Intermediate accounting

Cover......Page 1
About the Authors......Page 6
Brief Contents......Page 8
Contents......Page 10
Preface......Page 27
 Introduction......Page 40
  Financial Information......Page 41
  Economic Entity......Page 42
  Financial Statement User Groups......Page 43
  Legal, Economic, Political, and Social Environment......Page 45
  The Importance of Understanding International Accounting Standards......Page 47
  Standard Setting......Page 48
  History of Global Standard Setting: IFRS......Page 51
  Interview: Daniel J. Noll, AICPA......Page 52
 The Global Standard-Setting Structure: IFRS......Page 53
 Trends in Standard Setting......Page 54
  Rules versus Principles-Based Standards......Page 55
  Fair Value Measurements......Page 56
 Summary by Learning Objectives......Page 57
 Questions......Page 58
  Brief Exercises......Page 59
  Exercises......Page 60
 Introduction......Page 62
  Conceptual Framework Components......Page 63
  Interview: Paul Pacter, Former Member of IASB......Page 65
  Fundamental Characteristics......Page 66
  Enhancing Characteristics......Page 68
 Elements of Financial Reporting......Page 69
  Elements......Page 71
 Elements: IFRS......Page 73
  General Recognition Principles......Page 75
  Revenue and Expense Recognition......Page 76
  Bases of Measurement......Page 77
  Recognition and Measurement: IFRS......Page 79
  Cash versus Accrual Accounting......Page 80
 Assumptions in Financial Reporting......Page 81
  Assumptions in Financial Reporting: IFRS......Page 82
 Summary by Learning Objectives......Page 83
  Brief Exercises......Page 86
  Exercises......Page 90
 Introduction......Page 94
  Judgment and Financial Statement Comparisons......Page 95
  Judgment-Related Disclosures......Page 96
  Key Judgment Areas in Practice......Page 100
  Factors Influencing Management Behavior......Page 101
  Cognitive Biases......Page 102
  Authoritative Literature......Page 103
  Authoritative Literature: IFRS......Page 106
  Interview: Robert Herz, Chairman, FASB (Retired)......Page 107
  Step 2: Identify the Issue: What is the Research Question?......Page 108
  Step 6: Communicate the Results of the Research......Page 109
  Applying the Research Process......Page 110
 Summary by Learning Objectives......Page 114
  Brief Exercises......Page 117
  Exercises......Page 119
  Judgment Cases......Page 120
  Basis for Conclusions Cases......Page 122
 Appendix A: Structure of U.S. GAAP Codification......Page 124
 Appendix B: IFRS Standards......Page 127
 Introduction......Page 130
  The Accounting Equation......Page 131
 Step 2: Journalize the Transactions......Page 136
  Accounts......Page 137
  Journal Entries......Page 138
 Step 3: Post to the General Ledger......Page 140
  The T-Account......Page 143
 Step 4: Prepare the Unadjusted Trial Balance......Page 144
  Deferrals......Page 145
  Accruals......Page 149
 Step 6: Prepare the Adjusted Trial Balance......Page 152
 Step 7: Prepare Financial Statements......Page 154
 Step 8: Close Temporary Accounts......Page 156
 Step 9: Prepare Post-Closing Trial Balance......Page 157
  Comprehensive Example......Page 158
  Interview: John Foristall, ShoeBuy......Page 174
 Summary by Learning Objectives......Page 175
  Multiple-Choice Questions Becker Professional Education......Page 179
  Brief Exercises......Page 181
  Exercises......Page 183
  Problems......Page 189
 Appendix A: Alternative Treatment of Deferred Revenues and Expenses......Page 198
 Appendix B: Using a Worksheet......Page 200
 Appendix C: Reversing Entries......Page 207
 Introduction......Page 210
  Income Statement Terminology......Page 211
  THE CONCEPTUAL FRAMEWORK CONNECTION: Usefulness and Limitations of the Income Statements......Page 212
  JUDGMENTS IN ACCOUNTING: Earnings Management......Page 213
  Statement of Net Income Elements......Page 215
  Statement of Net Income Classifications......Page 216
  Multiple-Step Net Income Statement......Page 217
  Condensed Statement of Net Income......Page 218
  Single-Step Statement of Net Income......Page 220
 Statement of Net Income Presentation: IFRS......Page 222
 Income from Continuing Operations......Page 223
  Non-Operating Income......Page 225
  Characteristics of a Discontinued Operation......Page 226
  Discontinued Operations Reporting Requirements......Page 227
 Discontinued Operations: IFRS......Page 231
 Net Income, Noncontrolling Interest and Earnings per Share......Page 232
  Statement of Comprehensive Income Elements......Page 233
  Statement of Comprehensive Income Format......Page 234
  Statement of Stockholders’ Equity Accounts......Page 237
  Interview: Greg Tierney, MillerCoors......Page 238
 Summary by Learning Objectives......Page 242
 Questions......Page 246
  Multiple-Choice Questions Becker Professional Education......Page 247
  Brief Exercises......Page 248
  Exercises......Page 253
  Problems......Page 259
  Judgment Cases......Page 263
  Financial Statement Analysis Cases......Page 264
  Surfing the Standards Cases......Page 265
  Basis for Conclusions Cases......Page 266
 Appendix A: Financial Statement Analysis......Page 267
 Appendix B: Profitability Analysis......Page 270
 Introduction......Page 274
  THE CONCEPTUAL FRAMEWORK CONNECTION: Usefulness and Limitations of the Balance Sheet......Page 275
 Balance Sheet Classifications......Page 276
  Assets......Page 277
  Liabilities......Page 278
  Stockholders’ Equity......Page 279
  Asset Presentation......Page 280
  Balance Sheet Format......Page 281
 The Statement of Cash Flows......Page 283
  Statement of Cash Flows Classifications......Page 285
  Classification of Dividends, Interest, and Taxes: IFRS......Page 287
 Format for Cash Flows from Operating Activities......Page 288
 Financial Statement Articulation......Page 291
 Notes to the Financial Statements......Page 294
  THE CONCEPTUAL FRAMEWORK CONNECTION: Notes to the Financial Statements......Page 295
  Interview: Michael Cohen, CohnReznick......Page 300
  Management Discussion and Analysis......Page 301
  Auditors’ Report......Page 302
  Management Report......Page 303
 Summary by Learning Objectives......Page 304
 Questions......Page 309
  Multiple-Choice Questions Becker Professional Education......Page 310
  Brief Exercises......Page 311
  Exercises......Page 319
  Problems......Page 325
  Judgment Cases......Page 332
  Financial Statement Analysis Case......Page 333
  Surfing the Standards Cases......Page 334
  Basis for Conclusions Cases......Page 336
  Reporting Cash Flows from Operating Activities: Indirect Method......Page 338
  Reporting Cash Flows from Operating Activities: Direct Method......Page 341
  Reporting Cash Flows from Investing and Financing Activities......Page 345
  Liquidity......Page 347
  Solvency......Page 348
  DuPont Analysis......Page 350
 Introduction......Page 354
  Time Value of Money in Accounting......Page 355
  Compound Interest......Page 356
  Effective Interest Rates......Page 357
 Single-Sum Problems......Page 358
  Future Value of a Single Sum......Page 359
  Present Value of a Single Sum......Page 362
  Other Single-Sum Problems......Page 366
 Annuities......Page 370
  Future Value of Ordinary Annuities......Page 371
  Future Value of an Annuity Due......Page 374
  Present Value of Ordinary Annuities......Page 378
  Present Value of an Annuity Due......Page 381
  Other Annuity Problems......Page 385
  Future Value of a Deferred Ordinary Annuity......Page 390
  Present Value of a Deferred Ordinary Annuity......Page 391
  THE CONCEPTUAL FRAMEWORK CONNECTION: Present Value of Expected Cash Flows......Page 392
  Interview: Peter Biché, Monumental Sports & Entertainment......Page 393
  Computing Bond Issue Proceeds......Page 394
 Summary by Learning Objectives......Page 396
  Brief Exercises......Page 398
  Exercises......Page 399
  Problems......Page 402
 Appendix A: Time Value of Money Factor Tables......Page 405
 Introduction......Page 412
 Revenue Recognition Overview......Page 413
  THE CONCEPTUAL FRAMEWORK CONNECTION: Revenue Recognition......Page 414
  Contract Criteria......Page 415
  Failure to Meet Contract Criteria......Page 416
  Identify the Contract(s) with a Customer: IFRS......Page 417
 Step 2: Identify the Performance Obligations in the Contract......Page 418
  Variable Consideration and Constraining Estimates of Variable Consideration......Page 420
  Significant Financing Component......Page 423
  Noncash Consideration......Page 424
  Consideration Payable to a Customer......Page 425
  Standalone Selling Price......Page 426
  Standalone Selling Price Estimation Methods......Page 427
  Standalone Selling Price Exceptions......Page 428
  Transfer over Time......Page 432
  Summary of the Five-Step Revenue Recognition Process......Page 434
  JUDGMENTS IN ACCOUNTING: Revenue Recognition......Page 436
 Accounting for Long-Term Contracts......Page 440
  Percentage-of-Completion Method......Page 441
  Completed-Contract Method......Page 446
  Right-to-Return Sales......Page 449
  Consignment Sales......Page 450
  Other Principal-Agent Transactions......Page 452
  Bill-and-Hold Arrangements......Page 453
  Contracts with Customers......Page 454
  Interview: Michael Hall, KPMG......Page 456
  FINANCIAL STATEMENT ANALYSIS: Comparison of the Percentage-of-Completion and Completed-Contract Methods......Page 457
 Summary by Learning Objectives......Page 460
 Questions......Page 465
  Multiple-Choice Questions Becker Professional Education......Page 466
  Brief Exercises......Page 468
  Exercises......Page 471
  Problems......Page 475
  Financial Statement Analysis Case......Page 480
  Basis for Conclusions Case......Page 481
 Introduction......Page 482
  Restricted Cash and Compensating Balances......Page 483
  Required Disclosures for Restricted Cash and Cash Equivalents......Page 484
  Trade Discounts and Volume Discounts......Page 485
  Sales Discounts......Page 486
  THE CONCEPTUAL FRAMEWORK CONNECTION: Accounting for Uncollectible Accounts......Page 489
  The Allowance Method......Page 490
  Aging of Accounts Receivable......Page 491
  Uncollectible Account Write-Off......Page 494
  Subsequent Recoveries......Page 495
  JUDGMENTS IN ACCOUNTING: Subsequent Measurements of Accounts Receivable......Page 496
 Financing with Accounts Receivable......Page 497
  Pledging and Assigning Accounts Receivable......Page 498
  Factoring Accounts Receivable......Page 499
  Securitizations......Page 502
  Stated Interest Rate Equal to the Market Rate......Page 503
  No Stated Interest Rate or Stated Interest Rate Less Than the Market Rate......Page 504
 Disclosures for Accounts Receivable and Notes Receivable......Page 507
  FINANCIAL STATEMENT ANALYSIS: Operating Cycle Analysis......Page 508
  Interview: Dalton Smart, Merck & Co.......Page 513
 Summary by Learning Objectives......Page 514
  Multiple-Choice Questions Becker Professional Education......Page 517
  Brief Exercises......Page 518
  Exercises......Page 522
  Problems......Page 529
  Judgment Cases......Page 534
  Surfing the Standards Cases......Page 537
  Basis for Conclusions Case......Page 538
 Appendix A: Internal Controls over Cash......Page 539
  Format for the Bank Reconciliation......Page 540
 Introduction......Page 546
  Types of Inventory......Page 547
  Inventory Systems......Page 548
 Inventory Costing: Units and Costs Included......Page 551
  Costs Included in Inventory......Page 552
  Purchase Discounts......Page 553
 Inventory Cost-Flow Assumptions......Page 555
  Specific Identification Method......Page 557
  Moving-Average Method......Page 558
  First-In, First-Out Method......Page 560
  Last-In, First-Out Method......Page 562
  Comparison of the Moving-Average, FIFO, and LIFO Methods......Page 563
  The LIFO Reserve and LIFO Effect......Page 565
  LIFO Liquidations......Page 567
  Dollar-Value LIFO......Page 569
  JUDGMENTS IN ACCOUNTING: The LIFO Effect......Page 573
 The Lower-of-Cost-or-Market Rule......Page 574
  Lower-of-Cost-or-Market Rule Method......Page 575
  Lower-of-Cost-or-Market Rule: IFRS......Page 581
  JUDGMENTS IN ACCOUNTING: The Lower-of-Cost-or-Market Rule......Page 582
  Interview: Barbara J. Wight, Taylor Guitars......Page 583
  Basic Retail Method......Page 584
  Retail Method Terminology......Page 585
  The Conventional Retail Inventory Method......Page 586
 Gross Profit Method of Estimating Inventory......Page 588
 Inventory Disclosures......Page 589
  FINANCIAL STATEMENT ANALYSIS: Conversion from LIFO to FIFO......Page 590
 Summary by Learning Objectives......Page 593
  Multiple-Choice Questions Becker Professional Education......Page 597
  Brief Exercises......Page 599
  Exercises......Page 603
  Problems......Page 609
  Judgment Cases......Page 614
  Financial Statement Analysis Cases......Page 616
  Surfing the Standards Cases......Page 618
  Basis for Conclusions Cases......Page 620
  Basic LIFO Retail Inventory Method......Page 622
  Dollar-Value LIFO Retail Inventory Method......Page 623
 Introduction......Page 626
  THE CONCEPTUAL FRAMEWORK CONNECTION: Property, Plant, and Equipment Measurement......Page 627
  PPE Categories......Page 628
  Initial Measurement of Basket Purchases......Page 629
  Initial Measurement with Deferred Payment Arrangements......Page 631
  Interest Capitalization......Page 632
  JUDGMENTS IN ACCOUNTING: The Initial Measurement of Property, Plant, and Equipment......Page 642
  Subsequent Expenditures......Page 643
  THE CONCEPTUAL FRAMEWORK CONNECTION: The Cost Allocation Process......Page 644
  Asset Derecognition: Sale......Page 652
 Disclosures of Property, Plant, and Equipment......Page 653
  IFRS Disclosures......Page 654
  Finite-Life Intangible Assets......Page 655
 Initial Measurement of Intangible Assets......Page 656
  Goodwill......Page 657
  Research and Development Costs......Page 659
  Amortization Method......Page 663
  Derecognition of Intangible Assets......Page 664
  Interview: Stephen J. Cosgrove, Johnson & Johnson......Page 665
 Disclosures of Intangible Assets......Page 666
  IFRS Intangible Asset Disclosure......Page 667
  FINANCIAL STATEMENT ANALYSIS: Long-Term Fixed Assets......Page 668
 Summary by Learning Objectives......Page 670
 Questions......Page 674
  Multiple-Choice Questions Becker Professional Education......Page 675
  Brief Exercises......Page 676
  Exercises......Page 678
  Problems......Page 686
  Financial Statement Analysis Case......Page 690
  Surfing the Standards Cases......Page 692
  Basis for Conclusions Cases......Page 693
  Exchanges with Commercial Substance......Page 694
  Exchanges without Commercial Substance and Cash Received......Page 696
  IFRS Accounting for Nonmonetary Exchanges......Page 698
  Costs Included in Natural Resources......Page 699
  Depletion......Page 700
  IFRS Costs Included in Natural Resources......Page 703
 Introduction......Page 704
  Categories and Steps Associated with the Impairment of Long-Term Operating Assets......Page 705
  When to Test for Impairment......Page 706
  Two-Step Impairment Test......Page 708
  Measurement Subsequent to Impairment......Page 711
  One-Step Impairment Test......Page 712
  Measurement Subsequent to Impairment......Page 713
  Asset Grouping......Page 714
  One-Step Impairment Test......Page 715
  JUDGMENTS IN ACCOUNTING: For Impaired Long-Term Operating Assets......Page 717
  Impairment Test......Page 719
  Impairment Test......Page 727
  Impaired Asset Disclosure Requirements......Page 731
  Impaired Asset Disclosure Requirements: IFRS......Page 734
  Recording Long-Term Operating Assets Held for Sale or Disposal......Page 735
  Interview: Jack Markey, Quest Diagnostics......Page 738
  FINANCIAL STATEMENT ANALYSIS: Long-Term Operating Assets with Departures from Historical Cost......Page 739
 Summary by Learning Objectives......Page 741
  Multiple-Choice Questions Becker Professional Education......Page 744
  Brief Exercises......Page 745
  Exercises......Page 748
  Problems......Page 752
  Judgment Cases......Page 756
  Financial Statement Analysis Case......Page 759
  Surfing the Standards Cases......Page 761
  Basis for Conclusions Cases......Page 763
  The Revaluation Model......Page 764
  Derecognition after a Revaluation......Page 771
  JUDGMENTS IN ACCOUNTING: Revaluation under IFRS......Page 772
  Required Disclosures for Revaluation of Long-Term Operating Assets......Page 773
 Introduction......Page 774
  Accounts Payable and Trade Notes Payable......Page 775
  Unearned Revenues......Page 776
  Gift Cards......Page 777
  Deposits......Page 780
  Compensated Absences......Page 781
  Footnote Disclosures: Operating Liabilities......Page 784
  Accounting for Asset Retirement Obligations......Page 785
  Footnote Disclosures: Asset Retirement Obligations......Page 786
  Asset Retirement Obligations: IFRS......Page 787
  Loss Contingency......Page 788
  Recognition and Measurement of Loss Contingencies......Page 789
  Accounting for Loss Contingencies......Page 790
  Accounting for Litigation......Page 791
  Accounting for Litigation: IFRS......Page 792
  Accounting for Warranty Costs......Page 793
  Accounting for Premiums......Page 796
  JUDGMENTS IN ACCOUNTING: For Contingencies......Page 799
  Interview: Cathy Engelbert, Deloitte & Touche LLP......Page 800
  Required Disclosures for Contingencies: IFRS......Page 801
  FINANCIAL STATEMENT ANALYSIS: More on Liquidity......Page 802
 Summary by Learning Objectives......Page 804
 Questions......Page 807
  Multiple-Choice Questions Becker Professional Education......Page 808
  Brief Exercises......Page 809
  Exercises......Page 811
  Problems......Page 813
  Judgment Cases......Page 816
  Financial Statement Analysis Case......Page 817
  Surfing the Standards Cases......Page 818
  Basis for Conclusions Cases......Page 819
  Unemployment Taxes......Page 821
  Income Taxes Withheld......Page 822
 Introduction......Page 826
  Short-Term Notes Payable......Page 827
  Long-Term Notes Payable: Term Loans......Page 828
  Long-Term Notes Payable: Installment Loans......Page 829
  Long-Term Notes Payable: Stated Rate Less than Market Rate......Page 832
  Credit Ratings......Page 834
  Bond Indenture......Page 835
  Bond Pricing......Page 836
  Bonds Issued at Par......Page 839
  Overview of Bonds Payable Issued at a Discount or Premium......Page 840
  Accounting for Bonds Payable Issued at a Premium......Page 841
  Accounting for Bonds Payable Issued at a Discount......Page 843
 Bonds Issued between Interest Dates......Page 848
 Bond Issue Costs......Page 851
 Early Retirement of Bonds Payable......Page 852
 Convertible Bonds......Page 853
  Accounting for Convertible Bonds......Page 854
  Beneficial Conversion Options......Page 855
  Accounting for Convertible Bonds: IFRS......Page 857
  JUDGMENTS IN ACCOUNTING: Convertible Bonds......Page 858
  Accounting for Stock Warrants......Page 859
  Accounting for Stock Warrant: IFRS......Page 861
  Short-Term Debt Expected to Be Refinanced......Page 862
  Obligations Callable by Creditor......Page 865
  Fair Value Option Accounting at Initial Recognition......Page 866
 Disclosures for Financing Liabilities......Page 867
  Fair Value Disclosures......Page 868
  FINANCIAL STATEMENT ANALYSIS: Credit Risk......Page 869
  Interview: Carolyn Slaski, Ernst & Young LLP......Page 872
 Summary by Learning Objectives......Page 873
  Multiple-Choice Questions Becker Professional Education......Page 877
  Brief Exercises......Page 879
  Exercises......Page 883
  Problems......Page 886
  Judgment Cases......Page 890
  Surfing the Standards Cases......Page 891
  Basis for Conclusions Cases......Page 892
 Appendix A: The Straight-Line Method of Amortization......Page 893
  Straight-Line Amortization: IFRS......Page 896
 Introduction......Page 898
  Components of Stockholders’ Equity......Page 899
  Overview of Common Stock......Page 900
  Accounting for Common Stock Issuances......Page 901
  Stock Splits......Page 904
  Purpose of Share Repurchases......Page 905
  Accounting for Treasury Stock Transactions......Page 906
  Accounting for Share Retirements......Page 909
  Overview of Preferred Stock......Page 911
  Features of Preferred Shares......Page 913
  Types of Dividends......Page 918
  Accounting for Cash Dividends......Page 919
  Accounting for Stock Dividends......Page 920
  JUDGMENTS IN ACCOUNTING: Stock Dividends......Page 923
  Prior-Period Adjustments......Page 924
  Components of Comprehensive Income......Page 925
  Reporting Other Comprehensive Income......Page 926
 Stockholders’ Equity Disclosures......Page 927
  Rights and Privileges of Classes of Stock......Page 928
  Interview: Robert Laux, International Integrated Reporting Council......Page 929
  Disclosures: IFRS......Page 930
  FINANCIAL STATEMENT ANALYSIS: Valuation Ratios......Page 931
 Summary by Learning Objectives......Page 934
 Questions......Page 936
  Multiple Choice Questions Becker Professional Education......Page 937
  Brief Exercises......Page 938
  Exercises......Page 939
  Problems......Page 944
  Judgment Cases......Page 948
  Financial Statement Analysis Case......Page 951
  Basis for Conclusions Cases......Page 952
 Introduction......Page 954
  Investments in Equity Securities......Page 955
  Key Questions for Investments in Debt and Equity Securities......Page 956
  Held-to-Maturity Debt Securities......Page 957
  Trading Debt Securities......Page 961
  Available-for-Sale Debt Securities......Page 963
  Presentation of Other Comprehensive Income: Reclassification Adjustments for Available-for-Sale Debt Investments......Page 968
  Transfers between Classifications......Page 970
  Accounting for Debt Investments under IFRS......Page 971
 Investments in Equity Securities: No Significant Influence......Page 972
  Equity Investments With No Significant Influence: Readily Determinable Fair Value......Page 973
  Equity Investments With No Significant Influence: No Readily Determinable Fair Values......Page 976
  JUDGMENTS IN ACCOUNTING: Equity Investments with No Significant Influence and No Readily Determinable Fair Values......Page 977
  Accounting for Equity Investments with No Significant Influence under IFRS......Page 978
  The Equity Method......Page 979
 Long-Term Notes Receivable......Page 984
  Stated Interest Rate Equal to the Market Rate......Page 985
  Stated Interest Rate Less than the Market Rate......Page 987
  IFRS Accounting for Note Receivable......Page 990
 The Fair Value Option for Reporting Investments......Page 991
  Debt Securities......Page 992
  Fair Value Measurement Disclosures......Page 994
  Fair Value Disclosures......Page 995
  Interview: Thomas Angell, WithumSmith + Brown......Page 996
  FINANCIAL STATEMENT ANALYSIS: Investments in Debt Securities and Equity Securities with No Significant Influence......Page 997
 Summary by Learning Objectives......Page 999
  Multiple-Choice Questions Becker Professional Education......Page 1002
  Brief Exercises......Page 1004
  Exercises......Page 1006
  Problems......Page 1010
  Financial Statement Analysis Case......Page 1015
  Surfing the Standards Case......Page 1017
  Basis for Conclusions Cases......Page 1018
  Accounting for Impairments of Debt Investment Measured at Amortized Cost......Page 1019
  Accounting for Impairment of Available-for-Sale Debt Investments......Page 1021
  Accounting for Impairments of Equity Securities with No Readily Determinable Fair Value......Page 1023
  Accounting for Impairments under IFRS: Debt Securities Reported at Amortized Cost or Fair Value through Other Comprehensive Income......Page 1025
 Introduction......Page 1030
 No Differences between Book and Tax Reporting......Page 1031
 Permanent Differences between Book and Tax Reporting......Page 1032
  Accounting for Permanent Differences......Page 1033
 Temporary Differences between Book and Tax Reporting......Page 1034
  Deferred Tax Assets and Liabilities......Page 1036
  Temporary Difference Reversal......Page 1040
  THE CONCEPTUAL FRAMEWORK CONNECTION: Temporary Differences......Page 1044
  Treatment of Deferred Tax Assets......Page 1045
 Treatment of Deferred Tax Assets: IFRS......Page 1048
  JUDGMENTS IN ACCOUNTING: Temporary Book-Tax Differences......Page 1050
  Accounting for Changes in Tax Rates......Page 1051
  Effect of Tax Rate Changes on Deferred Tax Accounts......Page 1052
  Accounting for Tax Rate Changes: IFRS......Page 1053
  Carrybacks and Carryforwards under U.S.Tax Law......Page 1054
  Accounting for an NOL Carryback......Page 1055
  Accounting for an NOL Carryforward......Page 1056
  Assessing NOL Carryforward Realizability......Page 1060
 Uncertain Tax Positions......Page 1061
  Accounting for Uncertain Tax Positions......Page 1062
  JUDGMENTS IN ACCOUNTING: Uncertain Tax Positions......Page 1064
  Income Statement Presentation......Page 1066
  Tax Rate Reconciliation......Page 1068
  Income Statement Disclosures: IFRS......Page 1069
  Interview: Laurie Wax, RSM US LLP......Page 1070
  FINANCIAL STATEMENT ANALYSIS: Accounting for Income Taxes......Page 1071
 Summary by Learning Objectives......Page 1073
  Multiple-Choice Questions Becker Professional Education......Page 1076
  Brief Exercises......Page 1079
  Exercises......Page 1081
  Problems......Page 1087
  Financial Statement Analysis Case......Page 1093
  Surfing the Standards Cases......Page 1095
  Basis for Conclusions Cases......Page 1096
 Appendix A: Comprehensive Book-Tax Difference Problem......Page 1098
 Introduction......Page 1102
  Disadvantages of Leasing for the Lessee......Page 1103
  Understanding the Basics of Lease Accounting......Page 1104
  Separating Components in a Lease Contract......Page 1105
  Allocating Consideration in a Lease Contract......Page 1106
  Criteria for Classification......Page 1107
  Lease Payments and Discount Rates......Page 1110
  IFRS Lease Classification......Page 1112
  THE CONCEPTUAL FRAMEWORK CONNECTION: Lease Classification......Page 1114
  Initial Measurement of an Operating Lease: Lessee......Page 1115
  Subsequent Measurement of an Operating Lease: Lessee......Page 1117
  Operating Lease with Residual Values: Lessee Guaranteed Residual Value......Page 1120
  Short-Term Policy Election: Lessee......Page 1121
  Operating Lease: Lessor Accounting......Page 1122
  Initial and Subsequent Measurement of Finance Leases: Lessee......Page 1124
  Finance Lease with Residual Values: Lessee......Page 1128
  Initial Measurement of a Sales-Type Lease......Page 1130
  Subsequent Measurement of a Sales-Type Lease......Page 1134
  Residual Values in a Sales-Type Lease......Page 1135
  Initial Measurement of a Direct Financing Lease......Page 1137
  Subsequent Measurement of a Direct Financing Lease......Page 1139
  IFRS Accounting for Leases: Lessor......Page 1141
  JUDGMENTS IN ACCOUNTING: For Leases......Page 1142
  Interview: Chad Soares, PricewaterhouseCoopers LLP......Page 1143
  Lessee-Disclosure Requirements......Page 1144
  Lessor-Disclosure Requirements......Page 1145
  FINANCIAL STATEMENT ANALYSIS: Operating Leases versus Finance Leases for the Lessee......Page 1146
 Summary by Learning Objectives......Page 1149
 Questions......Page 1154
  Multiple-Choice Questions Becker Professional Education......Page 1155
  Brief Exercises......Page 1156
  Exercises......Page 1158
  Problems......Page 1163
  Financial Statement Analysis Case......Page 1168
  Surfing the Standards Cases......Page 1169
  Basis for Conclusions Cases......Page 1170
  Accruing Interest on Leases......Page 1172
  Leasehold Improvements......Page 1173
  Executory Costs......Page 1174
  Purchase Options......Page 1177
  Deferred Profit in Direct Financing Leases......Page 1178
  Variable Lease Payments......Page 1181
  Comprehensive Problem: Leasing Complexities......Page 1184
 Introduction......Page 1190
  Stock Option Terminology......Page 1191
  THE CONCEPTUAL FRAMEWORK CONNECTION: Stock-Based Compensation......Page 1192
  Estimates in Accounting for Stock-Based Compensation......Page 1193
  Issuance of Equity-Classified Awards......Page 1194
  Change in the Estimated Forfeiture Rate......Page 1196
  Exercise of Equity-Classified Awards......Page 1197
  Equity-Classified Awards: IFRS......Page 1198
  Issuance of Liability-Classified Awards......Page 1199
  Fair Value Adjustments......Page 1200
  Exercise of Liability-Classified Awards......Page 1201
  Stock Appreciation Rights......Page 1202
  Restricted Stock Plans......Page 1204
  Employee Stock Purchase Plans......Page 1206
 Stock-Based Compensation Disclosures......Page 1207
  THE CONCEPTUAL FRAMEWORK CONNECTION: Stock-Based Compensation......Page 1209
  Types of Pension Plans......Page 1210
  Measures of the Actuarially Determined Defined-Benefit Pension Obligation......Page 1211
  Factor 1: Service Cost......Page 1213
  Factor 2: Prior Service Costs......Page 1214
  Factor 3: Interest on the PBO......Page 1215
  Factor 4: Expected Return on Pension Plan Assets......Page 1216
  Factor 5: Current-Year Net Gains and Losses......Page 1217
  Factor 6: Funding the Plan......Page 1219
  Accounting for Defined-Benefit Pension Plans: IFRS......Page 1220
  JUDGMENTS IN ACCOUNTING: Defined-Benefit Pension Plans......Page 1225
  Defined-Benefit Pension Plan Disclosure Requirements......Page 1226
  FINANCIAL STATEMENT ANALYSIS: Defined-Benefit Pension Plan......Page 1228
  Interview: Peter Sayre, Prudential Insurance......Page 1232
 Summary by Learning Objectives......Page 1233
  Multiple Choice Questions Becker Professional Education......Page 1236
  Brief Exercises......Page 1238
  Exercises......Page 1241
  Problems......Page 1246
  Financial Statement Analysis Cases......Page 1251
  Surfing the Standards Cases......Page 1252
  Basis for Conclusions Cases......Page 1253
 Appendix A: Comprehensive Illustration of Accounting for Defined-Benefit Pension Plans......Page 1254
 Introduction......Page 1260
  Basic EPS Numerator......Page 1261
  Basic EPS Denominator......Page 1262
  JUDGMENTS IN ACCOUNTING: Presentation of EPS......Page 1264
 Diluted Earnings per Share......Page 1265
  Convertible Debt......Page 1266
  Convertible Preferred Stock......Page 1271
  Options and Warrants......Page 1272
  Antidilutive Convertible Securities......Page 1274
  Antidilution Sequencing......Page 1276
  Antidilution with a Net Loss from Continuing Operations......Page 1277
 Earnings per Share Presentation and Disclosures......Page 1278
  Comprehensive Example: EPS Calculation, Antidilution Sequencing, and Disclosures......Page 1280
  FINANCIAL STATEMENT ANALYSIS: EPS......Page 1284
  Interview: Michael H. Dolan, Duff & Phelps, LLC......Page 1287
 Summary by Learning Objectives......Page 1288
  Multiple-Choice Questions Becker Professional Education......Page 1290
  Brief Exercises......Page 1291
  Exercises......Page 1293
  Problems......Page 1295
  Judgment Case......Page 1299
  Financial Statement Analysis