经济环境下的财务会计 英文版 第3版PDF|Epub|txt|kindle电子书版本网盘下载

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1 Financial Accounting and Its Economic Context2

PART 1 AN OVERVIEW OF FINANCIAL ACCOUNTING2

1 FINANCIAL ACCOUNTING AND ITS ECONOMIC CONTEXT2

PART 1 AN OVERVIEW OF FINANCIAL ACCOUNTING2

Consumption and Investment4

THE DEMAND FOR FINANCIAL INFORMATION: A USER S ORIENTATION4

The Demand for Documentation5

Where to Invest?5

The Auditor s Report，the Management Letter，and the Financial Statements6

Martin and the CPA：Different Perspectives6

The Demand for an Independent Audit6

The Financial Statements: Definitions and Preliminary Analysis10

What Form of Investment: Debt or Equity?12

A Decision Is Made but Important Questions Still Remain13

Financial Accounting Information: More Than the Financial Statements14

THE ENVIRONMENT OF FINANCIAL ACCOUNTING14

Providers of Capital：Investors and Creditors16

Companies (Managers)16

Independent Auditors17

Contracts17

Legal Liability18

Relationships Among the Capital Providers，Management，and the Independent Auditor18

Ethics and Professional Reputation20

ECONOMIC CONSEQUENCES: MANAGEMENT S PERSPECTIVE21

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES22

The Securities and Exchange Commission22

ACCOUNTING STANDARD SETTING: A POLITICAL PROCESS23

The Financial Accounting Standards Board23

Reactions to Economic Consequences: Lobbying Accounting Numbers24

INTERNATIONAL PERSPECTIVE: ACCOUNTING PRACTICES AND STANDARDS THROUGHOUT THE WORLD25

British-American-Dutch Model25

Continental Model26

South American Model26

Communist Model26

International Accounting Standard Setting26

Appendix 1A Three Other Kinds of Accounting30

NOT-FOR-PROFIT ACCOUNTING30

MANAGERIAL ACCOUNTING30

TAX ACCOUNTING30

COMPARING THE FOUR KINDS OF ACCOUNTING31

The Role of the Accounting Profession33

2 THE FINANCIAL STATEMENTS37

2 The Financial Statements37

BUSINESSES ARE LIKE FRUIT TREES38

Three Activities of a Business39

Businesses39

Fruit Trees39

THE CLASSIFIED BALANCE SHEET40

A Photograph of Financial Condition40

Balance Sheet Classifications42

Assets42

Liabilities46

Stockholders Equity47

THE INCOME STATEMENT49

Revenues49

Expenses50

THE STATEMENT OF RETAINED EARNINGS51

THE STATEMENT OF CASH FLOWS52

Cash Flows From Operating Activities52

Cash Flows From Financing Activities54

Cash Flows From Investing Activities54

RELATIONSHIPS AMONG THE FINANCIAL STATEMENTS54

INTERNATIONAL PERSPECTIVE: FINANCIAL STATEMENTS AND ANALYSES IN OTHER COUNTRIES56

3 Using Financial Statement Information76

PART 2 USE，MEASUREMENT，AND MECHANICS OF FINANCIAL STATEMENTS76

3 USING FINANCIAL STATEMENT INFORMATION76

PART 2 USE，MEASUREMENT AND MECHANICS OF FINANCIAL STATEMENTS76

PREDICTION AND CONTROL77

Financial Accounting Numbers as Prediction Aids77

Financial Accounting Numbers and Management Control78

The Audit Report79

ASSESSING EARNING POWER AND SOLVENCY79

Significant Transactions80

The Credit Rating81

Analyzing the Financial Statements82

Solvency Assessment95

LIMITATIONS OF FINANCIAL ACCOUNTING INFORMATION96

Management Biases97

Inherent GAAP Limitations99

INTERNATIONAL PERSPECTIVE: FINANCIAL STATEMENT ANALYSIS IN AN INTERNATIONAL SETTING101

ANALYZING THE FINANCIAL STATEMENTS OF ALBERTSONS AND SAFEWAY102

A Word of Caution104

ASSUMPTIONS OF FINANCIAL ACCOUNTING132

Economic Entity Assumption132

4 THE MEASUREMENT FUNDAMENTALS OF FINANCIAL ACCOUNTING132

4 The Measurement Fundamentals of Financial Accounting132

Fiscal Period Assumption133

Going Concern Assumption134

Stable Dollar Assumption134

VALUATIONS ON THE BALANCE SHEET136

Four Alternative Valuation Bases137

Valuation Bases Used on the Balance Sheet138

THE PRINCIPLES OF FINANCIAL ACCOUNTING MEASUREMENT140

The Principle of Objectivity140

The Principles of Matching and Revenue Recognition142

The Principle of Consistency144

TWO EXCEPTIONS TO THE BASIC PRINCIPLES: MATERIALITY AND CONSERVATISM146

Materiality146

Conservatism147

INTERNATIONAL PERSPECTIVE: AN EXTREME FORM OF CONSERVATISM THAT ENCOURAGES INCOME MANIPULATION149

Appendix 4A The Time Value of Money152

INTEREST: THE PRICE OF MONEY152

TIME VALUE153

Size of Time Value153

Inflation153

TIME VALUE COMPUTATIONS154

Future Value154

Present Value158

An Illustration159

PRESENT VALUE AND FINANCIAL ACCOUNTING163

5 THE MECHANICS OF FINANCIAL ACCOUNTING182

5 The Mechanics of Financial Accounting182

ECONOMIC EVENTS183

Relevant Events183

Objectivity183

THE FUNDAMENTAL ACCOUNTING EQUATION184

Assets184

Stockholders Equity185

BUSINESS TRANSACTIONS，THE ACCOUNTING EQUATION，AND THE FINANCIAL STATEMENTS185

Liabilities185

Transactions and the Accounting Equation186

The Accounting Equation and the Financial Statements187

THE JOURNAL ENTRY190

RECOGNIZING GAINS AND LOSSES196

PERIODIC ADJUSTMENTS197

Accruals197

Cost Expirations200

Revaluation Adjustments206

FINANCIAL STATEMENT PRESENTATION IN A MULTINATIONAL ENVIRONMENT207

Appendix 5A The Accounting Cycle: An Overview215

The Journal216

The Ledger217

The Work Sheet218

Preparation of the Financial Statements224

A COMPREHENSIVE EXAMPLE OF THE ACCOUNTING CYCLE226

Appendix 5B Mechanics: A User s Perspective230

PART 3 ASSETS: A CLOSER LOOK258

6 THE CURRENT ASSET CLASSIFICATION，CASH，AND ACCOUNTS RECEIVABLE258

6 The Current Asset Classification，Cash，and Accounts Receivable258

PART 3 ASSETS：A CLOSER LOOK258

THE CURRENT ASSET CLASSIFICATION259

The Relative Size of Current Assets Across Industries260

Measures Using Current Assets: Working Capital，Current Ratio，and Quick Ratio260

The Economic Consequences of Working Capital，the Current Ratio，and the Quick Ratio262

Limitations of the Current Asset Classification263

CASH264

Restrictions on the Use of Cash265

Proper Management of Cash266

Control of Cash267

ACCOUNTS RECEIVABLE267

Importance of Accounts Receivable268

Net Realizable Value: The Valuation Base for Accounts Receivable269

Cash Discounts270

Accounting for Uncollectibles (Bad Debts)272

Accounting for Sales Returns278

ACCOUNTS RECEIVABLE FROM A USER S PERSPECTIVE278

When Should a Receivable Be Recorded?278

Balance Sheet Valuation of Receivables280

THE COLLECTION PERIOD FOR ACCOUNTS RECEIVABLE281

Appendix 6A Short-Term Notes Receivable286

ACCOUNTING FOR SHORT-TERM NOTES RECEIVABLE286

Example: Housing Finance Company287

Methods 1 and 2 Compared288

Financial Institutions and Uncollectible Loans288

Appendix 6B289

Accounting for Receivables and Payables Expressed in Foreign Currencies289

Exchange Rates Among Currencies290

Receivables and Payables Held in Other Currencies291

Hedging and the Economic Consequences of Fluctuating Exchange Rates293

7 MERCHANDISE INYENTORY311

7 Merchandise Inventory311

THE RELATIVE SIZE OF INVENTORIES312

ACCOUNTING FOR INVENTORY: FOUR IMPORTANT ISSUES312

ACQUIRING INVENTORY: WHAT COSTS TO CAPITALIZE?313

What Items or Units to Include?314

Determining the Costs of Manufacturing Inventories316

CARRYING INVENTORY: THE PERPETUAL OR PERIODIC METHOD?317

Perpetual and Periodic Methods: Costs and Benefits319

Errors in the Inventory Count321

SELLING INVENTORY: WHICH COST FLOW ASSUMPTION?322

Specific Identification323

Three Inventory Cost Flow Assumptions: Averaging，FIFO，and LIFO324

Inventory Cost Flow Assumptions：Effects on the Financial Statements326

Inventory Cost Flow Assumptions: Effects on Federal Income Taxes327

Choosing an Inventory Cost Flow Assumption: Trade-Offs328

ENDING INVENTORY: APPLYING THE LOWER-OF-COST-OR-MARKET RULE332

The Lower-of-Cost-or-Market Rule and Hidden Reserves333

INTERNATIONAL PERSPECTIVE: JAPANESE BUSINESS AND INVENTORY ACCOUNTING334

Appendix 7A339

Determining Market Values for Inventories and Applying the Lower-of-Cost-or-Market Rule339

8 INVESTMENTS IN EQUITY SECURITIES355

8 Investments in Equity Securities355

EQUITY SECURITIES CLASSIFIED AS CURRENT356

The Intention to Convert: Another Area of Subjectivity357

The Existence of a Ready Market357

TRADING AND AVAILABLE-FOR-SALE SECURITIES358

Declaration and Receipt of Cash Dividends359

Purchasing Trading and Available-for-Sale Securities359

Price Changes of Securities on Hand at the End of the Accounting Period360

Sale of Securities360

Discussion of Mark-to-Market Accounting363

Reclassifications and Permanent Market Value Declines363

Accounting for Long-Term Equity Investments364

LONG-TERM EQUITY INVESTMENTS364

The Cost Method365

The Equity Method366

Some Cautions to Financial Statement Users About the Equity Method368

Business Acquisitions，Mergers，and Consolidated Financial Statements369

The Equity Method or Consolidated Statements?371

Accounting for Equity Investments: A Summary372

GOODWILL ACCOUNTING: CONTROVERSY AND INTERNATIONAL IMPLICATIONS374

Appendix 8A379

Consolidated Financial Statements379

Accounting for Business Acquisitions and Mergers: The Purchase Method380

Preparing Consolidated Financial Statement for Multinational391

Quality of Earnings Cases A Comprehensive Review409

CASE 1: LIBERTY MANUFACTURING409

CASE 2: MICROLINE CORPORATION412

CASE 3: TECHNIC ENTERPRISES AND SONAR-SUN INC．416

9 Long-Lived Assets423

9 LONG-LIVED ASSETS423

THE RELATIVE SIZE OF LONG-LIVED ASSETS424

LONG-LIVED ASSET ACCOUNTING: GENERAL ISSUES AND FINANCIAL STATEMENT EFFECTS425

AN OVERVIEW OF LONG-LIVED ASSET ACCOUNTING428

ACQUISITION: WHAT COSTS TO CAPITALIZE?428

The Acquisition of Land429

Lump-Sum Purchases429

Construction of Long-Lived Assets430

POSTACQUISITION EXPENDITURES: BETTERMENTS OR MAINTENANCE?431

COST ALLOCATION: AMORTIZING CAPITALIZED COSTS432

Estimating the Useful Life and Salvage Value432

Revising the Useful-Life Estimate433

Cost Allocation (Depreciation) Methods434

Cost Allocation Methods and the Matching Principle440

How Does Management Choose an Acceptable Cost Allocation Method?440

Depreciation Methods for Income Tax Purposes441

DISPOSAL: RETIREMENTS，SALES，AND TRADE-INS443

Retirement of Long-Lived Assets443

Trade-Ins of Long-Lived Assets444

Sale of Long-Lived Assets444

INTERNATIONAL PERSPECTIVE: LONG-LIVED ASSETS AND CURRENT VALUES446

Appendix 9A450

Intangible Assets and Deferred Costs450

COPYRIGHTS，PATENTS，AND TRADEMARKS451

THE COSTS OF DEVELOPING COMPUTER SOFTWARE451

GOODWILL452

ORGANIZATIONAL COSTS453

RESEARCH AND DEVELOPMENT COSTS453

Appendix 9B454

Accounting for Long-Lived Assets—A Review and Critique454

PROBLEMS WITH HISTORICAL COST454

PROBLEMS WITH COST ALLOCATION455

MISCONCEPTIONS ABOUT COST ALLOCATION455

PART 4 LIABILITIES AND STOCKHOLDERS EQUITY：A CLOSER LOOK474

10 Introduction to Liabilities：Economic Consequences，Current Liabilities，and Contingencies474

10 INTRODUCTION TO LIABILITIES: ECONOMIC CONSEQUENCES，CURRENT LIABILITIES，AND CONTINGENCIES474

PART 4 LIABILITIES AND STOCKHOLDERS EQUITY: A CLOSER LOOK475

WHAT IS A LIABILITY?475

THE RELATIVE SIZE OF LIABILITIES ON THE BALANCE SHEET475

REPORTING LIABILITIES ON THE BALANCE SHEET: ECONOMIC CONSEQUENCES476

Stockholders and Investors476

Creditors477

Management477

Auditors478

CURRENT LIABILITIES479

The Relative Size of Current Liabilities on the Balance Sheet479

Valuing Current Liabilities on the Balance Sheet480

Reporting Current Liabilities: An Economic Consequence480

ACCOUNTING FOR CURRENT LIABILITIES481

Determinable Current Liabilities481

Contingent Liabilities: A Scenario489

CONTINGENCIES AND CONTINENT LIABILITIES489

Accounting for Contingencies491

INTERNATIONAL PERSPECTIVE: EXECUTIVE COMPENSATION AND U．S．BUSINESS IN THE GLOBAL MARKETPLACE495

Appendix 10A501

Retirement Costs: Pensions and Postretirement Health Care and Insurance501

PENSIONS501

Defined-Contribution Plan501

Defined-Benefit Plan502

POSTRETIREMENT HEALTH CARE AND INSURANCE COSTS504

Deferred Income Taxes505

THE CONCEPT OF DEFERRED INCOME TAXES505

Appendix 10B505

ACCOUNTING ENTRIES FOR DEFERRED INCOME TAXES506

DEFERRED INCOME TAXES: ADDITIONAL ISSUES507

THE CONSERVATISM RATIO509

11 Long-Term Liabilities: Notes，Bonds，and Leases527

11 LONG-TERM LIABILITIES: NOTES，BONDS，AND LEASES527

THE RELATIVE SIZE OF LONG-TERM LIABILITIES528

THE ECONOMIC CONSEQUENCES OF REPORTING LONG-TERM LIABILITIES530

BASIC DEFINITIONS AND DIFFERENT CONTRACTUAL FORMS531

EFFECTIVE INTEREST RATE532

Installment and Non-Interest-Bearing Obligations532

Interest-Bearing Obligations533

ACCOUNTING FOR LONG-TERM OBLIGATIONS: THE EFFECTIVE INTEREST METHOD534

ACCOUNTING FOR LONG-TERM NOTES PAYABLE535

Equipment Exchanged for a Non-Interest-Bearing Note535

BONDS PAYABLE537

Bond Terminology537

The Price of a Bond539

The Effective Rate and the Stated Rate540

Accounting for Bonds Payable541

The Effective Interest Method and Changing Interest Rates546

Bond Redemptions547

Financial Instruments and Off-Balance-Sheet Risks548

LEASES549

Operating Leases550

Capital Leases550

Operating Leases，Capital Leases，and Off Balance-Sheet Financing552

INTERNATIONAL PERSPECTIVE: THE IMPORTANCE OF DEBT FINANCING IN OTHER COUNTRIES554

Appendix 11A559

Accounting for Long-Term Investments in Debt Securities559

Long-Term Notes Receivable559

Accounting for Long-Term Notes Receivable560

Investments in Corporate Bonds561

Accounting for Investments in Corporate Bonds562

The Determination of Bond Prices564

Appendix 11B564

Determine the Effective (Actual)Rate of Return565

Determine the Required Rate of Return565

Compare the Effective Rate to the Required Rate566

Factors Determining Bond Prices566

12 Stockholders Equity585

12 STOCKHOLDERS EQUITY585

THE RELATIVE IMPORTANCE OF LIABILITIES，CONTRIBUTED CAPITAL，AND EARNED CAPITAL586

Characteristics of Debt587

DEBT AND EQUITY DISTINGUISHED587

Characteristics of Equity588

Why Is It Important to Distinguish Debt From Equity588

THE ECONOMIC CONSEQUENCES ASSOCIATED WITH ACCOUNTING FOR STOCKHOLDERS EQUITY591

ACCOUNTING FOR STOCKHOLDERS EQUITY592

Preferred Stock593

Common Stock596

Treasury Stock598

Stock Options602

Retained Earnings603

THE STATEMENT OF STOCKHOLDERS EQUITY609

INTERNATIONAL PERSPECTIVE: THE RISE OF INTERNATIONAL EQUITY MARKETS610

Appendix 12A617

Forms of Business617

THE CORPORATE FORM OF ORGANIZATION617

Corporate Income Taxes618

Stockholder Returns: Capital Appreciation and Dividends618

Limited Liability618

PROPRIETORSHIPS AND PARTNERSHIPS619

Legal Liability of Partners: Unlimited619

Income Taxes: Personal Rates and Unaffected by Withdrawals619

Returns to Partners: Limited Markets but Relatively Free Withdrawals620

CHOOSING A FORM OF BUSINESS: A SUMMARY620

PART 5 INCOME AND FLOWS642

13 The Complete Income Statement642

13 THE COMPLETE INCOME STATEMENT642

PART 5 INCOME AND FLOWS642

THE ECONOMIC CONSEQUENCES ASSOCIATED WITH INCOME MEASUREMENT AND DISCLOSURE643

THE MEASUREMENT OF INCOME: DIFFERENT MEASURES FOR DIFFERENT OBJECTIVES644

Capital and Operating Transactions: A Framework646

Classifying Operating Transactions648

A COMPLETE INCOME STATEMENT DISCLOSURE AND PRESENTATION649

(1)Operating Revenues and Expenses: Usual and Frequent651

(2)Other Revenues and Expenses: Unusual or Infrequent651

(3)Disposal of a Business Segment652

(4)Extraordinary Items: Unusual and Infrequent654

(5)Changes in Accounting Principles654

EARNINGS-PER-SHARE DISCLOSURE656

INTRAPERIOD TAX ALLOCATIOIN658

INCOME STATEMENT CATEGORIES: USEFUL FOR DECISIONS BUT SUBJECTIVE659

RETAINED EARNINGS AND PRIOR ADJUSTMENTS661

INTERNATIONAL PERSPECTIVE: INVESTMENTS AND INCOME STATEMENT DISCLOSURE661

14 THE STATEMENT OF CASH FLOWS682

14 The Statement of Cash Flows682

THE DEFINITON OF CASH683

A GENERAL DESCRIPTION OF THE STATEMENT OF CASH FLOWS684

Cash Provided (Used) by Operating Activities685

Cash Provided (Used)by Investing Activities686

Cash Provided (Used)by Financing Activities686

HOW THE STATEMENT OF CASH FLOWS COMPLEMENTS THE INCOME STATEMENT AND BALANCE SHEET688

HOW THE STATEMENT OF CASH FLOWS CAN BE USED689

Analyzing the Statement of Cash Flows689

The Importance of Cash From Operating Activities690

The Importance of Significant Noncash Transactions691

THE STATEMENT OF CASH FLOWS: ECONOMIC CONSEQUENCES692

THE MECHANICS OF PREPARING THE STATEMENT OF CASH FLOWS693

A Conceptual Description of the Statement of Cash Flows693

Deriving Cash Flow From Accrual Financial Statements，695

Cash Provided (Used)by Operating Activities，696

Cash Provided (Used)by Investing Activities701

Cash Provided (Used)by Financing Activities702

THE COMPLETE STATEMENT OF CASH FLOWS704

The Direct Method704

The Indirect Method704

The Direct and Indirect Methods: A Reconciliation706

ANALYZING THE STATEMENT OF CASH FLOWS: AN APPLICATION707

Explaining the Changes in the Cash Balance707

Summarizing the Cash Effects of Operating Transactions707

INTERNATIONAL PRESPECTIVE: THE STATEMENT OF CASH FLOWS708

Summarizing the Cash Effect of Investing and Financing Transactions708

Quality of Earnings Cases734

A Comprehensive Review734

CASE 1: AVERY CORPORATION734

CASE 2: ZENITH SERVICES739

CASE 3: PIERCE AND SNOWDEN743

APPENDICES753

A CONVERTING ACCRUAL NUMBERS TO CASH FLOWS: THE DIRECT AND INDIRECT FORMS OF PRESENTATION753

APPENDICES753

A Converting Accrual Numbers to Cash Flows：The Direct and Indirect Forms of Presentation753

PRESENTING THE OPERATING SECTION OF THE STATEMENT OF CASH FLOWS: DIRECT AND INDIRECT METHODS756

T-ACCOUNT ANALYSIS: ANOTHER METHOD TO CONVERT ACCRUAL NUMBERS TO CASH FLOWS756

B FINANCIAL ACCOUNTING SIMULATION PROJECT764

B Financial Accounting Simulation Project764

C THE ANNUAL REPORT OF MCI CORPORATION783

C The Annual Report of MCI Corporation783