Advanced Accounting, Eighth Edition

ISBN-13: 9781119794653 / Angielski / Miękka / 2023

Jeter

Spis treści

1 Introduction to Business Combinations and the Conceptual Framework 1Learning Objectives 11.1 Growth Through Mergers 11.2 Nature of The Combination 41.3 Business Combinations: Why? Why Not? 51.4 Business Combinations: Historical Perspective 81.5 Terminology and Types of Combinations 111.6 Takeover Premiums 131.7 Avoiding the Pitfalls Before (and After) the Deal 151.8 Determining Price and Method of Payment in Business Combinations 171.9 Alternative Concepts of Consolidated Financial Statements 211.10 FASB'S Conceptual Framework 26Summary 32Questions 33Analyzing Financial Statements 33Exercises 36ASC Exercises 382 Accounting for Business Combinations 39Learning Objectives 392.1 Accounting Standards on Business Combinations: Current Status and Background 392.2 Illustration of Acquisition Accounting 452.3 Bargain Purchase Accounting Illustration (Purchase Price Below Fair Value of Identifiable Net Assets) 492.4 Measurement Period and Measurement Period Adjustments 502.5 Goodwill Impairment Test 512.6 Contingent Consideration (Earnouts) 562.7 Pro Forma Statements and Disclosure Requirement 612.8 Leveraged Buyouts 63Summary 63Questions 65Analyzing Financial Statements 65Exercises 70Problems 773 Consolidated Financial Statements--Date of Acquisition 82Learning Objectives 823.1 Definitions of Subsidiary and Control 843.2 Requirements for the Inclusion of Subsidiaries in the Consolidated Financial Statements 873.3 Reasons for Subsidiary Companies 883.4 Consolidated Financial Statements 893.5 Investments at the Date of Acquisition 903.6 Consolidated Balance Sheets: The Use of Workpapers 923.7 A Comprehensive Illustration--More ThanOne Subsidiary Company 1093.8 Limitations of Consolidated Statements 112Summary 113Questions 114Analyzing Financial Statements 115Exercises 116Problems 1214 Consolidated Financial Statements After Acquisition 127Learning Objectives 1274.1 Accounting for Investments by the Cost, Partial Equity, and Complete Equity Methods 1284.2 Consolidated Statements After Acquisition--Cost Method 1374.3 Recording Investments in Subsidiaries--Equity Method (Partial or Complete) 1494.4 Elimination of Intercompany Revenue and Expense Items 1604.5 Interim Acquisitions of Subsidiary Stock 1614.6 Consolidated Statement of Cash Flows 1674.7 Illustration of Preparation of a Consolidated Statement of Cash Flows--Year of Acquisition 171Summary 174Questions 175Analyzing Financial Statements 176Exercises 178Problems 1845 Allocation and Depreciation of Differences Between Implied And Book Values 198Learning Objectives 1985.1 Computation and Allocation of the Difference Between Implied and Book Values to Assets and Liabilities of Subsidiary--Acquisition Date 2015.2 Effect of Differences Between Implied and Book Values on Consolidated Net Income--Year Subsequent to Acquisition 2075.3 Consolidated Statements Workpaper--Using the Cost Method 2095.4 Controlling and Noncontrolling Interests in Consolidated Net Income and Retained Earnings--Using the Cost Method 2215.5 Consolidated Statements Workpaper--Using Partial Equity Method 2235.6 Controlling and Noncontrolling Interests in Consolidated Net Income and RetainedEarnings--Using Partial Equity Method 2305.7 Consolidated Statements Workpaper--Using Complete Equity Method 2325.8 Controlling Interest in Consolidated Net Income and Retained Earnings--Using Complete Equity Method 2405.9 Additional Considerations Relating to Treatment of Difference Between Implied and Book Values 2415.10 Push Down Accounting 250Summary 255Questions 256Analyzing Financial Statements 257Exercises 259Problems 2656 Elimination of Unrealized Profit on Intercompany Sales of Inventory 286Learning Objectives 2866.1 Effects of Intercompany Sales of Merchandise on the Determination of Consolidated Balances 2876.2 Cost Method: Consolidated Statements Workpaper--Upstream Sales 2976.3 Cost Method--Analysis of ConsolidatedNet Income and Consolidated Retained Earnings 3026.4 Consolidated Statements Workpaper--Partial Equity Method 3056.5 Partial Equity Method--Analysis of Consolidated Net Income and Consolidated Retained Earnings 3106.6 Consolidated Statements Workpaper--Complete Equity Method 3116.7 Complete Equity Method--Analysis of Consolidated Net Income and ConsolidatedRetained Earnings 3166.8 Summary of Workpaper Entries Relating to Intercompany Sales of Inventory 3176.9 Intercompany Profit Prior to Parent-Subsidiary Affiliation 317Summary 318Questions 319Analyzing Financial Statements 319Exercises 321Problems 3247 Elimination of Unrealized Gains Or Losses on Intercompany Sales of Property and Equipment 337Learning Objectives 3377.1 Intercompany Sales of Land (Nondepreciable Property) 3387.2 Intercompany Sales of Depreciable Property (Machinery, Equipment, and Buildings) 3417.3 Consolidated Statements Workpaper--Cost and Partial Equity Methods 3487.4 Calculation of Consolidated Net Income and Consolidated Retained Earnings 3587.5 Consolidated Statements Workpaper--Complete Equity Method 3617.6 Calculation and Allocation of Consolidated Net Income; Consolidated Retained Earnings:Complete Equity Method 3677.7 Summary of Workpaper Entries Relating to Intercompany Sales of Equipment 3687.8 Intercompany Interest, Rents, and Service Fees 368Summary 371Questions 372Analyzing Financial Statements 373Exercises 373Problems 3768 Changes in Ownership Interest 388Learning Objectives 3888.1 Changes in Ownership 3888.2 Parent Acquires Subsidiary Stock Through Several Open-Market Purchases--Cost Method 3918.3 Parent Sells Subsidiary Stock Investment on the Open Market--Cost Method 3948.4 Equity Method--Purchases and Sales of Subsidiary Stock by the Parent 3988.5 Parent Sells Subsidiary Stock Investment on the Open Market 4038.6 Subsidiary Issues Stock 405Summary 411Questions 412Analyzing Financial Statements 412Exercises 413Problems 4169 Insolvency--Liquidation And Reorganization 426Learning Objectives 4269.1 Contractual Agreements 4289.2 Bankruptcy 4309.3 Liquidation (Chapter 7) 4349.4 Reorganization Under the Reform Act (chapter 11) 4359.5 Trustee Accounting and Reporting 4479.6 Bankruptcy Prediction Models 453Summary 456Questions 457Analyzing Financial Statements 458Exercises 460Problems 46610 International Financial Reporting Standards 473Learning Objectives 47310.1 The Increasing Importance of International Accounting Standards 47310.2 Historical Perspective 47510.3 GAAP Hierarchy--U.S. Versus IFRS 47710.4 Similarities and Differences Between U.S. GAAP and IFRS 47810.5 Business Combination and Consolidation--U.S. GAAP Versus IFRS 48810.6 International Convergence Issues 507Summary 512Questions 512Analyzing Financial Statements 513Exercises 516Problems 51911 Accounting for Foreign Currency Transactions and Hedging Foreign Exchange Risk 525Learning Objectives 52511.1 Exchange Rates--Means of Translation 52611.2 Measured Versus Denominated 52911.3 Foreign Currency Transactions 53011.4 Using Forward Contracts as a Hedge 539Summary 560Questions 561Analyzing Financial Statements 561Exercises 562Problems 57012 Translation of Financial Statements of Foreign Affiliates 577Learning Objectives 57712.1 Accounting for Operations in Foreign Countries 57812.2 Translating Financial Statements of Foreign Affiliates 57912.3 Objectives of Translation 58012.4 Translation Methods 58312.5 Identifying the Functional Currency 58312.6 Translation of Foreign Currency Financial Statements 58412.7 Translation of Foreign Financial Statements Illustrated 58912.8 Financial Statement Disclosure 59812.9 Constant Currency Non-GAAP Adjustments 600Summary 602Appendix 12A: Accounting for a Foreign Affiliate and Preparation of Consolidated StatementsWorkpaper Illustrated 603Appendix 12B: Preparing the Consolidated Statement of Cash Flows When the Consolidated Entity Includes a Foreign Subsidiary 610Questions 616Analyzing Financial Statements 617Exercises 619Problems 62713 Reporting for Segments and for Interim Financial Periods 636Learning Objectives 63613.1 Need for Disaggregated Financial Data 63713.2 Standards of Financial Accounting and Reporting 63713.3 Interim Financial Reporting 652Summary 661Appendix: The Difference Between Reportable Segments and Reporting Units 662Questions 663Analyzing Financial Statements 664Exercises 667Problems 67114 Partnerships: Formation, Operation, And Ownership Changes 675Learning Objectives 67514.1 Partnership Defined 67714.2 Reasons for Forming a Partnership 67714.3 Characteristics of a Partnership 67814.4 Partnership Agreement 68014.5 Accounting for a Partnership 68214.6 Special Problems in Allocation of Income and Loss 69014.7 Financial Statement Presentation 69214.8 Changes in the Ownership of the Partnership 69314.9 Section A: Admission of a New Partner (Not a Business Combination) 69514.10 Section B: Admission of a New Partner that Qualifies as a Business Combination: GAAP Requires Goodwill Method 70314.11 Section C: Withdrawal of a Partner 706Summary 709Questions 711Exercises 711Problems 71815 Partnership Liquidation 725Learning Objectives 72515.1 Steps in the Liquidation Process 72615.2 Priorities of Partnership and Personal Creditors 72715.3 Simple Liquidation Illustrated 73015.4 Installment Liquidation 73215.5 Incorporation of a Partnership 740Summary 742Questions 743Exercises 743Problems 74916 Introduction to Fund Accounting 755Learning Objectives 75516.1 Classifications of Nonbusiness Organizations 75616.2 Distinctions Between Nonbusiness Organizations and Profit-Oriented Enterprises 75716.3 Financial Accounting and Reporting Standards for Nonbusiness Organizations 75816.4 Fund Accounting 76216.5 Comprehensive Illustration--General Fund 78016.6 Reporting Inventory and Prepayments in the Financial Statements 78916.7 Recent Proposal by the GASB 791Summary 792Appendix 16A: City of Atlanta Partial Financial Statements 793Questions 795Analyzing Financial Statements 795Exercises 796Problems 80117 Introduction to Accounting For State and Local Governmental Units 809Learning Objectives 80917.1 The History of Generally Accepted Governmental Accounting Standards 81217.2 The Structure of Governmental Accounting 81417.3 Governmental Fund Entities 81617.4 Proprietary Funds 83517.5 Fiduciary Funds 84017.6 Capital Assets and Long-Term Debt 84117.7 External Reporting Requirements (GASB Statement No. 34) 84617.8 Government Fund-Based Reporting 84717.9 Government-Wide Reporting 850Summary 855Appendix 17A: Government-Wide Financial Statements--City of Atlanta 857Questions 861Analyzing Financial Statements 861Exercises 863Problems 87018 Accounting for Nongovernment Nonbusiness Organizations: Colleges And Universities, Hospitals and other Health Care Organizations 883Learning Objectives 88318.1 Sources of Generally Accepted Accounting Standards for Nongovernment Nonbusiness Organizations 88518.2 Financial Reporting for Not-For-Profit Entities 88718.3 Fund Accounting and Accrual Accounting 89118.4 Contributions 89418.5 Accounting for Current Funds 89918.6 Accounting for Plant Funds 90218.7 Accounting for Endowment Funds 90718.8 Accounting for Investments 90818.9 Accounting for Loan Funds 91018.10 Accounting for Agency (Custodial) Funds 91118.11 Accounting for Annuity and Life Income Funds 91118.12 Issues Relating to Colleges and Universities 912Summary 913Appendix 18A 914Questions 917Analyzing Financial Statements 917Exercises 918Problems 926Glossary G-1Appendix PV: Tables of Present Values A-1Index I-1Appendix 2A: Deferred Taxes in Business Combinations (Available Online)Appendix 3A: Deferred Taxes on the Date of Acquisition (Available Online)Appendix 3B: Consolidation of Variable Interest Entities (Available Online)Appendix 4A: Deferred Tax Consequences When Affiliates File Separate Income Tax Returns--Undistributed Income (Available Online)Appendix 6A: Deferred Taxes and Intercompany Sales of Inventory (Available Online)Appendix 7A: Deferred Taxes Consequences Related to Intercompany Sales of Equipment (AvailableOnline)Chapter 19: Intercompany Bond Holdings and Miscellaneous Topics--Consolidated FinancialStatements (Available Online)