Intermediate Accounting, Vol. 1 (4th Edition)

✍ Scribed by Kin Lo, George Fisher

• Publisher: Pearson Canada
• Year: 2019
• Tongue: English
• Leaves: 726
• Edition: 4
• Category: Library

✦ Synopsis

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Authors Kin Lo and George Fisher present the how and why of reporting accounting information from within an easily-understood theoretical framework. The fourth edition incorporates current International Financial Reporting Standards (IFRS) and Accounting Standards for Private Enterprise (ASPE) where appropriate.

 

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✦ Table of Contents

Cover
Title Page
Copyright Page
About the Authors
Brief Contents
Contents
Preface
Acknowledgments
Chapter 1: Fundamentals of Financial Accounting Theory
A. Uncertainty and Information Asymmetries
1. Adverse Selection Example
2. Moral Hazard Example
3. Adverse Selection and Moral Hazard Defined
4. Application of Adverse Selection and Moral Hazard to Accounting
5. Moral Hazard in Action: The Financial Crisis of 2008
B. Desirable Characteristics of Accounting Information and Trade-Offs
C. Economic Consequences of Accounting Choice and Earnings Management
D. Accounting and Securities Markets
1. Accounting Information in Securities Markets
2. Using Information from Securities Markets in Accounting
E. Summary
F. Answers to Checkpoint Questions
G. Glossary
H. References
I. Problems
J. Mini-Cases
Chapter 2: Conceptual Frameworks for Financial Reporting
A. Conceptual Frameworks for Financial Accounting as Strategies to meet Market Demands for Information
1. Sketch of a Business Plan for a Carmaker
2. Outline of a Conceptual Framework for Financial Reporting
B. Components of the IFRS Conceptual Framework
1. Users and Their Needs
2. Objectives of Financial Reporting
3. Qualitative Characteristics
4. Elements of Financial Statements
5. Recognition
6. Measurement
7. Constraints
8. Assumptions
9. Example for Illustrating the Application of the IFRS Framework
10. Financial Information Prepared on Other Bases
C. Other Conceptual Frameworks
D. Standard Setting: Internationally and in Canada
1. Standards Internationally
2. Standards in Canada
3. Organization and Authority for Setting Accounting and Auditing Standards in Canada
4. Globalization of Standard Setting
E. Standards in Transition
F. Appendix: Illustration of Capital Maintenance Concepts
G. Summary
H. Answers to Checkpoint Questions
I. Glossary
J. References
K. Problems
L. Mini-Cases
Chapter 3: Accrual Accounting
A. Demand for Periodic Reporting and the Need for Accrual Accounting
B. Accrual Versus Cash Accounting
C. Uncertainty and the Essential Role of Estimates in Accrual Accounting
D. Quality of Earnings and Earnings Management
E. Periodicity, Cut-Off, and Subsequent Events
1. Periodicity
2. Cut-Off
F. Accounting Changes: Errors, Changes in Accounting Policy, and Changes in Estimates
1. Correction of Errors
2. Changes in Accounting Policy
3. Changes in Accounting Estimates
4. Illustrative Example for Practice
5. Summary
G. The Structure of Financial Reports and their Relationships
1. Overview of Financial Statement Presentation and Interrelationships
2. Balance Sheet (Statement of Financial Position)
3. Statement of Changes in Equity
4. Statement of Comprehensive Income
5. Statement of Cash Flows
6. Note Disclosures
7. Discontinued Operations and Other Non-Current Assets Held for Sale
8. Comparative Figures
9. Putting it All Together: An Illustrative Example
10. A Practical Illustration: Canadian Tire Corporation
H. Substantive Differences Between Relevant IFRS and ASPE
I. Appendix: Review of the Accounting Cycle
1. Journalizing
2. Posting
3. Adjustments
4. Preparing the Financial Statements
5. Journalizing Closing Entries
6. Posting of Closing Entries
7. Summary
J. Summary
K. Answers to Checkpoint Questions
L. Glossary
M. For Further Reading
N. References
O. Problems
P. Mini-Cases
Chapter 4: Revenue Recognition
A. Range of Conceptual Alternatives for Revenue Recognition
B. An Overview of Revenue Recognition Criteria
C. Revenue Recognition Criteria: A More Detailed Look
1. Identify the Contract
2. Identify the Performance Obligation
3. Determine the Transaction Price
4. Allocate the Transaction Price to Performance Obligations
5. Recognize Revenue in Accordance with Performance
6. Examples of Multiple Performance Obligations, Allocation, and Recognition: Franchise Fees
D. Other Related Issues
1. Expense Recognition
2. Contract Costs
3. Warranties
4. Onerous Contracts
E. Specific Revenue Recognition Situations
1. Consignment Sales
2. Installment Sales
3. Bill-and-Hold Arrangements
F. Accounting for Long-Term Contracts
1. Revenue Recognition for Cost-Plus Contracts
2. Revenue Recognition for Fixed-Price Contracts: Application of Changes in Estimates
3. Revenue Recognition for Fixed-Price Contracts: The Cost-to-Cost Approach
4. Accounting Cycle for Long-Term Contracts
5. Onerous Contracts
6. Revenue Recognition When Outcome of a Contract is Uncertain: Cost Recovery Method
7. Alternative in ASPE: Completed Contract Method
G. Risk of Earnings Overstatement in Long-Term Contracts
1. Intentional Overstatement: Earnings Management
2. Unintentional Overstatement: The Winner’s Curse
H. Presentation and Disclosure
1. General Presentation and Disclosure Requirements
2. Presentation and Disclosure for Long-Term Contracts
I. Substantive Differences Between IFRS and ASPE
J. Summary
K. Answers to Checkpoint Questions
L. Glossary
M. References
N. Problems
O. Mini-Cases
Chapter 5: Cash and Receivables
A. Cash and Cash Equivalents
1. Inclusions in Cash and Cash Equivalents
2. Exclusions from Cash and Cash Equivalents
3. Cash Held in Foreign Currencies
4. Negative Balances
5. Implications for the Cash Flow Statement
B. Bank Reconciliations
C. Cash Management, Internal Controls, and Fraud Prevention
1. Segregation of Duties
2. Monitoring by Staff and Customers
3. Implications for Internal Controls of Other Areas
D. Overview of Accounting for Non-Cash Assets
1. Initial Recognition and Measurement: Asset or Expense?
2. Asset Valuation on the Balance Sheet
3. Derecognition: Removal of an Asset from the Balance Sheet
E. Trade Receivables: Initial Classification, Recognition, and Measurement
F. Subsequent Measurement of Trade Receivables: Accounting for Bad Debts
1. Percentage of Sales Method (Income Statement Approach)
2. Aging of Accounts Method (Balance Sheet Approach)
G. Derecognition of Receivables: Collection, Write-Offs, and Disposals
1. Collection
2. Write-Offs
3. Transfer of Receivables (Factoring)
4. Transfer of Receivables (Securitization)
H. Comprehensive Illustration of Initial Recognition, Subsequent Measurement, and Derecognition of Accounts Receivable
I. Non-Trade Receivables
J. Accounting for Restructured Loans (from the Lender’s Perspective)
K. Potential Earnings Management Using Receivables
1. Revenue Recognition Policy
2. Change in Credit Policy Without Change in Allowance
3. Channel Stuffing
4. Change in the Calculation of Net Realizable Value
5. Sale of Receivables
L. Practical Illustration: Canadian Tire Corporation, Limited
M. Summary
N. Answers to Checkpoint Questions
O. Glossary
P. For Further Reading
Q. References
R. Problems
S. Mini-Cases
Chapter 6: Inventories
A. Information Systems for Inventory Control
1. Perpetual System
2. Periodic System
3. Comparison and Illustration
B. Initial Recognition and Measurement
1. Purchased Goods
2. Manufactured Goods
3. Manufactured Goods with Abnormal Production Levels
C. Subsequent Measurement and Derecognition: Cost Allocation Between the Balance Sheet and Income Statement
1. Specific Identification
2. Cost Flow Assumptions
3. Retail Inventory Method
D. Subsequent Measurement: Interaction of Cost Flow Assumptions and Information Systems for Inventory Control
E. Subsequent Measurement: Avoiding Overvaluation of Inventories
1. Meaning of “Market”
2. Unit of Evaluation
F. Accounting for Inventory Errors
G. Presentation and Disclosure
H. A Practical Illustration: Canadian Tire Corporation, Limited
I. Potential Earnings Management Using Inventories
1. Overproduction
2. Including Non-Production Costs in Inventory
3. Not Identifying Impaired or Discounted Items
J. Summary
K. Answers to Checkpoint Questions
L. Glossary
M. References
N. Appendix: Usage of Last-In, First-Out (LIFO) in the United States
1. Balance Sheet Effect and the LIFO Reserve
2. Income Effect and LIFO Liquidation
3. Distortion of Turnover Ratio
O. Problems
P. Mini-Cases
Chapter 7: Financial Assets
A. Introduction
B. Overview of Financial Asset Classification
C. Strategic Equity Investments
1. Subsidiaries
2. Joint Operations
3. Joint Ventures
4. Associates
D. Non-Strategic Investments
1. Fair Value Through Profit or Loss (FVPL)
2. Fair Value Through Other Comprehensive Income (FVOCI)
3. Amortized Cost
4. Exception for Equity Investments with an Irrevocable Election
5. Reclassifications from One Category to Another
6. Example: A Debt Investment to Illustrate the Differences Among FVPL, FVOCI, and Amortized Cost
E. Amortization of Debt Investments
1. The Effective Interest Method
2. Using Amortized Cost in the Accounting for Financial Assets
F. Impairment of Investments in Debt
G. Substantive Differences Between Relevant IFRS and ASPE
H. Summary
I. Answers to Checkpoint Questions
J. Glossary
K. References
L. Problems
M. Mini-Cases
Chapter 8: Property, Plant, and Equipment
A. Initial Recognition and Measurement
1. What Should an Enterprise Capitalize?
2. How Should Enterprises Categorize Costs Capitalized into Property, Plant, and Equipment?
B. Subsequent Measurement
1. Basis of Measurement: Historical Cost Versus Current Value
2. Impairment
3. Depreciation Under the Historical Cost Basis
C. Derecognition
D. Non-Monetary Transactions
1. Classification of Non-Monetary Exchanges
2. Recognition of Non-Monetary Exchanges
E. Potential Earnings Management Using Property, Plant, and Equipment
1. Including Operating Expenses in PPE
2. Interest Capitalization
3. Depreciation Parameters
4. Opportunistic Disposals of PPE
F. Presentation and Disclosure of Property, Plant, and Equipment
G. Substantive Differences Between IFRS and ASPE
H. Summary
I. Answers to Checkpoint Questions
J. Glossary
K. References
L. Problems
M. Mini-Cases
Chapter 9: Intangible Assets, Goodwill, Mineral Resources, and Government Grants
A. Intangible Assets—Initial Recognition and Measurement
1. What Qualifies as an Intangible Asset?
2. What Amounts Should an Enterprise Capitalize as Intangible Assets?
B. Intangible Assets—Subsequent Measurement
1. Intangible Assets with Indefinite Useful Lives
2. Intangible Assets with Finite Useful Lives
C. Intangible Assets—Derecognition
D. Goodwill
E. Presentation and Disclosure
F. Mineral Resources
1. Three Phases in Mineral Activities: Exploration, Development, and Extraction
2. Full Cost Alternative Under ASPE
3. Other Aspects of Accounting for Mineral Exploration Costs
4. Example to Illustrate the Accounting for Mineral Resources
G. Government Grants
1. How Should Enterprises Recognize Government Grants—As Equity Capital or Income?
2. When Should Enterprises Recognize Government Grants?
3. How Should Enterprises Present Government Grants?
4. Repayment of Government Grants
H. Potential Earnings Management
1. Capitalization of Development Costs
2. Estimated Useful Lives of Intangible Assets
3. Determination of Exploration Success or Failure
I. Substantive Differences Between IFRS and ASPE
J. Summary
K. Answers to Checkpoint Questions
L. Glossary
M. References
N. Problems
O. Mini-Cases
Chapter 10: Applications of Fair Value to Non-Current Assets
A. Revaluation Model of Measuring Carrying Values Subsequent to Initial Acquisition
1. Adjusting Asset Values for Revaluation
2. Accounting for the Effect of Revaluation on Equity
3. Adjusting Depreciation in Periods Subsequent to Revaluation
B. Impairment
1. Preliminary Steps: What to Test for Impairment
2. Impairment Test
3. Recognition of Impairment
4. Differences Between Impairment and Revaluation
5. Impairment Standards in ASPE
6. Economic Roles of Impairments
C. Investment Property
1. Definition of Investment Property and Scope of IAS 40
2. Subsequent Measurement
3. Transfers Into and Out of Investment Property
D. Agriculture
1. Definition of Agricultural Activity and Scope of IAS 41
2. Accounting for Biological Assets and Agricultural Produce
E. Non-Current Assets Held for Sale and Discontinued Operations
F. A Practical Illustration: Canadian Tire Corporation
G. Substantive Differences Between IFRS and ASPE
H. Summary
I. Answers to Checkpoint Questions
J. Glossary
K. References
L. Problems
M. Mini-Cases
Appendix A: Statement of Cash Flows
Appendix B: Time Value of Money and Simple Valuation Techniques
Appendix C: Case Solving and Comprehensive Cases
Appendix D: Canadian Tire Corporation 2016 Consolidated Financial Statements
Glossary
Index
Back Cover
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