflNH ACCOUNTING 567
^^B|b9[^^^^^^^ B Cost allocation vs. valuation 568 Depreciation and cash flows 568 Relevant
J^^KS||KS§39hH^^B factors in calculating depreciation 569
¦QdBJEgl^Ks DEPRECIATION METHODS 571
^^^^^^^^H^^^B Straight-line method 571 Production or use method 573 Accelerated
IHHl^BHHHHll depreciation methods 574 Group and composite methods 576
PARTIAL-YEAR DEPRECIATION 578
DEPLETION OF NATURAL RESOURCES 579
Changes in estimates 581 Percentage (statutory) depletion 581 The oil and
gas controversy 581
AMORTIZATION OF INTANGIBLE ASSETS 583
Specifically identifiable intangible assets 583 Goodwill 584
IMPAIRMENT OF VALUE OF LONG-LIVED ASSETS 584
DISPOSITION OF PLANT ASSETS, NATURAL RESOURCES, AND INTANGIBLE
ASSETS 586
Sale 586 Abandonment 586 Donation 586 Involuntary conversion 586
FINANCIAL STATEMENT DISCLOSURES 588
Plant assets 588 Natural resources 588 Intangible assets 589
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 589
Questions 590 Cases 591 Exercises 594 Problems 598
Contents *,¦*,
Chapter 1 3 Financial Instruments: Investments in Equity
^^BMgBue; Securities 606
PHMBBEIBB FUNDAMENTAL FINANCIAL INSTRUMENTS 608
¦^HHgfiHyfiliH Types of fundamental financial instruments 608 Recognition and measurement of
^R^^^^Hj^^Q financial instruments 609
jj^^^^^^^H INVESTMENTS IN EQUITY SECURITIES 610
^^^^^^^^^^H Valuation at acquisition 610 Valuation following acquisition 612 Financial
^^^^^^^^^^flj statement presentation and disclosures 619
^I^^^^^H OTHER SECURITY INVESTMENTS 625
^^^^^^^^^H Preferred stock 625 Stock rights 626 Stock splits and stock dividends 629
i^^H^^I SUMMARY OF VALUATION METHODS AND UNRESOLVED ISSUES 629
SPECIAL-PURPOSE FUNDS 630
Accounting for funds 631
CASH SURRENDER VALUE OF LIFE INSURANCE 632
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 633
APPENDIX 13-1: ADDITIONAL ISSUES RELATED TO THE EQUITY
METHOD 634
Questions 637 Cases 638 Exercises 640 Problems 645
Chapter 1 4 Financial Instruments: Debt Securities 654
¦^¦TOBHHH BONDS AND NOTES—NATURE AND CHARACTERISTICS 654
j^^^H^^^^^H Interest 655 Security for debt issued 655 Ownership registration 655 Sinking
P^B9HH fund requirements 656 Other characteristics 656
s^^KS^!!) DETERMINING SELLING PRICES FOR UNCONDITIONAL RECEIVABLES/
kf5T!P||P|Jk PAYABLES—BONDS AND NOTES 657
' '* *f /gift "*w Market pricing of debt on debt contract date 657 Pricing between interest
JMJLL; |K \ J ACCOUNTING FOR BONDS AND NOTES—ISSUER AND INVESTOR 661
¦SEP" ®J^L e2JH Accounting at date of issue and on subsequent interest dates 661 Accruals
SHr'-: .s9E|fi wnen 'nterest period and accounting period do not coincide 672 Debt issued or
¦EL d\$t 'Jai^HI^H purchased between interest dates 674 Basic accounting concepts for bonds and
notes: a summary 676
ACCOUNTING AND REPORTING CERTAIN DEBT SECURITIES AT FAIR
VALUE 677
Definition of a debt security 677 Classification for purposes of applying fair
value 677 Held-to-maturity debt securities 678 Trading securities and available-
for-sale securities 678 Nontemporary declines in fair value (impairments) of
available-for-sale securities and held-to-maturity securities 682 Transfers
between categories of debt securities 683 Financial statement presentation and
disclosures of investments in debt securities 684 Mark-to-market (fair value)
procedures: summary and analysis 684
Contents
Afl
EXTINGUISHMENT OF DEBT 686
Extinguishment by paying creditor 687 In-substance defeasance 688 Debt
extinguishment: a summary 689
ACCOUNTING FOR LOAN IMPAIRMENTS 689
COMPOUND FINANCIAL INSTRUMENTS WITH DEBT AND EQUITY
CHARACTERISTICS 691
Convertible debt 691 Debt issued with detachable warrants 694 Compound
financial instruments with debt and equity characteristics: a summary 695
Emerging financial instruments and an overview of the FASB's financial
instruments project 695
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 699
APPENDIX 14-1: TROUBLED DEBT RESTRUCTURING 700
Questions 706 Cases 707 Exercises 711 Problems 717
Chapter 1 5 Leases 724
^^Jt^3j^^jJ3 CONCEPTUAL CONSIDERATIONS: RENTAL OR ACQUISITION? 725
^^^^^^^^^•^lCMH Leases that transfer ownership rights, risks, and rewards 725 Accounting for a
^^^H^£ggtfM|H^H lease that represents a transfer of ownership 727 Financial statement
^^^^ JRiy^VHpH presentation 729 Classification of leases 730
9HK|||^J|p^|fl APPLYING THE CONCEPTUAL CONSIDERATIONS 734
WBrn^SsBUb^^mam Historical background 734 FASB Statement No. 13 lease classification
^flfl ¦ ^^^^ftg criteria 735 Lessee depreciation of leased property under a capital lease 737
Hist JHHI^^H Summary °f Statement No. 13 objectives 738
ADDITIONAL LEASING ISSUES 738
Minimum lease payments 738 Residual value at the end of the lease term 739
Bargain purchase options 745 Lessee use of the implicit rate vs. an incremental
borrowing rate 746 Lessor initial direct costs of leasing 748 Sale-leaseback
transactions 749 Lease disclosures 753 Continuing lease controversies 754
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 756
APPENDIX 15-1: REAL ESTATE LEASES 758
Questions 760 Cases 762 Exercises 766 Problems 771
Chapter 1 6 Pensions and Other Postretirement Benefits 778
HHHHHHHH POSTRETIREMENT BENEFIT PLANS 779
^^^^^^^^^^^^^H Characteristics of private postretirement benefit plans 780 A typical defined
^^^^PB^^^^^^H benefit pension plan arrangement 781 Accounting pronouncements on private
^^^V^H^^^^^^H postretirement benefit plans 782 Objectives in accounting for defined benefit
^^^K^I^^^^^^H retirement plans 784
^H^^^^^^^H FUNDAMENTALS OF DETERMINING AND ACCOUNTING FOR PENSION AND
^^^¦^¦^^^^H OTHER POSTRETIREMENT BENEFIT COSTS 785
im^H|^^^H Actuarial assumptions and valuation 786 Accumulated benefits vs. projected
benefits 787 Allocating (attributing) cost of benefits to periods 788 Service cost
Contents XVH
and interest cost 788 Funding and returns on plan assets 792 Retroactive
benefits (prior service cost) 796 Amortization of prior service cost for a group of
employees 799 Pension accounting fundamentals extended to other
postretirement benefits 803
ADDITIONAL ISSUES IN ACCOUNTING FOR PENSIONS AND OTHER
POSTRETIREMENT BENEFIT COSTS 807
Gains and Losses 808 Accounting for plan amendments 813 Recognizing a
minimum liability 815 Pensions and other postretirement benefits: transition
requirements 817 Disclosure requirements of Statements Nos. 87 and 106 819
Accounting for pensions and other postretirement benefits: an assessment 821
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 824
APPENDIX 16-1: OTHER TOPICS RELATED TO PENSION AND OTHER
POSTRETIREMENT BENEFITS 826
APPENDIX 16-2: ACCOUNTING AND REPORTING BY THE PENSION
PLAN 828
Questions 829 Cases 830 Exercises 833 Problems 840
Chapter 1 7 Accounting for Income Taxes 849
H|^HHWHB| MAJOR CONCEPTUAL ISSUES IN ACCOUNTING AND REPORTING FOR
PH|i|^QK£pffi INCOME TAXES 850
S^^l^^W^^Sg Temporary differences 850 Partial vs. comprehensive recognition 852 Asset/
t^^^ MS ^^'JSr liability method vs. deferred method 853 Net-of-tax reporting of deferred
^ilP^i^fli FUNDAMENTALS OF CURRENT REQUIREMENTS IN ACCOUNTING FOR
^JaK?^*~5|£ INCOME TAXES 856
48SyL/ 6|lF^ *S^ Historical background 856 Current requirements 857 Example 1: deferred tax
**53^* TJr^^lfP liability 858 Changes in enacted marginal tax rates 859 Net operating
u .¦¦5CS*' .J^«££* losses 860 Example 2: deferred tax asset/liability 863 Financial accounting
"fei Ss^ Jif J, *i^- f events that do not have tax consequences 863 Comprehensive example: supra
"¦-¦**¦* '" company 864 Valuation allowance for deferred tax assets 873 Financial
statement presentation and disclosure 875
ADDITIONAL ISSUES IN ACCOUNTING FOR INCOME TAXES 878
Tax planning strategies 878 The alternative minimum tax 881
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 881
Questions 882 Cases 883 Exercises 884 Problems 888
Chapter 1 8 Stockholders' Equity 893
^Hjf^HIHHEPfli CORPORATE FORM OF ORGANIZATION 894
^^Hj^^Bffi^^Hu^^KI state |aws governing corporations 894 The system of capital accumulation 895
^^^^^^B^^^^^^^H Limited liability 896 Preferred stock 898 Corporate dividend policies 901
^^^^^^|H^^^^^^^I Ability to pay dividends 901
Contents
ACCOUNTING FOR THE ISSUANCE OF STOCK 903
Issuance for cash 903 Issuance for noncash consideration 904 Stock
subscriptions 905 Lump-sum stock issuances 907 Stock issue costs 908
Conversion of preferred into common 908 Stock rights 909
DONATED CAPITAL 919
ACCOUNTING FOR ACQUIRED CAPITAL STOCK 919
Accounting for retirement of capital stock 920 Accounting for treasury stock 921
THE NATURE OF RETAINED EARNINGS 926
Trends in terminology 926 Transactions affecting retained earnings 926
DIVIDENDS 927
Types of dividends 927 The effect of dividend preferences on dividend
distributions 935
APPROPRIATIONS (RESTRICTIONS) OF RETAINED EARNINGS 937
A note on account titles 938
STATEMENT OF STOCKHOLDERS' EQUITY 938
STOCKHOLDERS' EQUITY: AN OVERVIEW 939
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 940
APPENDIX 18-1: QUASI-REORGANIZATIONS 941
APPENDIX 18-2: THE USE OF OPTION-PRICING MODELS TO DETERMINE
THE FAIR VALUE OF STOCK-BASED COMPENSATION 944
Questions 945 Cases 947 Exercises 951 Problems 960
Chapter 1 " Accounting Changes and Error Analysis 970
^ji^il^HH ACCOUNTING CHANGES 971
jt ^? ^^^^^^H Types of accounting changes 973 Approaches to recording and reporting
WBjk^ ^^^^^^H accounting changes 975 Changes in accounting principle 976 Changes in
!l||ifiilta« J^^^^^^H accounting estimates 985
^^mBBjU^P ANALYSIS AND CORRECTION OF ERRORS 987
/ jgj|H^HH^^B Types of errors 987 Correction and disclosure of errors 988 Analysis of
^^^^^^^^^HH errors 992
JESMHHI SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 996
APPENDIX 19-1: WORKSHEET ANALYSIS FOR NUMEROUS ERRORS 997
Questions 1002 Cases 1003 Exercises 1005 Problems 1011
Chapter 2*\J Earnings per Share 1023
iP*i|9HHH| AN OVERVIEW OF THE CALCULATION OF EPS 1024
|p *!^.£^HJ^^B* Determining income applicable to common stock 1025 Calculating the weighted
^iid^g*^gB5o^S average number of common shares 1025 Adjusting the weighted average for
tST * HSanZS^ifSZ^^M stock dividends, stock splits, or reverse splits 1027
Contents ^
THE CONCEPT OF DILUTION 1028
CLASSIFICATION OF POTENTIALLY DILUTIVE SECURITIES FOR EPS
CALCULATIONS 1030
Common stock equivalents 1031 Order of entry into EPS calculations 1038
Other potentially dilutive securities 1039
SIMPLE VS. COMPLEX CAPITAL STRUCTURES 1039
REPORTING EPS AND MAKING RELATED DISCLOSURES 1039
ILLUSTRATIONS OF CALCULATING AND REPORTING EARNINGS PER
SHARE 1041
EPS for a simple capital structure 1041 EPS for a complex capital
structure 1043
SUMMARY OF CALCULATING EPS 1048
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 1048
Questions 1050 Cases 1051 Exercises 1053 Problems 1058
Chapter 21 A: Revisiting the Statement of Cash Flows 1069
B: Additional Disclosure Topics 1095
P_^^ PART A: REVISITING THE STATEMENT OF CASH FLOWS 1069
raPM The statement of cash flows 1070 Preparing the statement of cash flows 1072
HmHSm Investing and financing activities not affecting cash 1082 Summary of cash flow
jgp*- ^^^mHJHB reporting objectives 1082
t^^H^HB OTHER STATEMENT OF CASH FLOWS PREPARATION AND DISCLOSURE
V*^Wf?f3BI ISSUES 1082
^¦SafHSlJ Income flows vs. cash flows 1082 Extraordinary items 1084 Classification
^^ifiGSpHnfl issues 1085 Cash flow per share data 1085 Transactions and events not
'** ^HHll0" disclosed on the statement of cash flows 1085
USE OF A WORKSHEET TO PREPARE THE STATEMENT OF CASH
FLOWS 1085
Explanation of the worksheet entries 1089 Preparing the statement of cash flows
from the worksheet 1095
PART B: ADDITIONAL DISCLOSURE TOPICS 1095
Interim reporting 1095 Segment reporting 1100
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 1104
APPENDIX 21-1: USING T-ACCOUNTS TO PREPARE THE STATEMENT OF
CASH FLOWS 1106
Questions 1106 Cases 1109 Exercises 1111 Problems 1116
Appendix Concepts of Present and Future Value 1130
INTEREST AND THE TIME VALUE OF MONEY 1131
Simple interest 1132 Compound interest 1132
Contents
PRESENT AND FUTURE VALUES OF SINGLE AMOUNTS 1134
Time diagrams 1134 Future value of a single amount 1135 Present value of a
single amount 1136 Other values related to single amounts 1138
ANNUITIES 1140
Future value of an ordinary annuity 1141 Present value of an ordinary
annuity 1142 Other values related to ordinary annuities 1145 Annuities
due 1147 Deferred annuities 1150
RELATING SYMBOLS TO CONCEPTS AND TABLES 1152
CONSOLIDATING THE CONCEPTS 1152
ACCOUNTING APPLICATIONS OF PRESENT AND FUTURE VALUE 1154
Valuing long-term bonds 1154 Obligations arising under employer pension
plans 1154 Lease obligations 1155
SUMMARY OF IMPORTANT TOPICS AND CONCEPT APPLICATIONS 1156
PRESENT AND FUTURE VALUE TABLES 1156
Questions 1162 Exercises 1162 Problems 1167
Index 1173 |
| any_adam_object | 1 |
| any_adam_object_boolean | 1 |
| author | Chasteen, Lanny G. Flaherty, Richard E. O'Connor, Melvin C. |
| author_facet | Chasteen, Lanny G. Flaherty, Richard E. O'Connor, Melvin C. |
| author_role | aut aut aut |
| author_sort | Chasteen, Lanny G. |
| author_variant | l g c lg lgc r e f re ref m c o mc mco |
| building | Verbundindex |
| bvnumber | BV023502019 |
| callnumber-first | H - Social Science |
| callnumber-label | HF5635 |
| callnumber-raw | HF5635.C474 1995 |
| callnumber-search | HF5635.C474 1995 |
| callnumber-sort | HF 45635 C474 41995 |
| callnumber-subject | HF - Commerce |
| classification_rvk | QP 800 |
| ctrlnum | (OCoLC)611601345 (DE-599)BVBBV023502019 |
| dewey-full | 657/.04420 |
| dewey-hundreds | 600 - Technology (Applied sciences) |
| dewey-ones | 657 - Accounting |
| dewey-raw | 657/.044 20 |
| dewey-search | 657/.044 20 |
| dewey-sort | 3657 244 220 |
| dewey-tens | 650 - Management and auxiliary services |
| discipline | Wirtschaftswissenschaften |
| discipline_str_mv | Wirtschaftswissenschaften |
| edition | 5. ed. |
| format | Book |
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| id | DE-604.BV023502019 |
| illustrated | Illustrated |
| index_date | 2024-07-02T22:30:29Z |
| indexdate | 2024-07-09T21:23:30Z |
| institution | BVB |
| isbn | 0070110875 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016829341 |
| oclc_num | 611601345 |
| open_access_boolean | |
| owner | DE-521 |
| owner_facet | DE-521 |
| physical | XXVIII, 1201 S. Ill., graph. Darst. |
| publishDate | 1995 |
| publishDateSearch | 1995 |
| publishDateSort | 1995 |
| publisher | McGraw-Hill |
| record_format | marc |
| spelling | Chasteen, Lanny G. Verfasser aut Intermediate accounting Lanny G. Chasteen ; Richard E. Flaherty ; Melvin C. O'Connor 5. ed. New York <<[u.a.]>> McGraw-Hill 1995 XXVIII, 1201 S. Ill., graph. Darst. txt rdacontent n rdamedia nc rdacarrier Accounting Rechnungswesen (DE-588)4048732-5 gnd rswk-swf Rechnungswesen (DE-588)4048732-5 s 1\p DE-604 Flaherty, Richard E. Verfasser aut O'Connor, Melvin C. Verfasser aut HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016829341&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Chasteen, Lanny G. Flaherty, Richard E. O'Connor, Melvin C. Intermediate accounting Accounting Rechnungswesen (DE-588)4048732-5 gnd |
| subject_GND | (DE-588)4048732-5 |
| title | Intermediate accounting |
| title_auth | Intermediate accounting |
| title_exact_search | Intermediate accounting |
| title_exact_search_txtP | Intermediate accounting |
| title_full | Intermediate accounting Lanny G. Chasteen ; Richard E. Flaherty ; Melvin C. O'Connor |
| title_fullStr | Intermediate accounting Lanny G. Chasteen ; Richard E. Flaherty ; Melvin C. O'Connor |
| title_full_unstemmed | Intermediate accounting Lanny G. Chasteen ; Richard E. Flaherty ; Melvin C. O'Connor |
| title_short | Intermediate accounting |
| title_sort | intermediate accounting |
| topic | Accounting Rechnungswesen (DE-588)4048732-5 gnd |
| topic_facet | Accounting Rechnungswesen |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016829341&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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