Intermediate Accounting IFRS

ISBN-13: 9781119607519 / Angielski / Miękka / 2020 / 1408 str.

Donald E. Kieso;Jerry J. Weygandt;Terry D. Warfield

Spis treści

1 Financial Reporting and Accounting Standards 1-1Continuing Evolution of International Financial Reporting 1-1Global Markets 1-3Financial Statements and Financial Reporting 1-4Accounting and Capital Allocation 1-4High-Quality Standards 1-5Objective of Financial Reporting 1-6General-Purpose Financial Statements 1-6Equity Investors and Creditors 1-6What Do the Numbers Mean? Don't Forget Management Stewardship 1-6Entity Perspective 1-6Decision-Usefulness 1-7Standard-Setting Organizations 1-7International Organization of Securities Commissions (IOSCO) 1-8What Do the Numbers Mean? What About the Little Guy? 1-8International Accounting Standards Board (IASB) 1-9Hierarchy of IFRS 1-11Financial Reporting Challenges 1-12IFRS in a Political Environment 1-12What Do the Numbers Mean? Fair Consequences? 1-13The Expectations Gap 1-13Significant Financial Reporting Issues 1-14Ethics in the Environment of Financial Accounting 1-14International Convergence 1-15What Do the Numbers Mean? Can You Do That? 1-15Conclusion 1-16Global Accounting Insights 1-242 Conceptual Framework for Financial Reporting 2-1What is It? 2-1Conceptual Framework 2-3Need for a Conceptual Framework 2-3What Do the Numbers Mean? What's Your Principle? 2-4Development of a Conceptual Framework 2-4Overview of the Conceptual Framework 2-5Basic Objective 2-5Fundamental Concepts 2-6Qualitative Characteristics of Accounting Information 2-6What Do the Numbers Mean? Unfaithful--For 20 Years 2-10What Do the Numbers Mean? Show Me the Earnings! 2-12Basic Elements 2-12Assumptions 2-13Economic Entity Assumption 2-14Going Concern Assumption 2-14Monetary Unit Assumption 2-14Periodicity Assumption 2-15Accrual Basis of Accounting 2-15Measurement, Recognition, and Disclosure Concepts 2-16Basic Principles of Accounting 2-16Cost Constraint 2-21What Do the Numbers Mean? Let's Be Prudent 2-22Summary of the Structure 2-23Global Accounting Insights 2-393 The Accounting Information System 3-1Working on the Chain Gang 3-2Accounting Information System 3-2Basic Terminology 3-3Debits and Credits 3-4The Accounting Equation 3-4Financial Statements and Ownership Structure 3-6The Accounting Cycle 3-8Record and Summarize Basic Transactions 3-9Journalizing 3-9Posting 3-10Chart of Accounts 3-11The Recording Process Illustrated 3-11Trial Balance 3-17What Do the Numbers Mean? Change Management 3-18Identify and Prepare Adjusting Entries 3-18Types of Adjusting Entries 3-19Adjusting Entries for Deferrals 3-19Adjusting Entries for Accruals 3-24Adjusted Trial Balance 3-29Preparing Financial Statements 3-29Closing 3-30Post-Closing Trial Balance 3-33Reversing Entries--An Optional Step 3-33What Do the Numbers Mean? Hey, It's Complicated 3-34The Accounting Cycle Summarized 3-34Financial Statements for a Merchandising Company 3-34Income Statement 3-35Retained Earnings Statement 3-35Statement of Financial Position 3-36Closing Entries 3-37Appendix 3A Cash-Basis Accounting versus Accrual-Basis Accounting 3-37Conversion from Cash Basis to Accrual Basis 3-39Service Revenue Computation 3-39Operating Expense Computation 3-40Theoretical Weaknesses of the Cash Basis 3-41Appendix 3B Using Reversing Entries 3-42Illustration of Reversing Entries--Accruals 3-42Illustration of Reversing Entries--Deferrals 3-43Summary of Reversing Entries 3-44Appendix 3C Using a Worksheet: The Accounting Cycle Revisited 3-44Worksheet Columns 3-46Trial Balance Columns 3-46Adjustments Columns 3-46Adjustments Entered on the Worksheet 3-46Adjusted Trial Balance 3-47Income Statement and Statement of Financial Position Columns 3-47Preparing Financial Statements from a Worksheet 3-47Global Accounting Insights 3-704 Income Statement and Related Information 4-1Financial Statements Are Changing 4-2Income Statement 4-3Usefulness of the Income Statement 4-3Limitations of the Income Statement 4-4Quality of Earnings 4-4What Do the Numbers Mean? Four: The Loneliest Number 4-5Content and Format of the Income Statement 4-5Elements of the Income Statement 4-5Intermediate Components of the Income Statement 4-6Condensed Income Statements 4-8What Do the Numbers Mean? You May Need a Map 4-8Reporting Various Income Items 4-9Gross Profit 4-9Income from Operations 4-9Income Before Income Tax 4-12Net Income 4-13Earnings per Share 4-13Discontinued Operations 4-14Allocation to Non-Controlling Interest 4-16Summary 4-17What Do the Numbers Mean? Different Income Concepts 4-17Accounting Changes and Errors 4-18Changes in Accounting Principle 4-18Changes in Accounting Estimates 4-19Corrections of Errors 4-20Summary 4-20Related Equity Statements 4-21Retained Earnings Statement 4-21Comprehensive Income Statement 4-21Statement of Changes in Equity 4-23Global Accounting Insights 4-435 Statement of Financial Position and Statement of Cash Flows 5-1Hey, It Doesn't Balance! 5-2Statement of Financial Position 5-3Usefulness of the Statement of Financial Position 5-3Limitations of the Statement of Financial Position 5-4Classification in the Statement of Financial Position 5-5What Do the Numbers Mean? What Comes First? 5-6What Do the Numbers Mean? Warning Signals 5-14Preparation of the Statement of Financial Position 5-14Statement of Cash Flows 5-16Purpose of the Statement of Cash Flows 5-16Content of the Statement of Cash Flows 5-16What Do the Numbers Mean? Watch That Cash Flow 5-18Preparation of the Statement of Cash Flows 5-18Usefulness of the Statement of Cash Flows 5-21Additional Information 5-24Notes to the Financial Statements 5-24Techniques of Disclosure 5-27Other Guidelines 5-28Evolving Issue Statement of Financial Position Reporting: Gross or Net? 5-29Appendix 5A Ratio Analysis--A Reference 5-30Using Ratios to Analyze Performance 5-30Global Accounting Insights 5-566 Accounting and the Time Value of Money 6-1How Do I Measure That? 6-2Basic Time Value Concepts 6-3Applications of Time Value Concepts 6-3The Nature of Interest 6-4Simple Interest 6-5Compound Interest 6-5What Do the Numbers Mean? A Pretty Good Start 6-6Fundamental Variables 6-8Single-Sum Problems 6-9Future Value of a Single Sum 6-9Present Value of a Single Sum 6-11Solving for Other Unknowns in Single-Sum Problems 6-13Annuities (Future Value) 6-14Future Value of an Ordinary Annuity 6-14Future Value of an Annuity Due 6-17Examples of Future Value of Annuity Problems 6-18Annuities (Present Value) 6-20Present Value of an Ordinary Annuity 6-20What Do the Numbers Mean? Up in Smoke 6-22Present Value of an Annuity Due 6-22Examples of Present Value of Annuity Problems 6-23Other Time Value of Money Issues 6-25Deferred Annuities 6-25Valuation of Long-Term Bonds 6-27Effective-Interest Method of Amortization of Bond Discount or Premium 6-28Present Value Measurement 6-297 Cash and Receivables 7-1Is Your Cash Trapped? 7-1Cash 7-2Reporting Cash 7-3Summary of Cash-Related Items 7-5Evolving Issue What Counts for Cash? 7-5Receivables 7-6Recognition of Accounts Receivable 7-7Measurement of the Transaction Price 7-8Variable Consideration 7-8Valuation of Accounts Receivable 7-10Direct Write-Off Method for Uncollectible Accounts 7-11Allowance Method for Uncollectible Accounts 7-11Notes Receivable 7-15Recognition of Notes Receivable 7-15Valuation of Notes Receivable 7-19Other Issues Related to Receivables 7-19Derecognition of Receivables 7-19Presentation and Analysis 7-23What Do the Numbers Mean? Securitizations--Good or Bad? 7-26Appendix 7A Cash Controls 7-26Using Bank Accounts 7-26The Imprest Petty Cash System 7-27Physical Protection of Cash Balances 7-28Reconciliation of Bank Balances 7-29Global Accounting Insights 7-568 Valuation of Inventories: A Cost-Basis Approach 8-1It Should Be Easy, but It Isn't! 8-1Inventory Issues 8-3Classification 8-3Inventory Cost Flow 8-4Inventory Control 8-6Determining Cost of Goods Sold 8-7What Do the Numbers Mean? Staying Lean 8-7Goods and Costs Included in Inventory 8-7Goods Included in Inventory 8-7What Do the Numbers Mean? A Retail Apocalypse! 8-10Costs Included in Inventory 8-10Which Cost Flow Assumption to Adopt? 8-12Specific Identification 8-12Average-Cost 8-13First-In, First-Out (FIFO) 8-14Inventory Valuation Methods--Summary Analysis 8-16Effect of Inventory Errors 8-17Ending Inventory Misstated 8-17Purchases and Inventory Misstated 8-18Appendix 8A LIFO Cost Flow Assumption 8-19Last-In, First-Out (LIFO) 8-19Inventory Valuation Methods--Summary Analysis 8-209 Inventories: Additional Valuation Issues 9-1Not What It Seems to Be 9-2Lower-of-Cost-or-Net Realizable Value (LCNRV) 9-3Net Realizable Value 9-3Illustration of LCNRV 9-4Methods of Applying LCNRV 9-4Recording Net Realizable Value Instead of Cost 9-5Use of an Allowance 9-6Recovery of Inventory Loss 9-6Evaluation of the LCNRV Rule 9-7Valuation Bases 9-7Net Realizable Value 9-7Relative Standalone Sales Value 9-10Purchase Commitments--A Special Problem 9-11The Gross Profit Method of Estimating Inventory 9-12Computation of Gross Profit Percentage 9-13Evaluation of Gross Profit Method 9-15What Do the Numbers Mean? I'll Trade You 9-15Retail Inventory Method 9-15Retail-Method Concepts 9-16Retail Inventory Method with Markupsand Markdowns--Conventional Method 9-17Special Items Relating to Retail Method 9-19Evaluation of Retail Inventory Method 9-20Presentation and Analysis 9-20Presentation of Inventories 9-21Analysis of Inventories 9-22Global Accounting Insights 9-4210 Acquisition and Disposition of Property, Plant, and Equipment 10-1Watch Your Spending 10-1Property, Plant, and Equipment 10-2Acquisition of Property, Plant, and Equipment 10-3Cost of Land 10-4Cost of Buildings 10-4Cost of Equipment 10-5Self-Constructed Assets 10-5Borrowing Costs During Construction 10-6Qualifying Assets 10-7Capitalization Period 10-7Amount to Capitalize 10-7Disclosures 10-10Valuation of Property, Plant, and Equipment 10-11Cash Discounts 10-11Deferred-Payment Contracts 10-11Lump-Sum Purchases 10-12Issuance of Shares 10-13Exchanges of Non-Monetary Assets 10-13Government Grants 10-16Costs Subsequent to Acquisition 10-20Additions 10-20Improvements and Replacements 10-21Rearrangement and Reorganization 10-21Repairs 10-22What Do the Numbers Mean? Disconnected 10-22Summary of Costs Subsequent to Acquisition 10-23Disposition of Property, Plant, and Equipment 10-23Sale of Plant Assets 10-23Involuntary Conversion 10-2411 Depreciation, Impairments, and Depletion 11-1Here Come the Write-Offs 11-2Depreciation--A Method of Cost Allocation 11-3Factors Involved in the Depreciation Process 11-3Methods of Depreciation 11-4Other Depreciation Issues 11-8Component Depreciation 11-8Depreciation and Partial Periods 11-9Depreciation and Replacement of Property, Plant, and Equipment 11-10Revision of Depreciation Rates 11-10What Do the Numbers Mean? Depreciation Choices 11-11Impairments 11-12Recognizing Impairments 11-12Impairment Illustrations 11-13Reversal of Impairment Loss 11-14Cash-Generating Units 11-15Impairment of Assets to Be Disposed Of 11-15Depletion 11-16Establishing a Depletion Base 11-17Write-Off of Resource Cost 11-18Estimating Recoverable Reserves 11-19Liquidating Dividends 11-19Presentation on the Financial Statements 11-20Revaluations 11-21Recognizing Revaluations 11-21Revaluation Issues 11-22What Do the Numbers Mean? To Revalue or Not 11-23Presentation and Analysis 11-23Presentation of Property, Plant, Equipment, and Mineral Resources 11-23Analysis of Property, Plant, and Equipment 11-25Appendix 11A Revaluation of Property, Plant, and Equipment 11-26Revaluation of Land 11-27Revaluation--2022: Valuation Increase 11-27Revaluation--2023: Decrease below Historical Cost 11-27Revaluation--2024: Recovery of Impairment Loss 11-28Revaluation of Depreciable Assets 11-29Revaluation--2022: Valuation Increase 11-29Revaluation--2023: Decrease below Historical Cost 11-30Revaluation--2024: Recovery of Impairment Loss 11-31Global Accounting Insights 11-5512 Intangible Assets 12-1Is This Sustainable? 12-1Intangible Asset Issues 12-2Characteristics 12-2Valuation 12-3Amortization of Intangibles 12-4Types of Intangible Assets 12-6Marketing-Related Intangible Assets 12-6Customer-Related Intangible Assets 12-6Artistic-Related Intangible Assets 12-7Contract-Related Intangible Assets 12-8Technology-Related Intangible Assets 12-8What Do the Numbers Mean? Patent Battles 12-9What Do the Numbers Mean? Patents--Strategic Lifeblood 12-10Goodwill 12-10Recording Goodwill 12-11Goodwill Write-Off 12-13Bargain Purchase 12-13Impairment and Presentation of Intangible Assets 12-13Impairment of Limited-Life Intangibles 12-14Reversal of Impairment Loss 12-14Impairment of Indefinite-Life Intangibles Other Than Goodwill 12-15Impairment of Goodwill 12-15Presentation of Intangible Assets 12-17Research and Development Costs 12-18What Do the Numbers Mean? Global R&D Incentives 12-18Identifying R&D Activities 12-19Accounting for R&D Activities 12-20Evolving Issue Recognition of R&D and Internally Generated Intangibles 12-21Costs Similar to R&D Costs 12-21What Do the Numbers Mean? Branded 12-22Presentation of Research and Development Costs 12-23Global Accounting Insights 12-4213 Current Liabilities, Provisions, and Contingencies 13-1Now You See It, Now You Don't 13-2Current Liabilities 13-3Accounts Payable 13-4Notes Payable 13-4Current Maturities of Long-Term Debt 13-6Short-Term Obligations Expected to Be Refinanced 13-6What Do the Numbers Mean? Going, Going, Gone 13-7Dividends Payable 13-8Customer Advances and Deposits 13-8Unearned Revenues 13-8What Do the Numbers Mean? SAP's Liabilities--Good or Bad? 13-9Sales and Value-Added Taxes Payable 13-9Income Taxes Payable 13-11Employee-Related Liabilities 13-12Provisions 13-15Recognition of a Provision 13-15Measurement of Provisions 13-17Common Types of Provisions 13-17What Do the Numbers Mean? Frequent Flyers 13-21Evolving Issue Greenhouse Gases: Let's Be Standard-Setters 13-23Disclosures Related to Provisions 13-26Contingencies 13-27Contingent Liabilities 13-27Contingent Assets 13-28Presentation and Analysis 13-29Presentation of Current Liabilities 13-29Analysis of Current Liabilities 13-3014 Non-Current Liabilities 14-1Going Long 14-1Bonds Payable 14-3Types of Bonds 14-3Issuing Bonds 14-4What Do the Numbers Mean? All About Bonds 14-4Valuation and Accounting for Bonds Payable 14-4What Do the Numbers Mean? How About a 100-Year Bond? 14-7Effective-Interest Method 14-7Long-Term Notes Payable 14-12Notes Issued at Face Value 14-12Notes Not Issued at Face Value 14-12What Do the Numbers Mean? Negative Interest Rates--Is That Even Possible? 14-14Special Notes Payable Situations 14-15Mortgage Notes Payable 14-17Extinguishment of Non-Current Liabilities 14-18Extinguishment with Cash Before Maturity 14-18Extinguishment by Exchanging Assets orSecurities 14-19Extinguishment with Modification of Terms 14-20Presentation and Analysis 14-22Fair Value Option 14-22Off-Balance-Sheet Financing 14-23Evolving Issue Off-and-On Reporting 14-25Presentation of Non-Current Liabilities 14-25Analysis of Non-Current Liabilities 14-26Global Accounting Insights 14-4515 Equity 15-1It's a Global Market 15-1Corporate Capital 15-3Corporate Form 15-3What Do the Numbers Mean? A Class (B) Act 15-5Components of Equity 15-5Issuance of Shares 15-6Preference Shares 15-9Reacquisition of Shares 15-11Purchase of Treasury Shares 15-12Sale of Treasury Shares 15-14Retiring Treasury Shares 15-15What Do the Numbers Mean? Signals to Buy? 15-15Dividend Policy 15-15Financial Condition and Dividend Distributions 15-16Types of Dividends 15-16What Do the Numbers Mean? Dividends Up, Dividends Down 15-18Share Dividends and Share Splits 15-20Presentation and Analysis of Equity 15-22Presentation of Equity 15-22Analysis 15-24Appendix 15A Dividend Preferences and Book Value per Share 15-26Dividend Preferences 15-26Book Value per Share 15-27Global Accounting Insights 15-4816 Dilutive Securities and Earnings per Share 16-1Breaking the Options Habit 16-2Dilutive Securities 16-3Debt and Equity 16-3Convertible Debt 16-3Convertible Preference Shares 16-8What Do the Numbers Mean? How Low Can You Go? 16-9Share Warrants 16-9Share Warrants Issued with Other Securities 16-10Rights to Purchase Additional Shares 16-11Share Compensation Plans 16-12Measurement--Share Compensation 16-13Recognition--Share Compensation 16-14Restricted Shares 16-16Employee Share-Purchase Plans 16-17Disclosure of Compensation Plans 16-18Debate over Share-Option Accounting 16-18Basic Earnings per Share 16-20Earnings per Share--Simple Capital Structure 16-20Comprehensive Example 16-23Diluted Earnings per Share 16-24Diluted EPS--Convertible Securities 16-25Diluted EPS--Options and Warrants 16-27Contingently Issuable Shares 16-28Antidilution Revisited 16-28EPS Presentation and Disclosure 16-29Summary of EPS Computation 16-30Appendix 16A Accounting for Share-Appreciation Rights 16-31SARS--Share-Based Equity Awards 16-32SARS--Share-Based Liability Awards 16-32Share-Appreciation Rights Example 16-33Appendix 16B Comprehensive Earnings per Share Example 16-34Diluted Earnings Per Share 16-35Global Accounting Insights 16-5917 Investments 17-1Winners and Losers 17-1Debt Investments 17-3Classification and Measurement of Financial Assets 17-3A Closer Look at Debt Investments 17-4What Do the Numbers Mean? What is Fair Value? 17-12Equity Investments 17-13Holdings of Less Than 20% 17-14What Do the Numbers Mean? The Fair Value Challenge 17-18Holdings Between 20% and 50% 17-19Holdings of More Than 50% 17-21What Do the Numbers Mean? Who's in Control Here? 17-21 Summary of Reporting Treatment of Investments 17-21Other Reporting Issues 17-22Impairment of Value 17-22What Do the Numbers Mean? Will We Be Ready the Next Time Around? 17-23Recycling Adjustments 17-27Transfers Between Categories 17-30Evolving Issue Fair Value Controversy 17-31Appendix 17A Accounting for Derivative Instruments 17-32Defining Derivatives 17-32Who Uses Derivatives, and Why? 17-33Producers and Consumers 17-33Speculators and Arbitrageurs 17-33Basic Principles in Accounting for Derivatives 17-34Derivative Financial Instrument (Speculation) 17-35Differences between Traditional and Derivative Financial Instruments 17-37Derivatives Used for Hedging 17-37What Do the Numbers Mean? Risky Business 17-38Fair Value Hedge 17-38Cash Flow Hedge 17-40Other Reporting Issues 17-42Embedded Derivatives 17-42Qualifying Hedge Criteria 17-43Summary of Derivatives Accounting 17-44Comprehensive Hedge Accounting Example 17-45Fair Value Hedge 17-45Financial Statement Presentation of an Interest Rate Swap 17-47Controversy and Concluding Remarks 17-48Appendix 17B Fair Value Disclosures 17-48Disclosure of Fair Value Information: Financial Instruments 17-49Disclosure of Fair Values: Impaired Assets or Liabilities 17-51Conclusion 17-52Global Accounting Insights 17-7718 Revenue Recognition 18-1It's Back 18-1Fundamentals of Revenue Recognition 18-3Background 18-3Revenue Recognition Standard 18-4Overview of the Five-Step Process--Airbus Example 18-4Extended Example of the Five-Step Process: BEAN 18-5The Five-Step Process Revisited 18-9Identifying the Contract with Customers--Step 1 18-9Identifying Separate Performance Obligations--Step 2 18-10Determining the Transaction Price--Step 3 18-11Allocating the Transaction Price to Separate Performance Obligations--Step 4 18-15Recognizing Revenue When (or as) Each Performance Obligation is Satisfied--Step 5 18-17Summary 18-18Accounting for Revenue Recognition Issues 18-19Sales Returns and Allowances 18-19What Do the Numbers Mean? Boomerang Sales! 18-22Repurchase Agreements 18-23Bill-and-Hold Arrangements 18-24Principal-Agent Relationships 18-24Consignments 18-25Warranties 18-26Non-refundable Upfront Fees 18-28Summary 18-29Presentation and Disclosure 18-29Presentation 18-29Disclosure 18-33Evolving Issue Converged, Converging or Diverging? 18-34Appendix 18A Long-Term Construction Contracts 18-34Revenue Recognition over Time 18-34Percentage-of-Completion Method 18-35Cost-Recovery (Zero-Profit) Method 18-40Long-Term Contract Losses 18-42Appendix 18B Revenue Recognition for Franchises 18-44Franchise Accounting 18-45Recognition of Franchise Rights Revenue over Time 18-4719 Accounting for Income Taxes 19-1Safe (Tax) Haven? 19-1Fundamentals of Accounting for Income Taxes 19-3Future Taxable Amounts and Deferred Taxes 19-5What Do the Numbers Mean? "Real Liabilities" 19-8Future Deductible Amounts and Deferred Taxes 19-8What Do the Numbers Mean? "Real Assets" 19-11Deferred Tax Asset (Non-Recognition) 19-11Additional Issues 19-12Income Statement Presentation 19-12Specific Differences 19-13Tax Rate Considerations 19-16What Do the Numbers Mean? Global Tax Rates 19-17Accounting for Net Operating Losses 19-18Loss Carryforward 19-18Loss Carryforward Example 19-19Evolving Issue Uncertain Tax Positions 19-22Financial Statement Presentation 19-22Statement of Financial Position 19-22Income Statement 19-23Tax Reconciliation 19-25What Do the Numbers Mean? The Tax Twist 19-26Review of the Asset-Liability Method 19-27Appendix 19A Comprehensive Example of Interperiod Tax Allocation 19-28First Year--2021 19-28Taxable Income and Income Taxes Payable--2021 19-29Computing Deferred Income Taxes--End of 2021 19-29Deferred Tax Expense (Benefit) and the Journal Entry to Record Income Taxes--2021 19-30Financial Statement Presentation--2021 19-31Second Year--2022 19-32Taxable Income and Income Taxes Payable--2022 19-32Computing Deferred Income Taxes--End of 2022 19-33Deferred Tax Expense (Benefit) and the Journal Entry to Record Income Taxes--2022 19-33Financial Statement Presentation--2022 19-34Appendix 19B Accounting for Net Operating Loss Carrybacks 19-34Loss Carryback 19-35Loss Carryback Example 19-35Loss Carryback with Carryforward 19-36Global Accounting Insights 19-5820 Accounting for Pensions and Postretirement Benefits 20-1Pension Peril 20-2Fundamentals of Pension Plan Accounting 20-3Defined Contribution Plan 20-4Defined Benefit Plan 20-4What Do the Numbers Mean? Which Plan is Right for You? 20-5The Role of Actuaries in Pension Accounting 20-6Measures of the Liability 20-6Reporting Changes in the Defined Benefit Obligation (Asset) 20-8Plan Assets and Actual Return 20-10Using a Pension Worksheet 20-112022 Entries and Worksheet 20-12Funded Status 20-13Past Service Cost 20-132023 Entries and Worksheet 20-14Remeasurements 20-15Asset Gains and Losses 20-16Liability Gains and Losses 20-162024 Entries and Worksheet 20-16What Do the Numbers Mean? Roller Coaster 20-19Reporting Pension Plans in Financial Statements 20-19Within the Financial Statements 20-20Within the Notes to the Financial Statements 20-22Other Postretirement Benefits 20-23Concluding Observations 20-24What Do the Numbers Mean? How's Your Volatility? 20-24Global Accounting Insights 20-4521 Accounting for Leases 21-1Times Are A-Changing 21-1The Leasing Environment 21-3A Look at the Lessee 21-3Advantages of Leasing--Lessees 21-4A Look at the Lessor 21-4Advantages of Leasing--Lessors 21-5What Do the Numbers Mean? Residual Value Regret 21-6Lessee Accounting 21-6Measurement of the Lease Liability and Lease Asset 21-7Subsequent Lessee Accounting 21-9Summary of Lessee Accounting 21-17What Do the Numbers Mean? Your Lease is Killing My Income 21-18Lessor Accounting 21-18Economics of Leasing 21-18Classification of Leases by the Lessor 21-19What Do the Numbers Mean? Not So Fast 21-21Accounting Measurement and Presentation 21-21Lessor Accounting for Operating Leases 21-26Special Lease Accounting Problems 21-28Other Lease Adjustments 21-28Presentation, Disclosure, and Analysis 21-30Evolving Issue Bring It On! 21-34Appendix 21A Sale-Leasebacks 21-35Accounting Issues in Sale-Leaseback Transactions 21-36Sale Transaction 21-36Financing Transaction (Failed Sale) 21-37Sale-Leaseback Example 21-37Appendix 21B Comprehensive Example 21-39Lease Terms: Scenario 1 21-39Lease Classification 21-40Lessee/Lessor Accounting 21-40Lease Terms: Scenario 2 21-42Lease Classification 21-42Lessee Accounting 21-43Lessor Accounting--Operating Lease 21-44Global Accounting Insights 21-6922 Accounting Changes and Error Analysis 22-1Needed: Valid Comparisons 22-2Accounting Changes 22-3Background 22-3Changes in Accounting Policy 22-3What Do the Numbers Mean? Comparison Challenges--Squared 22-5Impracticability 22-14Changes in Accounting Estimates 22-14Prospective Reporting 22-15What Do the Numbers Mean? A Change for the Better? 22-16Disclosures 22-17Accounting Errors 22-17Example of Error Correction 22-18What Do the Numbers Mean? Guard the Financial Statements! 22-20Summary of Accounting Changes and Correction of Errors 22-21What Do the Numbers Mean? What's Your Motivation? 22-22Error Analysis 22-23Statement of Financial Position Errors 22-23Income Statement Errors 22-23Statement of Financial Position and Income Statement Errors 22-24Comprehensive Example: Numerous Errors 22-27Preparation of Financial Statements with Error Corrections 22-30Global Accounting Insights 22-5423 Statement of Cash Flows 23-1Show Me the Money! 23-1The Statement of Cash Flows 23-2Usefulness of the Statement of Cash Flows 23-3Classification of Cash Flows 23-3What Do the Numbers Mean? How's My Cash Flow? 23-5Cash and Cash Equivalents 23-5Format of the Statement of Cash Flows 23-6Preparing the Statement of Cash Flows 23-6Illustrations--Tax Consultants Inc. 23-7Sources of Information for the Statement of Cash Flows 23-16Net Cash Flow from Operating Activities--Direct Method 23-16Evolving Issue Direct versus Indirect 23-21Special Problems in Statement Preparation 23-22Adjustments to Net Income 23-22Accounts Receivable (Net) 23-25Other Working Capital Changes 23-27Net Losses 23-27Disclosures 23-28What Do the Numbers Mean? Better than ROA? 23-29Use of a Worksheet 23-30Preparation of the Worksheet 23-31Analysis of Transactions 23-31Preparation of Final Statement 23-38Global Accounting Insights 23-6524 Presentation and Disclosure in Financial Reporting 24-1We Need Better, Not More 24-1Full Disclosure Principle 24-3Increase in Reporting Requirements 24-4Differential Disclosure 24-5Notes to the Financial Statements 24-5What Do the Numbers Mean? Footnote Secrets 24-8Disclosure Issues 24-8Disclosure of Special Transactions or Events 24-8Events after the Reporting Period (Subsequent Events) 24-10Reporting for Diversified (Conglomerate) Companies 24-12Interim Reports 24-17Evolving Issue It's Faster But is It Better? 24-20Auditor's and Management's Reports 24-21Auditor's Report 24-21What Do the Numbers Mean? Heart of the Matter 24-26Management's Reports 24-26Current Reporting Issues 24-31Reporting on Financial Forecasts and Projections 24-31What Do the Numbers Mean? Global Forecasts 24-32Internet Financial Reporting 24-33Fraudulent Financial Reporting 24-33Criteria for Making Accounting and Reporting Choices 24-35Evolving Issue Disclosure Overload? 24-36Appendix 24A Basic Financial Statement Analysis 24-36Perspective on Financial Statement Analysis 24-37Ratio Analysis 24-37Limitations of Ratio Analysis 24-39Comparative Analysis 24-40Percentage (Common-Size) Analysis 24-41Appendix 24B First-Time Adoption of IFRS 24-42General Guidelines 24-42Relevant Dates 24-43Implementation Steps 24-43Opening IFRS Statement of Financial Position 24-43Exemptions from Retrospective Treatment 24-45Presentation and Disclosure 24-46Summary 24-47Global Accounting Insights 24-69Appendix A Specimen Financial Statements: Marks and Spencer Group plc A-1Appendix B Specimen Financial Statements: adidas AG B-1Appendix C Specimen Financial Statements: Puma Group C-1Company Index I-1Subject Index I-3