Financial Accounting

Front Cover
Half Title Page
Title Page
Copyright Page
Contents
Preface
Publisher’s acknowledgements
Part 1 THE CONTEXT OF ACCOUNTING
	1 Introduction
		Objectives
		1.1 Purposes and users of accounting
		1.2 Entities
		1.3 Accounting regulation and the accountancy profession
		1.4 Language
		1.5 Excitement in accounting
		1.6 The path ahead
		Summary
		Multiple-choice questions
		Exercises
	2 Some fundamentals
		Objectives
		2.1 Introduction
		2.2 The balance sheet
		2.3 The income statement
		2.4 Two simple equations
		2.5 How cash flows fit in
		Summary
		Multiple-choice questions
		Exercises
	3 Frameworks and concepts
		Objectives
		3.1 Introduction
		3.2 The IASB's list of qualitative characteristics
		3.3 The reporting entity
		3.4 A hierarchy of concepts and some inconsistencies
		Summary
		References and research
		Multiple-choice questions
		Exercises
	4 The regulation of accounting
		Objectives
		4.1 Introduction: various ways to regulate accounting
		4.2 Legal systems
		4.3 Examples of regulation
		4.4 The regulation of International Standards
		4.5 SMEs and partnerships
		Summary
		References and research
		Multiple-choice questions
		Exercises
	5 International differences and harmonisation
		Objectives
		5.1 Introduction: the international nature of the development of accounting
		5.2 Classification
		5.3 Influences on differences
		5.4 Harmonisation of financial reporting
		5.5 The International Accounting Standards Board
		Summary
		References and research
		Multiple-choice questions
		Exercises
	6 Company reporting
		Objectives
		6.1 Introduction
		6.2 Balance sheets (statements of financial position)
		6.3 Comprehensive income
		6.4 Statements of changes in equity
		6.5 Cash flow statements
		6.6 Notes to the financial statements
		6.7 Other general disclosure requirements
		6.8 Wider disclosure considerations: corporate social reporting, corporate governance and ethics
		Summary
		References and research
		Multiple-choice questions
		Exercises
	7 Financial statement analysis
		Objectives
		7.1 Introduction
		7.2 Ratios and percentages
		7.3 Profit ratios
		7.4 Profitability ratios
		7.5 Liquidity ratios
		7.6 Interest cover
		7.7 Funds management ratios
		7.8 Introduction to investment ratios
		7.9 Some general issues about ratios
		Summary
		Multiple-choice questions
		Exercises
Part 2 FINANCIAL REPORTING ISSUES
	8 Recognition and measurement of the elements of financial statements
		Objectives
		8.1 Introduction
		8.2 Primacy of definitions
		8.3 Hierarchy of decisions about assets and liabilities
		8.4 Income (including revenue) and expenses
		Summary
		References and research
		Multiple-choice questions
		Exercises
	9 Tangible and intangible non-current assets
		Objectives
		9.1 Preamble: a tale of two companies
		9.2 Introduction
		9.3 The recognition of assets
		9.4 Should leased assets be recognised?
		9.5 Depreciation of cost
		9.6 Impairment
		9.7 Measurement based on fair value
		9.8 Investment properties
		9.9 A mix of values
		Summary
		References and research
		Multiple-choice questions
		Exercises
	10 Inventories
		Objectives
		10.1 Introduction
		10.2 Counting inventory
		10.3 Valuation of inventory at historical cost
		10.4 Inventory flow
		10.5 Other cost methods
		10.6 Valuation of inventory using exit values
		10.7 Practice
		Summary
		References and research
		Multiple-choice questions
		Exercises
	11 Financial assets, liabilities and equity
		Objectives
		11.1 Introduction
		11.2 Cash and receivables
		11.3 Investments
		11.4 Liabilities
		11.5 Equity
		11.6 Reserves and provisions
		11.7 Comparisons of debt and equity
		Summary
		References and research
		Multiple-choice questions
		Exercises
	12 Accounting and taxation
		Objectives
		12.1 Introduction
		12.2 International differences in the determination of taxable income
		12.3 Tax rates and tax expense
		12.4 Deferred tax
		Summary
		References and research
		Multiple-choice questions
		Exercises
	13 Cash flow statements
		Objectives
		13.1 Introduction
		13.2 An outline of the IAS 7 approach
		13.3 Reporting cash flows from operating activities
		13.4 The preparation of cash flow statements
		13.5 A real example
		Summary
		References and research
		Multiple-choice questions
		Exercises
	14 Group accounting
		Objectives
		14.1 Introduction: the group
		14.2 Investments related to the group
		14.3 Accounting for the group
		14.4 Uniting/pooling of interests
		14.5 The equity method
		14.6 Conclusion on group relationships
		Summary
		References and research
		Multiple-choice questions
		Exercises
	15 Foreign currency translation
		Objectives
		15.1 Introduction
		15.2 Transactions
		15.3 Translation of financial statements
		15.4 A numerical illustration
		Summary
		References and research
		Multiple-choice questions
		Exercises
Part 3 ANALYSIS
	16 Financial appraisal
		Objectives
		16.1 Introduction
		16.2 More on investment ratios
		16.3 Interpreting the balance sheet
		16.4 Valuation through expectations
		16.5 Valuation through market values
		16.6 Accounting policies and financial appraisal
		16.7 Creative accounting
		Summary
		References and research
		Multiple-choice questions
		Exercises
	17 International analysis
		Objectives
		17.1 Introduction
		17.2 Language
		17.3 Differences in financial culture
		17.4 Accounting differences
		17.5 Help by multinationals
		17.6 Increasing international harmonisation
		17.7 Get out there and do it
		Summary
		References and research
		Exercises
Appendices
	A Double-entry bookkeeping
	B An outline of the content of International Financial Reporting Standards
	C An outline of the content of the EU's Directive on accounting law
	D Answers to multiple-choice questions
	E Feedback on exercises
Glossary of terms
Index
Back Cover