book

Advanced Accounting, 5th Edition

Name: Advanced Accounting, 5th Edition
ISBN: 9781118022290

by Debra C. Jeter, Paul K. Chaney

December 2011

Intermediate to advanced

1072 pages

36h 19m

English

Wiley

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Cover Page
Title Page
Copyright
ABOUT THE AUTHORS
PREFACE
Contents
1 INTRODUCTION TO BUSINESS COMBINATIONS AND THE CONCEPTUAL FRAMEWORK
LEARNING OBJECTIVESPLANNING M&A IN A CHANGING ENVIRONMENT AND UNDER CHANGING ACCOUNTING REQUIREMENTSNATURE OF THE COMBINATIONBUSINESS COMBINATIONS: WHY? WHY NOT?BUSINESS COMBINATIONS: HISTORICAL PERSPECTIVETERMINOLOGY AND TYPES OF COMBINATIONSTAKEOVER PREMIUMSAVOIDING THE PITFALLS BEFORE THE DEALDETERMINING PRICE AND METHOD OF PAYMENT IN BUSINESS COMBINATIONSALTERNATIVE CONCEPTS OF CONSOLIDATED FINANCIAL STATEMENTSFASB'S CONCEPTUAL FRAMEWORKFASB CODIFICATION (SOURCE OF GAAP)SummaryAPPENDIX Evaluating Firm PerformanceQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC (Accounting Standards Codification) Exercises
2 ACCOUNTING FOR BUSINESS COMBINATIONS
LEARNING OBJECTIVESHISTORICAL PERSPECTIVE ON BUSINESS COMBINATIONSPRO FORMA STATEMENTS AND DISCLOSURE REQUIREMENTEXPLANATION AND ILLUSTRATION OF ACQUISITION ACCOUNTINGCONTINGENT CONSIDERATION IN AN ACQUISITIONLEVERAGED BUYOUTSIFRS VERSUS U.S. GAAPSummaryAPPENDIX A Deferred Taxes in Business CombinationsQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
3 CONSOLIDATED FINANCIAL STATEMENTS—DATE OF ACQUISITION
LEARNING OBJECTIVESDEFINITIONS OF SUBSIDIARY AND CONTROLREQUIREMENTS FOR THE INCLUSION OF SUBSIDIARIES IN THE CONSOLIDATED FINANCIAL STATEMENTSREASONS FOR SUBSIDIARY COMPANIESCONSOLIDATED FINANCIAL STATEMENTSINVESTMENTS AT THE DATE OF ACQUISITIONCONSOLIDATED BALANCE SHEETS: THE USE OF WORKPAPERSA COMPREHENSIVE ILLUSTRATION—MORE THAN ONE SUBSIDIARY COMPANYLIMITATIONS OF CONSOLIDATED STATEMENTSSummaryAPPENDIX A Deferred Taxes on the Date of AcquisitionACCOUNTING FOR UNCERTAIN TAX POSITIONSAPPENDIX B Consolidation of Variable Interest EntitiesQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
4 CONSOLIDATED FINANCIAL STATEMENTS AFTER ACQUISITION
LEARNING OBJECTIVESACCOUNTING FOR INVESTMENTS BY THE COST, PARTIAL EQUITY, AND COMPLETE EQUITY METHODSCONSOLIDATED STATEMENTS AFTER ACQUISITION—COST METHODRECORDING INVESTMENTS IN SUBSIDIARIES—EQUITY METHOD (PARTIAL OR COMPLETE)ELIMINATION OF INTERCOMPANY REVENUE AND EXPENSE ITEMSINTERIM ACQUISITIONS OF SUBSIDIARY STOCKCONSOLIDATED STATEMENT OF CASH FLOWSILLUSTRATION OF PREPARATION OF A CONSOLIDATED STATEMENT OF CASH FLOWS—YEAR OF ACQUISITIONCOMPARE U.S. GAAP AND IFRS REGARDING EQUITY METHODSummaryAPPENDIX A Alternative Workpaper FormatAPPENDIX B Deferred Tax Consequences When Affiliates File Separate Income Tax Returns—Undistributed IncomeConsolidated Tax Returns—Affiliated Companies (80% or More Ownership Levels)Separate Tax Returns—Deferred Tax Consequences Arising Because of Undistributed Subsidiary IncomeThe Cost Method—Separate Tax ReturnsUndistributed Income Is Expected to Be Realized When the Subsidiary Is SoldThe Partial and Complete Equity Methods—Separate Tax ReturnsQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS

5 ALLOCATION AND DEPRECIATION OF DIFFERENCES BETWEEN IMPLIED AND BOOK VALUES
LEARNING OBJECTIVESALLOCATION OF THE DIFFERENCE BETWEEN IMPLIED AND BOOK VALUES TO ASSETS AND LIABILITIES OF SUBSIDIARY—ACQUISITION DATEEFFECT OF ALLOCATION AND DEPRECIATION OF DIFFERENCES BETWEEN IMPLIED AND BOOK VALUES ON CONSOLIDATED NET INCOME—YEAR SUBSEQUENT TO ACQUISITIONCONSOLIDATED STATEMENTS WORKPAPER—INVESTMENT RECORDED USING THE COST METHODCOST METHOD ANALYSIS OF CONTROLLING AND NONCONTROLLING INTERESTS IN CONSOLIDATED NET INCOME AND RETAINED EARNINGSCONSOLIDATED STATEMENTS WORKPAPER—INVESTMENT RECORDED USING PARTIAL EQUITY METHODPARTIAL EQUITY METHOD ANALYSIS OF CONTROLLING AND NONCONTROLLING INTERESTS IN CONSOLIDATED NET INCOME AND RETAINED EARNINGSCONSOLIDATED STATEMENTS WORKPAPER—INVESTMENT RECORDED USING COMPLETE EQUITY METHODCOMPLETE EQUITY METHOD ANALYSIS OF CONTROLLING INTEREST IN CONSOLIDATED NET INCOME AND RETAINED EARNINGSADDITIONAL CONSIDERATIONS RELATING TO TREATMENT OF DIFFERENCE BETWEEN IMPLIED AND BOOK VALUESPUSH DOWN ACCOUNTINGIFRS vs U.S. GAAP ON RESEARCH & DEVELOPMENT COSTSSummaryQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
6 ELIMINATION OF UNREALIZED PROFIT ON INTERCOMPANY SALES OF INVENTORY
LEARNING OBJECTIVESEFFECTS OF INTERCOMPANY SALES OF MERCHANDISE ON THE DETERMINATION OF CONSOLIDATED BALANCESCOST METHOD: CONSOLIDATED STATEMENTS WORKPAPER—UPSTREAM SALESCOST METHOD—ANALYSIS OF CONSOLIDATED NET INCOME AND CONSOLIDATED RETAINED EARNINGSCONSOLIDATED STATEMENTS WORKPAPER—PARTIAL EQUITY METHODPARTIAL EQUITY METHOD—ANALYSIS OF CONSOLIDATED NET INCOME AND CONSOLIDATED RETAINED EARNINGSCONSOLIDATED STATEMENTS WORKPAPER—COMPLETE EQUITY METHODCOMPLETE EQUITY METHOD—ANALYSIS OF CONSOLIDATED NET INCOME AND CONSOLIDATED RETAINED EARNINGSSUMMARY OF WORKPAPER ENTRIES RELATING TO INTERCOMPANY SALES OF INVENTORYINTERCOMPANY PROFIT PRIOR TO PARENT–SUBSIDIARY AFFILIATIONSummaryAPPENDIX Deferred Taxes and Intercompany Sales of InventoryDEFERRED TAX CONSEQUENCES ARISING BECAUSE OF UNREALIZED INTERCOMPANY PROFITINTERCOMPANY SALES OF INVENTORY—COST AND PARTIAL EQUITY METHODUNDISTRIBUTED SUBSIDIARY INCOME—IMPACT OF UNREALIZED INTERCOMPANY PROFIT ON THE CALCULATION OF DEFERRED TAXESQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
7 ELIMINATION OF UNREALIZED GAINS OR LOSSES ON INTERCOMPANY SALES OF PROPERTY AND EQUIPMENT
LEARNING OBJECTIVESINTERCOMPANY SALES OF LAND (NONDEPRECIABLE PROPERTY)INTERCOMPANY SALES OF DEPRECIABLE PROPERTY (MACHINERY, EQUIPMENT, AND BUILDINGS)CONSOLIDATED STATEMENTS WORKPAPER—COST AND PARTIAL EQUITY METHODSCALCULATION OF CONSOLIDATED NET INCOME AND CONSOLIDATED RETAINED EARNINGSCONSOLIDATED STATEMENTS WORKPAPER—COMPLETE EQUITY METHODCALCULATION AND ALLOCATION OF CONSOLIDATED NET INCOME; CONSOLIDATED RETAINED EARNINGS: COMPLETE EQUITY METHODSUMMARY OF WORKPAPER ENTRIES RELATING TO INTERCOMPANY SALES OF EQUIPMENTINTERCOMPANY INTEREST, RENTS, AND SERVICE FEESSummaryAPPENDIX Deferred Tax Consequences Related to Intercompany Sales of EquipmentIMPACT OF UNREALIZED INTERCOMPANY PROFIT ON THE CALCULATION OF DEFERRED TAX CONSEQUENCES RELATED TO UNDISTRIBUTED SUBSIDIARY INCOMECALCULATIONS (AND ALLOCATION) OF CONSOLIDATED NET INCOME AND CONSOLIDATED RETAINED EARNINGSQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
8 CHANGES IN OWNERSHIP INTEREST
LEARNING OBJECTIVESPARENT ACQUIRES SUBSIDIARY STOCK THROUGH SEVERAL OPEN-MARKET PURCHASES—COST METHODPARENT SELLS SUBSIDIARY STOCK INVESTMENT ON THE OPEN MARKET—COST METHODEQUITY METHOD—PURCHASES AND SALES OF SUBSIDIARY STOCK BY THE PARENTPARENT SELLS SUBSIDIARY STOCK INVESTMENT ON THE OPEN MARKET—COST METHODSUBSIDIARY ISSUES STOCKSummaryQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
9 INTERCOMPANY BOND HOLDINGS AND MISCELLANEOUS TOPICS—CONSOLIDATED FINANCIAL STATEMENTS
LEARNING OBJECTIVESINTERCOMPANY BOND HOLDINGSACCOUNTING FOR BONDS—A REVIEWCONSTRUCTIVE GAIN OR LOSS ON INTERCOMPANY BOND HOLDINGSACCOUNTING FOR INTERCOMPANY BONDS ILLUSTRATEDBOOK ENTRY RELATED TO BOND INVESTMENTINTERIM PURCHASE OF INTERCOMPANY BONDSNOTES RECEIVABLE DISCOUNTEDSTOCK DIVIDENDS ISSUED BY A SUBSIDIARY COMPANYDIVIDENDS FROM PREACQUISITION EARNINGSSUBSIDIARY WITH BOTH PREFERRED AND COMMON STOCK OUTSTANDINGCONSOLIDATING A SUBSIDIARY WITH PREFERRED STOCK OUTSTANDINGSummaryQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
10 INSOLVENCY—LIQUIDATION AND REORGANIZATION
LEARNING OBJECTIVESCONTRACTUAL AGREEMENTSBANKRUPTCYLIQUIDATION (CHAPTER 7)REORGANIZATION UNDER THE REFORM ACT (CHAPTER 11)TRUSTEE ACCOUNTING AND REPORTINGREALIZATION AND LIQUIDATION ACCOUNTSummaryQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
11 INTERNATIONAL FINANCIAL REPORTING STANDARDS
LEARNING OBJECTIVESTHE INCREASING IMPORTANCE OF INTERNATIONAL ACCOUNTING STANDARDSTHE ROAD TO CONVERGENCE—U.S. GAAP AND IFRSSIGNIFICANT SIMILARITIES AND DIFFERENCES BETWEEN U.S. GAAP AND IFRSGAAP HIERARCHY—U.S. VERSUS IFRSLONG-TERM CONVERGENCE ISSUES—FASB AND IASBLEASE ACCOUNTING CONVERGENCERevenue Recognition ConvergenceFinancial Statement PresentationCURRENT AND POTENTIAL CHANGES TO FINANCIAL STATEMENTSINTERNATIONAL CONVERGENCE ISSUESAMERICAN DEPOSITORY RECEIPTS: AN OVERVIEWSummaryAppendix A: List of Current International Financial Reporting Standards, Issued by IASC and IASBQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
12 ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS AND HEDGING FOREIGN EXCHANGE RISK
LEARNING OBJECTIVESEXCHANGE RATES—MEANS OF TRANSLATIONMEASURED VERSUS DENOMINATEDFOREIGN CURRENCY TRANSACTIONSUSING FORWARD CONTRACTS AS A HEDGESummaryQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
13 TRANSLATION OF FINANCIAL STATEMENTS OF FOREIGN AFFILIATES
LEARNING OBJECTIVESACCOUNTING FOR OPERATIONS IN FOREIGN COUNTRIESTRANSLATING FINANCIAL STATEMENTS OF FOREIGN AFFILIATESOBJECTIVES OF TRANSLATION— SFAS No. 52 [ASC 830–30]TRANSLATION METHODSIDENTIFYING THE FUNCTIONAL CURRENCYTRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTSTRANSLATION OF FOREIGN FINANCIAL STATEMENTS ILLUSTRATEDFINANCIAL STATEMENT DISCLOSUREHISTORICAL DEVELOPMENTS OF ACCOUNTING STANDARDSSummaryAPPENDIX Accounting for a Foreign Affiliate and Preparation of Consolidated Statements Workpaper IllustratedDATE OF ACQUISITIONACCOUNTING FOR AN INVESTMENT IN A FOREIGN AFFILIATE—AFTER ACQUISITIONCONSOLIDATION WHEN THE TEMPORAL METHOD OF TRANSLATION IS USEDREMEASUREMENT AND TRANSLATION OF FOREIGN CURRENCY TRANSACTIONSINTERCOMPANY RECEIVABLES AND PAYABLESELIMINATION OF INTERCOMPANY PROFITLIQUIDATION OF A FOREIGN INVESTMENTQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
14 REPORTING FOR SEGMENTS AND FOR INTERIM FINANCIAL PERIODS
LEARNING OBJECTIVESNEED FOR DISAGGREGATED FINANCIAL DATASTANDARDS OF FINANCIAL ACCOUNTING AND REPORTINGINTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB) POSITION ON SEGMENT REPORTINGINTERIM FINANCIAL REPORTINGSummaryAPPENDIX GE Segmental Disclosures, 2010 Annual Report (partial)Basic for PresentationQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
15 PARTNERSHIPS: FORMATION, OPERATION, AND OWNERSHIP CHANGES
LEARNING OBJECTIVESPARTNERSHIP DEFINEDREASONS FOR FORMING A PARTNERSHIPCHARACTERISTICS OF A PARTNERSHIPPARTNERSHIP AGREEMENTACCOUNTING FOR A PARTNERSHIPSPECIAL PROBLEMS IN ALLOCATION OF INCOME AND LOSSFINANCIAL STATEMENT PRESENTATIONCHANGES IN THE OWNERSHIP OF THE PARTNERSHIPSECTION A: ADMISSION OF A NEW PARTNERSECTION B: WITHDRAWAL OF A PARTNERSummaryQUESTIONSEXERCISESASC ExercisesPROBLEMS
16 PARTNERSHIP LIQUIDATION
LEARNING OBJECTIVESSTEPS IN THE LIQUIDATION PROCESSPRIORITIES OF PARTNERSHIP AND PERSONAL CREDITORSSIMPLE LIQUIDATION ILLUSTRATEDINSTALLMENT LIQUIDATIONINCORPORATION OF A PARTNERSHIPSummaryQUESTIONSEXERCISESASC ExercisesPROBLEMS
17 INTRODUCTION TO FUND ACCOUNTING
LEARNING OBJECTIVESCLASSIFICATIONS OF NONBUSINESS ORGANIZATIONSDISTINCTIONS BETWEEN NONBUSINESS ORGANIZATIONS AND PROFIT-ORIENTED ENTERPRISESFINANCIAL ACCOUNTING AND REPORTING STANDARDS FOR NONBUSINESS ORGANIZATIONSFUND ACCOUNTINGREPORTING INVENTORY AND PREPAYMENTS IN THE FINANCIAL STATEMENTSSummaryAPPENDIX City of Atlanta Partial Financial StatementsQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
18 INTRODUCTION TO ACCOUNTING FOR STATE AND LOCAL GOVERNMENTAL UNITS
LEARNING OBJECTIVESTHE HISTORY OF GENERALLY ACCEPTED GOVERNMENTAL ACCOUNTING STANDARDSTHE STRUCTURE OF GOVERNMENTAL ACCOUNTINGGOVERNMENTAL FUND ENTITIESPROPRIETARY FUNDSFIDUCIARY FUNDSCAPITAL ASSETS AND LONG-TERM DEBTEXTERNAL REPORTING REQUIREMENTS ( GASB STATEMENT No. 34 )GOVERNMENT FUND-BASED REPORTINGGOVERNMENT-WIDE REPORTINGMANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)INTERFUND ACTIVITYSummaryAPPENDIX A Government-wide Financial Statements City of AtlantaQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
19 ACCOUNTING FOR NONGOVERNMENT NONBUSINESS ORGANIZATIONS: COLLEGES AND UNIVERSITIES, HOSPITALS AND OTHER HEALTH CARE ORGANIZATIONS
LEARNING OBJECTIVESSOURCES OF GENERALLY ACCEPTED ACCOUNTING STANDARDS FOR NONGOVERNMENT NONBUSINESS ORGANIZATIONSFUND ACCOUNTINGACCRUAL BASIS OF ACCOUNTINGCLASSIFICATION OF REVENUE AND EXPENSEACCOUNTING FOR CURRENT FUNDSCONTRIBUTIONSACCOUNTING FOR PLANT FUNDSACCOUNTING FOR ENDOWMENT FUNDSACCOUNTING FOR INVESTMENTSACCOUNTING FOR LOAN FUNDSACCOUNTING FOR AGENCY (CUSTODIAL) FUNDSACCOUNTING FOR ANNUITY AND LIFE INCOME FUNDSISSUES RELATING TO COLLEGES AND UNIVERSITIESISSUES RELATING TO HOSPITALSSummaryAPPENDIX Sample Financial Statements for Private Educational InstitutionsQUESTIONSANALYZING FINANCIAL STATEMENTSEXERCISESASC ExercisesPROBLEMS
GLOSSARY
APPENDIX ASC: RESEARCHING THE FASB CODIFICATION
CODIFICATION OPENING PAGE
APPENDIX PV: TABLES OF PRESENT VALUES
INDEX

Content preview from Advanced Accounting, 5th Edition

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ACCOUNTING FOR NONGOVERNMENT NONBUSINESS ORGANIZATIONS: COLLEGES AND UNIVERSITIES, HOSPITALS AND OTHER HEALTH CARE ORGANIZATIONS

LEARNING OBJECTIVES

Describe the source of accounting standards for nongovernment nonbusiness organizations (NNOs).

Identify the three basic statements for NNOs.

Describe the basic funds used by nongovernment nonbusiness organizations.

Distinguish between a current restricted fund and an unrestricted fund.

Explain the term “assets whose use is limited.”

Distinguish between a mandatory and a nonmandatory transfer.

Explain how contributions are recorded by NNOs.

Understand how donated services are recorded.

Describe the funds used to account for property, plant ...

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Advanced Accounting, 5th Edition

by Debra C. Jeter, Paul K. Chaney

ACCOUNTING FOR NONGOVERNMENT NONBUSINESS ORGANIZATIONS: COLLEGES AND UNIVERSITIES, HOSPITALS AND OTHER HEALTH CARE ORGANIZATIONS

LEARNING OBJECTIVES

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.