| Section 1: The Role of Accounting as an Information System |
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Chapter 1 Environment and Theoretical Structure of Financial Accounting |
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2 | (44) |
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Part A: Financial Accounting Environment |
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3 | (16) |
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The Economic Environment and Financial Reporting |
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5 | (4) |
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The Investment-Credit Decision-A Cash Flow Perspective |
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6 | (1) |
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Cash versus Accrual Accounting |
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7 | (2) |
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The Development of Financial Accounting and Reporting Standards |
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9 | (6) |
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Historical Perspective and Standards |
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9 | (4) |
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The Standard-Setting Process |
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13 | (2) |
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Encouraging High-Quality Financial Reporting |
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15 | (2) |
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15 | (1) |
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Financial Reporting Reform |
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16 | (1) |
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A Move Away from Rules-Based Standards? |
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17 | (2) |
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18 | (1) |
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Part B: The Conceptual Framework |
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19 | (27) |
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Objective of Financial Reporting |
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21 | (1) |
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Qualitative Characteristics of Financial Reporting Information |
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21 | (3) |
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Fundamental Qualitative Characteristics |
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21 | (2) |
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Enhancing Qualitative Characteristics |
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23 | (1) |
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Key Constraint: Cost Effectiveness |
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24 | (1) |
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Elements of Financial Statements |
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24 | (1) |
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24 | (2) |
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Economic Entity Assumption |
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24 | (2) |
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26 | (1) |
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26 | (1) |
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26 | (1) |
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Recognition, Measurement, and Disclosure Concepts |
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26 | (7) |
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27 | (1) |
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28 | (3) |
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31 | (2) |
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33 | (13) |
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Chapter 2 Review of the Accounting Process |
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46 | (62) |
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48 | (3) |
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48 | (1) |
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49 | (2) |
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The Accounting Processing Cycle |
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51 | (9) |
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Concept Review Exercise: Journal Entries for External Transactions |
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60 | (2) |
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62 | (8) |
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63 | (3) |
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66 | (2) |
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68 | (2) |
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Concept Review Exercise: Adjusting Entries |
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70 | (1) |
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Preparing the Financial Statements |
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71 | (4) |
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The Income Statement and the Statement of Comprehensive Income |
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71 | (1) |
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72 | (2) |
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The Statement of Cash Flows |
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74 | (1) |
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The Statement of Shareholders' Equity |
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75 | (1) |
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75 | (2) |
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Concept Review Exercise: Financial Statement Preparation and Closing |
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77 | (2) |
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Conversion from Cash Basis to Accrual Basis |
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79 | (4) |
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Appendix 2A: Use of a Worksheet |
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83 | (1) |
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Appendix 2B: Reversing Entries |
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84 | (2) |
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Appendix 2C: Subsidiary Ledgers and Special Journals |
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86 | (22) |
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Chapter 3 The Balance Sheet and Financial Disclosures |
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108 | (54) |
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Part A: The Balance Sheet |
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110 | (10) |
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110 | (1) |
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111 | (1) |
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Classification of Elements |
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111 | (9) |
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112 | (4) |
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116 | (1) |
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117 | (1) |
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Concept Review Exercise: Balance Sheet Classification |
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119 | (1) |
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Part B: Financial Disclosures |
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120 | (8) |
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121 | (2) |
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Summary of Significant Accounting Policies |
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121 | (1) |
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121 | (1) |
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Noteworthy Events and Transactions |
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122 | (1) |
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Management's Discussion and Analysis |
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123 | (1) |
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Management's Responsibilities |
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124 | (1) |
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Compensation of Directors and Top Executives |
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124 | (2) |
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126 | (2) |
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128 | (7) |
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Using Financial Statement Information |
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128 | (36) |
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129 | (1) |
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130 | (5) |
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Appendix 3: Reporting Segment Information |
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135 | (27) |
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Chapter 4 The Income Statement, Comprehensive Income, and the Statement of Cash Flows |
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162 | (72) |
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Part A: The Income Statement and Comprehensive Income |
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164 | (21) |
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Income from Continuing Operations |
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164 | (4) |
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Revenues, Expenses, Gains, and Losses |
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164 | (2) |
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Operating Income versus Nonoperating Income |
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166 | (1) |
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166 | (1) |
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166 | (2) |
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168 | (5) |
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Income Smoothing and Classification Shifting |
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169 | (1) |
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Operating Income and Earnings Quality |
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169 | (2) |
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Nonoperating Income and Earnings Quality |
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171 | (1) |
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172 | (1) |
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173 | (5) |
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What Constitutes a Discontinued Operation? |
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173 | (1) |
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Reporting Discontinued Operations |
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174 | (4) |
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178 | (1) |
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Change in Accounting Principle |
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178 | (1) |
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Change in Depreciation, Amortization, or Depletion Method |
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179 | (1) |
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Change in Accounting Estimate |
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179 | (1) |
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Correction of Accounting Errors |
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179 | (1) |
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179 | (1) |
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180 | (1) |
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181 | (4) |
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Other Comprehensive Income |
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181 | (1) |
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181 | (2) |
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Accumulated Other Comprehensive Income |
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183 | (1) |
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Concept Review Exercise: Income Statement Presentation; Comprehensive Income |
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184 | (1) |
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Part B: The Statement of Cash Flows |
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185 | (8) |
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Usefulness of the Statement of Cash Flows |
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186 | (1) |
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186 | (7) |
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186 | (3) |
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189 | (1) |
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190 | (1) |
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Noncash Investing and Financing Activities |
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190 | (1) |
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Concept Review Exercise: Statement of Cash Flows |
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192 | (1) |
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Part C: Profitability Analysis |
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193 | (8) |
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193 | (2) |
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195 | (2) |
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Profitability Analysis-An Illustration |
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197 | (4) |
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Appendix 4: Interim Reporting |
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201 | (33) |
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Chapter 5 Revenue Recognition |
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234 | (78) |
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Part A: Introduction to Revenue Recognition |
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236 | (9) |
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Recognizing Revenue at a Single Point in Time |
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238 | (1) |
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Recognizing Revenue over a Period of Time |
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239 | (2) |
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Criteria for Recognizing Revenue over Time |
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239 | (1) |
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Determining Progress toward Completion |
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240 | (1) |
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Recognizing Revenue for Contracts that Contain Multiple Performance Obligations |
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241 | (72) |
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Step 2: Identify the Performance Obligation(s) |
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241 | (1) |
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Step 3: Determine the Transaction Price |
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242 | (1) |
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Step 4: Allocate the Transaction Price to Each Performance Obligation |
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242 | (1) |
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Step 5: Recognize Revenue When (Or As) Each Performance Obligation Is Satisfied |
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242 | (1) |
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Concept Review Exercise: Revenue Recognition for Contracts with Multiple Performance Obligations |
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244 | (1) |
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Part B: Special Topics in Revenue Recognition |
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245 | (16) |
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Special Issues for Step 1: Identify the Contract |
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245 | (1) |
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Special Issues for Step 2: Identify the Performance Obligation(s) |
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246 | (2) |
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Special Issues for Step 3: Determine the Transaction Price |
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248 | (6) |
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Special Issues for Step 4: Allocate the Transaction Price to the Performance Obligations |
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254 | (1) |
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Special Issues for Step 5: Recognize Revenue When (Or As) Each Performance Obligation Is Satisfied |
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254 | (5) |
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259 | (2) |
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Part C: Accounting for Long-Term Contracts |
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261 | (33) |
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Accounting for a Profitable Long-Term Contract |
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262 | (5) |
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A Comparison of Revenue Recognized Over the Term of the Contract and at the Completion of Contract |
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267 | (1) |
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Long-Term Contract Losses |
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268 | (1) |
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Concept Review Exercise: Long-Term Construction Contracts |
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271 | (23) |
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Revenue Recognition: GAAP in Effect Prior to ASU No. 2014-09 |
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294 | (5) |
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Concept Review Exercise: Installment Sales |
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299 | (13) |
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Chapter 6 Time Value of Money Concepts |
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312 | (38) |
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313 | (10) |
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313 | (1) |
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Simple versus Compound Interest |
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314 | (1) |
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Valuing a Single Cash Flow Amount |
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315 | (1) |
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Future Value of a Single Amount |
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315 | (1) |
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Present Value of a Single Amount |
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316 | (4) |
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Solving for Other Values When FV and PV are Known |
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317 | (1) |
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Concept Review Exercise: Valuing A Single Cash Flow Amount |
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319 | (1) |
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Preview of Accounting Applications of Present Value Techniques-Single Cash Amount |
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320 | (2) |
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Expected Cash Flow Approach |
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322 | (1) |
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323 | (27) |
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Future Value of an Annuity |
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324 | (1) |
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Future Value of an Ordinary Annuity |
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324 | (1) |
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Future Value of an Annuity Due |
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325 | (1) |
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Present Value of an Annuity |
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325 | (4) |
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Present Value of an Ordinary Annuity |
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325 | (2) |
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Present Value of an Annuity Due |
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327 | (1) |
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Present Value of a Deferred Annuity |
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328 | (1) |
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Financial Calculators and Excel |
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329 | (1) |
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Solving for Unknown Values in Present Value Situations |
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330 | (2) |
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Concept Review Exercise: Annuities |
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332 | (1) |
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Preview of Accounting Applications of Present Value Techniques-Annuities |
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333 | (3) |
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Valuation of Long-Term Bonds |
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334 | (1) |
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Valuation of Long-Term Leases |
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334 | (1) |
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Valuation of Pension Obligations |
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335 | (1) |
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Summary of Time Value of Money Concepts |
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336 | (14) |
| Section 2: Assets |
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Chapter 7 Cash and Receivables |
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350 | (64) |
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Part A: Cash and Cash Equivalents |
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351 | (5) |
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352 | (1) |
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Internal Control Procedures-Cash Receipts |
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353 | (1) |
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Internal Control Procedures-Cash Disbursements |
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353 | (1) |
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Restricted Cash and Compensating Balances |
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353 | (2) |
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Decision Makers' Perspective |
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355 | (1) |
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Part B: Current Receivables |
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356 | (29) |
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356 | (12) |
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Initial Valuation of Accounts Receivable |
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356 | (6) |
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Subsequent Valuation of Accounts Receivable |
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362 | (1) |
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Concept Review Exercise: Uncollectible Accounts Receivable |
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367 | (1) |
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368 | (6) |
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Short-Term Interest-Bearing Notes |
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368 | (1) |
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Short-Term Noninterest-Bearing Notes |
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369 | (1) |
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Long-Term Notes Receivable |
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370 | (2) |
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Subsequent Valuation of Notes Receivable |
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372 | (2) |
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Financing with Receivables |
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374 | (8) |
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374 | (1) |
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375 | (2) |
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Transfers of Notes Receivable |
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377 | (1) |
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Deciding Whether to Account for a Transfer as a Sale or a Secured Borrowing |
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378 | (1) |
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379 | (1) |
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Concept Review Exercise: Financing With Receivables |
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381 | (1) |
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Decision Makers' Perspective |
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382 | (3) |
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Appendix 7A: Cash Controls |
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385 | (4) |
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Appendix 7B: Accounting for Impairment of a Receivable and a Troubled Debt Restructuring |
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389 | (25) |
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Chapter 8 Inventories: Measurement |
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414 | (50) |
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Part A: Recording and Measuring Inventory |
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415 | (25) |
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416 | (1) |
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416 | (1) |
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Manufacturing Inventories |
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416 | (1) |
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Types of Inventory Systems |
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417 | (3) |
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Perpetual Inventory System |
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417 | (1) |
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Periodic Inventory System |
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418 | (1) |
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A Comparison of the Perpetual and Periodic Inventory Systems |
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419 | (1) |
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What is Included in Inventory? |
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420 | (4) |
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Physical Units Included in Inventory |
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420 | (1) |
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Transactions Affecting Net Purchases |
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421 | (3) |
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Inventory Cost Flow Assumptions |
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424 | (7) |
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425 | (1) |
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426 | (1) |
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First-In, First-Out (FIFO) |
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426 | (2) |
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Last-In, First-Out (LIFO) |
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428 | (2) |
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Comparison of Cost Flow Methods |
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430 | (1) |
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Decision Makers' Perspective-Factors Influencing Method Choice |
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431 | (4) |
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Concept Review Exercise: Inventory Cost Flow Methods |
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435 | (2) |
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Decision Makers' Perspective-Inventory Management |
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437 | (3) |
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Part B: Methods of Simplifying LIFO |
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440 | (24) |
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440 | (1) |
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441 | (24) |
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441 | (1) |
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The DVL Inventory Estimation Technique |
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442 | (1) |
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Concept Review Exercise: Dollar-Value LIFO |
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443 | (1) |
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444 | (20) |
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Chapter 9 Inventories: Additional Issues |
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464 | (52) |
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Part A: Subsequent Measurement of Inventory |
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465 | (7) |
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Lower of Cost or Net Realizable Value (LCNRV) |
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466 | (5) |
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Applying Lower of Cost or Net Realizable Value |
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467 | (1) |
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Adjusting Cost to Net Realizable Value |
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468 | (1) |
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Concept Review Exercise: Lower of Cost or Net Realizable Value |
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469 | (2) |
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Lower of Cost or Market (LCM) |
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471 | (1) |
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Part B: Inventory Estimation Techniques |
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472 | (11) |
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473 | (2) |
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473 | (2) |
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The Retail Inventory Method |
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475 | (11) |
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476 | (1) |
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477 | (2) |
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Other Issues Pertaining to the Retail Method |
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479 | (1) |
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Concept Review Exercise: Retail Inventory Method |
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481 | (2) |
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Part C: Dollar-Value LIFO Retail |
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483 | (2) |
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Concept Review Exercise: Dollar-Value LIFO Retail Method |
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485 | (1) |
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Part D: Change in Inventory Method and Inventory Errors |
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486 | (7) |
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Change in Inventory Method |
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486 | (2) |
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486 | (1) |
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Change to the LIFO Method |
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487 | (1) |
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488 | (3) |
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When the Inventory Error Is Discovered the Following Year |
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490 | (1) |
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When the Inventory Error Is Discovered Two Years Later |
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490 | (1) |
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Concept Review Exercise: Inventory Errors |
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490 | (1) |
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491 | (2) |
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Appendix 9: Purchase Commitments |
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493 | (23) |
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Chapter 10 Property, Plant, and Equipment and Intangible Assets: Acquisition |
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516 | (58) |
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Part A: Valuation at Acquisition |
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518 | (12) |
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518 | (2) |
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520 | (9) |
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Property, Plant, and Equipment |
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520 | (5) |
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525 | (4) |
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529 | (1) |
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Part B: Noncash Acquisitions |
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530 | (8) |
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530 | (2) |
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Issuance of Equity Securities |
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532 | (1) |
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532 | (1) |
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Decision Makers' Perspective |
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533 | (1) |
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534 | (4) |
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Fair Value Not Determinable |
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535 | (1) |
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Lack of Commercial Substance |
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536 | (1) |
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Concept Review Exercise: Exchanges |
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538 | (1) |
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Part C: Self-Constructed Assets and Research and Development |
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538 | (14) |
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538 | (6) |
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539 | (1) |
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539 | (5) |
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Research and Development (R&D) |
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544 | (31) |
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545 | (2) |
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Software Development Costs |
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547 | (2) |
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549 | (1) |
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R&D Purchased in Business Acquisitions |
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550 | (1) |
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550 | (2) |
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Appendix 10: Oil and Gas Accounting |
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552 | (22) |
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Chapter 11 Property, Plant, and Equipment and Intangible Assets: Utilization and Disposition |
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574 | (68) |
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Part A: Depreciation, Depletion, and Amortization |
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575 | (24) |
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Cost Allocation-an Overview |
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575 | (1) |
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Measuring Cost Allocation |
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576 | (2) |
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577 | (1) |
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577 | (1) |
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578 | (1) |
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578 | (4) |
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Time-Based Depreciation Methods |
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578 | (3) |
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Activity-Based Depreciation Methods |
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581 | (1) |
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Decision Makers' Perspective-Selecting A Depreciation Method |
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582 | (2) |
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Concept Review Exercise: Depreciation Methods |
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584 | (1) |
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585 | (2) |
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Decision Makers' Perspective-Understanding Gains and Losses |
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587 | (4) |
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Group and Composite Depreciation Methods |
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588 | (3) |
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Depletion of Natural Resources |
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591 | (2) |
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Amortization of Intangible Assets |
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593 | (3) |
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Intangible Assets Subject to Amortization |
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593 | (2) |
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Intangible Assets Not Subject to Amortization |
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595 | (1) |
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596 | (2) |
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Concept Review Exercise: Depletion and Amortization |
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598 | (1) |
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Part B: Additional Issues |
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599 | (15) |
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599 | (1) |
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Change in Depreciation, Amortization, or Depletion Method |
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600 | (1) |
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601 | (1) |
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602 | (12) |
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603 | (7) |
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610 | (3) |
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Impairment Losses and Earnings Quality |
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613 | (1) |
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Concept Review Exercise: Impairment |
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613 | (1) |
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Part C: Subsequent Expenditures |
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614 | (5) |
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Expenditures Subsequent to Acquisition |
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614 | (30) |
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615 | (1) |
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615 | (1) |
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615 | (1) |
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616 | (1) |
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Costs of Defending Intangible Rights |
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617 | (2) |
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Appendix 11A: Comparison with MACRS (Tax Depreciation) |
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619 | (1) |
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Appendix 11B: Retirement and Replacement Methods of Depreciation |
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620 | (22) |
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642 | (72) |
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Part A: Accounting for Debt Investments |
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644 | (23) |
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Example of a Debt Investment |
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644 | (3) |
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Recording the Purchase of a Debt Investment |
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645 | (1) |
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Recording Interest Revenue |
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645 | (2) |
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Three Classifications of Debt Investments |
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647 | (1) |
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Debt Investments to Be Held to Maturity (HTM) |
|
|
648 | (1) |
|
Unrealized Holding Gains and Losses are Not Recognized for HTM Investments |
|
|
648 | (1) |
|
|
|
648 | (1) |
|
Financial Statement Presentation |
|
|
649 | (1) |
|
Debt Investments Classified as Trading Securities |
|
|
649 | (4) |
|
Adjust Trading Security Investments to Fair Value (2018) |
|
|
650 | (2) |
|
Sale of Trading Security Investments |
|
|
652 | (1) |
|
Financial Statement Presentation |
|
|
653 | (1) |
|
Debt Investments Classified as Available-for-Sale Securities |
|
|
653 | (14) |
|
|
|
654 | (1) |
|
Rationale for AFS Treatment of Unrealized Holding Gains and Losses |
|
|
655 | (1) |
|
Adjust AFS Investments to Fair Value (2018) |
|
|
655 | (1) |
|
|
|
656 | (2) |
|
Financial Statement Presentation |
|
|
658 | (1) |
|
Comparison of HTM, TS, and AFS Approaches |
|
|
659 | (2) |
|
Transfers between Reporting Categories |
|
|
661 | (1) |
|
|
|
661 | (1) |
|
Impairment of Debt Investments |
|
|
662 | (1) |
|
Concept Review Exercise: Various Investment Securities |
|
|
663 | (3) |
|
Financial Statement Presentation and Disclosure |
|
|
666 | (1) |
|
Part B: Accounting for Equity Investments |
|
|
667 | (18) |
|
When the Investor Lacks Significant Influence: Fair Value through Net Income |
|
|
667 | (5) |
|
|
|
668 | (1) |
|
Recognize Investment Revenue |
|
|
668 | (1) |
|
Adjust Equity Investments to Fair Value (2018) |
|
|
668 | (1) |
|
Sell the Equity Investment |
|
|
669 | (1) |
|
Adjust equity investments to Fair Value (2019) |
|
|
670 | (1) |
|
Financial Statement Presentation |
|
|
671 | (1) |
|
When the Investor Has Significant Influence: The Equity Method |
|
|
672 | (2) |
|
Control and Significant Influence |
|
|
672 | (2) |
|
|
|
674 | (1) |
|
Recording Investment Revenue |
|
|
674 | (1) |
|
|
|
674 | (1) |
|
|
|
674 | (5) |
|
Adjustments for Additional Depreciation |
|
|
675 | (1) |
|
No Adjustments for Land or Goodwill |
|
|
676 | (1) |
|
Adjustments for Other Assets and Liabilities |
|
|
676 | (1) |
|
|
|
676 | (1) |
|
When the Investment is Acquired in Mid-Year |
|
|
677 | (1) |
|
When the Investee Reports a Net Loss |
|
|
677 | (1) |
|
What If Conditions Change? |
|
|
677 | (2) |
|
|
|
679 | (1) |
|
Concept Review Exercise: The Equity Method |
|
|
680 | (1) |
|
Decision Makers' Perspective |
|
|
681 | (4) |
|
Appendix 12A: Other Investments (Special Purpose Funds, Investments In Life Insurance Policies) |
|
|
685 | (1) |
|
Appendix 12B: Impairment of Debt Investments |
|
|
686 | (28) |
| Section 3: Liabilities and Shareholders' Equity |
|
|
Chapter 13 Current Liabilities and Contingencies |
|
|
714 | (56) |
|
Part A: Current Liabilities |
|
|
716 | (14) |
|
Characteristics of Liabilities |
|
|
716 | (1) |
|
What Is a Current Liability? |
|
|
717 | (1) |
|
|
|
717 | (4) |
|
Accounts Payable and Trade Notes Payable |
|
|
717 | (1) |
|
|
|
718 | (3) |
|
|
|
721 | (1) |
|
|
|
721 | (3) |
|
|
|
721 | (1) |
|
Salaries, Commissions, and Bonuses |
|
|
722 | (2) |
|
Liabilities from Advance Collections |
|
|
724 | (3) |
|
Deposits and Advances from Customers |
|
|
724 | (2) |
|
|
|
726 | (1) |
|
Collections for Third Parties |
|
|
726 | (1) |
|
A Closer Look at the Current and Noncurrent Classification |
|
|
727 | (3) |
|
Current Maturities of Long-Term Debt |
|
|
727 | (1) |
|
Obligations Callable by the Creditor |
|
|
727 | (1) |
|
When Short-Term Obligations Are Expected to Be Refinanced |
|
|
728 | (1) |
|
Concept Review Exercise: Current Liabilities |
|
|
729 | (1) |
|
|
|
730 | (14) |
|
|
|
730 | (10) |
|
Product Warranties and Guarantees |
|
|
732 | (4) |
|
|
|
736 | (1) |
|
|
|
736 | (2) |
|
Unasserted Claims and Assessments |
|
|
738 | (2) |
|
|
|
740 | (1) |
|
Concept Review Exercise: Contingencies |
|
|
741 | (1) |
|
Decision Makers' Perspective |
|
|
742 | (2) |
|
Appendix 13: Payroll-Related Liabilities |
|
|
744 | (26) |
|
Chapter 14 Bonds and Long-Term Notes |
|
|
770 | (60) |
|
The Nature of Long-Term Debt |
|
|
771 | (1) |
|
|
|
772 | (12) |
|
|
|
772 | (1) |
|
Recording Bonds at Issuance |
|
|
773 | (2) |
|
Determining the Selling Price |
|
|
773 | (2) |
|
Determining Interest-Effective Interest Method |
|
|
775 | (6) |
|
|
|
777 | (1) |
|
|
|
778 | (2) |
|
When Financial Statements are Prepared between Interest Dates |
|
|
780 | (1) |
|
The Straight-Line Method-A Practical Expediency |
|
|
781 | (1) |
|
Concept Review Exercise: Issuing Bonds and Recording Interest |
|
|
782 | (1) |
|
|
|
783 | (1) |
|
|
|
784 | (9) |
|
|
|
784 | (1) |
|
Note Exchanged for Assets or Services |
|
|
784 | (3) |
|
|
|
787 | (1) |
|
Financial Statement Disclosures |
|
|
788 | (1) |
|
Decision Makers' Perspective |
|
|
789 | (2) |
|
Concept Review Exercise: Note With an Unrealistic Interest Rate |
|
|
791 | (2) |
|
Part C: Debt Retired Early, Convertible Into Stock, or Providing an Option to Buy Stock |
|
|
793 | (5) |
|
Early Extinguishment of Debt |
|
|
793 | (1) |
|
|
|
793 | (3) |
|
When the Conversion Option Is Exercised |
|
|
795 | (1) |
|
|
|
796 | (1) |
|
Bonds with Detachable Warrants |
|
|
796 | (2) |
|
Concept Review Exercise: Issuance and Early Extinguishment of Debt |
|
|
798 | (1) |
|
Part D: Option to Report Liabilities at Fair Value |
|
|
798 | (5) |
|
|
|
799 | (1) |
|
Reporting Changes in Fair Value |
|
|
799 | (2) |
|
|
|
801 | (2) |
|
Appendix 14A: Bonds Issued Between Interest Dates |
|
|
803 | (2) |
|
Appendix 14B: Troubled Debt Restructuring |
|
|
805 | (25) |
|
|
|
830 | (76) |
|
Part A: Accounting by the Lessor and Lessee |
|
|
831 | (19) |
|
|
|
832 | (2) |
|
Decision Makers' Perspective-Advantages of Leasing |
|
|
834 | (2) |
|
Finance Leases and Installment Notes Compared |
|
|
835 | (1) |
|
Finance/Sales-Type Leases |
|
|
836 | (5) |
|
Recording Interest Expense/Interest Revenue |
|
|
837 | (2) |
|
Recording Amortization of the Right-of-Use Asset |
|
|
839 | (1) |
|
Concept Review Exercise: Finance Lease/Sales-Type Lease: No Selling Profit |
|
|
839 | (2) |
|
Sales-Type Leases with Selling Profit |
|
|
841 | (2) |
|
|
|
843 | (4) |
|
Recording Interest Expense/Lease Revenue |
|
|
844 | (1) |
|
Recording Amortization of the Right-of-Use Asset |
|
|
844 | (1) |
|
Reporting Lease Expense and Lease Revenue |
|
|
845 | (2) |
|
Decision Makers' Perspective-Financial Statement Impact |
|
|
847 | (2) |
|
|
|
847 | (1) |
|
Concept Review Exercise: Operating Lease |
|
|
847 | (2) |
|
Short-Term Leases-A Shortcut Method |
|
|
849 | (1) |
|
Part B: Uncertainty in Lease Transactions |
|
|
850 | (12) |
|
What if the Lease Term is Uncertain? |
|
|
850 | (1) |
|
Decision Makers' Perspective-Considering the Economic Incentive for Exercising Options |
|
|
851 | (11) |
|
What if the Lease Payments are Uncertain? |
|
|
851 | (1) |
|
What if Lease Terms are Modified? |
|
|
852 | (1) |
|
|
|
852 | (6) |
|
|
|
858 | (2) |
|
Summary of the Lease Uncertainties |
|
|
860 | (2) |
|
Remeasurement of the Lease Liability |
|
|
862 | (1) |
|
Part C: Other Lease Accounting Issues and Reporting Requirements |
|
|
862 | (8) |
|
Nonlease Components of Lease Payments |
|
|
862 | (2) |
|
|
|
864 | (1) |
|
|
|
864 | (1) |
|
|
|
864 | (1) |
|
Concept Review Exercise: Various Lease Accounting Issues: Finance/Sales-Type Lease |
|
|
865 | (2) |
|
Statement of Cash Flow Impact |
|
|
867 | (1) |
|
|
|
867 | (1) |
|
|
|
867 | (1) |
|
|
|
868 | (1) |
|
|
|
868 | (39) |
|
|
|
868 | (1) |
|
|
|
868 | (2) |
|
Appendix 15: Sale-Leaseback Arrangements |
|
|
870 | (27) |
|
Leases: GAAP in Effect Prior to ASU No. 2016-02, A
Chapter Supplement |
|
|
897 | (1) |
|
Part A: Accounting by the Lessor and Lessee |
|
|
897 | (5) |
|
Part B: Additional Differences |
|
|
902 | (4) |
|
Chapter 16 Accounting for Income Taxes |
|
|
906 | (60) |
|
Part A: Deferred Tax Assets and Deferred Tax Liabilities |
|
|
907 | (19) |
|
|
|
908 | (1) |
|
|
|
908 | (1) |
|
|
|
908 | (7) |
|
Balance Sheet and Income Statement Perspectives |
|
|
910 | (1) |
|
Types of Temporary Differences |
|
|
911 | (4) |
|
|
|
915 | (3) |
|
|
|
918 | (2) |
|
Disclosures Linking Tax Expense with Changes in Deferred Tax Assets and Liabilities |
|
|
920 | (2) |
|
|
|
922 | (3) |
|
Concept Review Exercise: Temporary and Permanent Differences |
|
|
925 | (1) |
|
Part B: Other Tax Accounting Issues |
|
|
926 | (40) |
|
|
|
926 | (2) |
|
When Enacted Tax Rates Differ |
|
|
926 | (1) |
|
Changes in Tax Laws or Rates |
|
|
927 | (1) |
|
Multiple Temporary Differences |
|
|
928 | (1) |
|
|
|
929 | (5) |
|
Net Operating Loss Carryforward |
|
|
931 | (1) |
|
Net Operating Loss Carryback |
|
|
932 | (2) |
|
Financial Statement Presentation |
|
|
934 | (1) |
|
Balance Sheet Classification |
|
|
934 | (1) |
|
|
|
934 | (1) |
|
Coping with Uncertainty in Income Taxes |
|
|
935 | (2) |
|
Intraperiod Tax Allocation |
|
|
937 | (2) |
|
Decision Makers' Perspective |
|
|
939 | (1) |
|
Concept Review Exercise: Multiple Differences and Net Operating Loss |
|
|
940 | (26) |
|
Chapter 17 Pensions and Other Postretirement Benefits |
|
|
966 | (68) |
|
Part A: The Nature of Pension Plans |
|
|
968 | (5) |
|
Defined Contribution Pension Plans |
|
|
970 | (1) |
|
Defined Benefit Pension Plans |
|
|
971 | (1) |
|
Pension Expense-An Overview |
|
|
972 | (1) |
|
Part B: The Pension Obligation and Plan Assets |
|
|
973 | (8) |
|
|
|
973 | (6) |
|
Accumulated Benefit Obligation |
|
|
974 | (1) |
|
Vested Benefit Obligation |
|
|
974 | (1) |
|
Projected Benefit Obligation |
|
|
974 | (5) |
|
Illustration Expanded to Consider the Entire Employee Pool |
|
|
979 | (1) |
|
|
|
979 | (2) |
|
Reporting the Funded Status of the Pension Plan |
|
|
981 | (1) |
|
Part C: Determining Pension Expense |
|
|
981 | (5) |
|
The Relationship between Pension Expense and Changes in the PBO and Plan Assets |
|
|
981 | (5) |
|
Components of Pension Expense |
|
|
983 | (2) |
|
|
|
985 | (1) |
|
|
|
986 | (11) |
|
Recording Gains and Losses |
|
|
986 | (2) |
|
Recording the Pension Expense |
|
|
988 | (1) |
|
Reporting Pension Expense in the Income Statement |
|
|
989 | (1) |
|
Recording the Funding of Plan Assets |
|
|
989 | (2) |
|
|
|
991 | (1) |
|
Income Tax Considerations |
|
|
991 | (1) |
|
Putting the Pieces Together |
|
|
992 | (1) |
|
Decision Makers' Perspective |
|
|
993 | (1) |
|
Settlement or Curtailment of Pension Plans |
|
|
994 | (1) |
|
Concept Review Exercise: Pension Plans |
|
|
994 | (3) |
|
Part E: Postretirement Benefits Other Than Pensions |
|
|
997 | (10) |
|
What Is a Postretirement Benefit Plan? |
|
|
998 | (1) |
|
Postretirement Health Benefits and Pension Benefits Compared |
|
|
998 | (1) |
|
Determining the Net Cost of Benefits |
|
|
998 | (1) |
|
Postretirement Benefit Obligation |
|
|
999 | (1) |
|
|
|
999 | (1) |
|
|
|
1000 | (1) |
|
Accounting for Postretirement Benefit Plans Other Than Pensions |
|
|
1000 | (4) |
|
A Comprehensive Illustration |
|
|
1002 | (2) |
|
Decision Makers' Perspective |
|
|
1004 | (1) |
|
Concept Review Exercise: Other Postretirement Benefits |
|
|
1004 | (3) |
|
Appendix 17: Service Method of Allocating Prior Service Cost |
|
|
1007 | (27) |
|
Chapter 18 Shareholders' Equity |
|
|
1034 | (56) |
|
Part A: The Nature of Shareholders' Equity |
|
|
1035 | (8) |
|
Financial Reporting Overview |
|
|
1036 | (3) |
|
|
|
1036 | (1) |
|
|
|
1037 | (1) |
|
|
|
1038 | (1) |
|
Accumulated Other Comprehensive Income |
|
|
1038 | (1) |
|
Reporting Shareholders' Equity |
|
|
1039 | (1) |
|
The Corporate Organization |
|
|
1039 | (4) |
|
|
|
1041 | (1) |
|
|
|
1041 | (1) |
|
|
|
1042 | (1) |
|
|
|
1042 | (1) |
|
|
|
1042 | (1) |
|
The Model Business Corporation Act |
|
|
1043 | (1) |
|
|
|
1043 | (13) |
|
|
|
1043 | (1) |
|
Distinguishing Classes of Shares |
|
|
1044 | (1) |
|
Typical Rights of Preferred Shares |
|
|
1044 | (1) |
|
Is It Equity or Is It Debt? |
|
|
1045 | (1) |
|
|
|
1045 | (1) |
|
Accounting for the Issuance of Shares |
|
|
1046 | (4) |
|
|
|
1046 | (1) |
|
Shares Issued for Noncash Consideration |
|
|
1047 | (1) |
|
More Than One Security Issued for a Single Price |
|
|
1047 | (1) |
|
|
|
1048 | (1) |
|
Concept Review Exercise: Expansion of Corporate Capital |
|
|
1048 | (2) |
|
|
|
1050 | (1) |
|
Decision Makers' Perspective |
|
|
1050 | (6) |
|
Shares Formally Retired or Viewed as Treasury Stock |
|
|
1051 | (1) |
|
Accounting for Retired Shares |
|
|
1051 | (2) |
|
Accounting for Treasury Stock |
|
|
1053 | (1) |
|
|
|
1053 | (1) |
|
Concept Review Exercise: Treasury Stock |
|
|
1055 | (1) |
|
Part C: Retained Earnings |
|
|
1056 | (11) |
|
Characteristics of Retained Earnings |
|
|
1056 | (1) |
|
|
|
1056 | (2) |
|
|
|
1057 | (1) |
|
Retained Earnings Restrictions |
|
|
1057 | (1) |
|
|
|
1057 | (1) |
|
|
|
1058 | (1) |
|
Stock Dividends and Splits |
|
|
1058 | (4) |
|
|
|
1058 | (2) |
|
|
|
1060 | (1) |
|
Stock Splits Effected in the Form of Stock Dividends (Large Stock Dividends) |
|
|
1061 | (1) |
|
Decision Maker's Perspective |
|
|
1062 | (2) |
|
Concept Review Exercise: Changes in Retained Earnings |
|
|
1064 | (3) |
|
Appendix 18: Quasi Reorganizations |
|
|
1067 | (23) |
| Section 4: Additional Financial Reporting Issues |
|
|
Chapter 19 Share-Based Compensation and Earnings Per Share |
|
|
1090 | (68) |
|
Part A: Share-Based Compensation |
|
|
1091 | (15) |
|
|
|
1092 | (2) |
|
|
|
1092 | (1) |
|
|
|
1092 | (2) |
|
|
|
1094 | (10) |
|
|
|
1094 | (1) |
|
Recognizing the Fair Value of Options |
|
|
1095 | (3) |
|
When Options are Exercised |
|
|
1098 | (1) |
|
When Unexercised Options Expire |
|
|
1098 | (2) |
|
Plans with Graded Vesting |
|
|
1100 | (2) |
|
Plans with Performance or Market Conditions |
|
|
1102 | (2) |
|
Employee Share Purchase Plans |
|
|
1104 | (1) |
|
Decision Makers' Perspective |
|
|
1104 | (1) |
|
Concept Review Exercise: Share-Based Compensation Plans |
|
|
1105 | (1) |
|
Part B: Earnings Per Share |
|
|
1106 | (24) |
|
|
|
1106 | (4) |
|
|
|
1107 | (1) |
|
Stock Dividends and Stock Splits |
|
|
1108 | (1) |
|
|
|
1109 | (1) |
|
Earnings Available to Common Shareholders |
|
|
1110 | (1) |
|
Diluted Earnings Per Share |
|
|
1110 | (6) |
|
|
|
1110 | (1) |
|
Options, Rights, and Warrants |
|
|
1111 | (2) |
|
|
|
1113 | (3) |
|
|
|
1116 | (4) |
|
Options, Warrants, Rights |
|
|
1116 | (1) |
|
|
|
1117 | (1) |
|
Order of Entry for Multiple Convertible Securities |
|
|
1118 | (1) |
|
Concept Review Exercise: Basic and Diluted EPS |
|
|
1119 | (1) |
|
|
|
1120 | (6) |
|
Components of the "Proceeds" in the Treasury Stock Method |
|
|
1120 | (1) |
|
Restricted Stock awards in EPS Calculations |
|
|
1121 | (1) |
|
Contingently Issuable Shares |
|
|
1122 | (1) |
|
Summary of the Effect of Potential Common Shares on Earnings Per Share |
|
|
1122 | (1) |
|
|
|
1123 | (1) |
|
Financial Statement Presentation of Earnings Per Share Data |
|
|
1124 | (2) |
|
Decision Makers' Perspective |
|
|
1126 | (1) |
|
Concept Review Exercise: Additional EPS Issues |
|
|
1127 | (3) |
|
Appendix 19A: Option-Pricing Theory |
|
|
1130 | (1) |
|
Appendix 19B: Stock Appreciation Rights |
|
|
1131 | (27) |
|
Chapter 20 Accounting Changes and Error Corrections |
|
|
1158 | (46) |
|
Part A: Accounting Changes |
|
|
1159 | (15) |
|
Change in Accounting Principle |
|
|
1161 | (1) |
|
Decision Makers' Perspective-Motivation for Accounting Choices |
|
|
1161 | (7) |
|
The Retrospective Approach: Most Changes in Accounting Principle |
|
|
1162 | (4) |
|
The Modified Retrospective Approach |
|
|
1166 | (1) |
|
|
|
1166 | (2) |
|
Change in Accounting Estimate |
|
|
1168 | (3) |
|
Changing Depreciation, Amortization, and Depletion Methods |
|
|
1169 | (2) |
|
Change in Reporting Entity |
|
|
1171 | (1) |
|
|
|
1171 | (2) |
|
Concept Review Exercise: Accounting Changes |
|
|
1173 | (1) |
|
Part B: Correction of Accounting Errors |
|
|
1174 | (30) |
|
|
|
1174 | (1) |
|
Error Correction Illustrated |
|
|
1175 | (30) |
|
Error Discovered in the Same Reporting Period That It Occurred |
|
|
1175 | (1) |
|
Error Affecting Previous Financial Statements, but Not Net Income |
|
|
1176 | (1) |
|
Error Affecting a Prior Year's Net Income |
|
|
1177 | (1) |
|
Concept Review Exercise: Correction of Errors |
|
|
1181 | (23) |
|
Chapter 21 The Statement of Cash Flows Revisited |
|
|
1204 | |
|
Part A: The Content and Value of the Statement of Cash Flows |
|
|
1205 | (13) |
|
Decision Makers' Perspective-Usefulness of Cash Flow Information |
|
|
1205 | (1) |
|
Cash Inflows and Outflows |
|
|
1206 | (1) |
|
Structure of the Statement of Cash Flows |
|
|
1207 | (8) |
|
The Importance of Cash Flows in an Economic Decline |
|
|
1208 | (1) |
|
Cash, Cash Equivalents, and Restricted Cash |
|
|
1209 | (1) |
|
Primary Elements of the Statement of Cash Flows |
|
|
1210 | (5) |
|
Preparation of the Statement of Cash Flows |
|
|
1215 | (3) |
|
Part B: Preparing the SCF: Direct Method of Reporting Cash Flows from Operating Activities |
|
|
1218 | (22) |
|
|
|
1218 | (22) |
|
Income Statement Accounts |
|
|
1220 | (8) |
|
|
|
1228 | (1) |
|
Concept Review Exercise: Comprehensive Review |
|
|
1237 | (3) |
|
Part C: Preparing the SCF: Indirect Method of Reporting Cash Flows from Operating Activities |
|
|
1240 | (7) |
|
Getting There through the Back Door |
|
|
1240 | (1) |
|
Components of Net Income That Do Not Increase or Decrease Cash |
|
|
1241 | (1) |
|
Components of Net Income That Do Increase or Decrease Cash |
|
|
1241 | (1) |
|
Comparison with the Direct Method |
|
|
1242 | (2) |
|
Reconciliation of Net Income to Cash Flows from Operating Activities |
|
|
1244 | (1) |
|
Decision Makers' Perspective-Cash Flow Ratios |
|
|
1245 | (2) |
|
Appendix 21A: Spreadsheet for the Indirect Method |
|
|
1247 | (4) |
|
Appendix 21B: The T-Account Method of Preparing the Statement of Cash Flows |
|
|
1251 | |
| Appendix A: Derivatives |
|
A-1 | |
| Appendix B: GAAP Comprehensive Case |
|
B-0 | |
| Appendix C: IFRS Comprehensive Case |
|
C-0 | |
| Glossary |
|
G-1 | |
| Index |
|
I-1 | |
| Present and Future Value Tables |
|
P-1 | |
