Financial Accounting with International Financial Reporting Standards

An essential and intuitive treatment of financial accounting with an international perspective

The use of International Financial Reporting Standards is growing rapidly, both outside of the United States and within, especially as IFRS incorporates more US GAAP rules. In the newly updated fifth edition of Financial Accounting with International Financial Reporting Standards, a team of accomplished financial practitioners and educators delivers the newest version of their highly anticipated text. This important work offers practical end-of-chapter exercises and practice problems complete with foreign currency examples, as well as an emphasis on non-US companies and examples. It is perfect for accounting students seeking exposure to internationally utilized accounting standards.

Contenu

1 Accounting in Action 1-1

Knowing the Numbers 1-1

1.1 Accounting Activities and Users 1-3

Who Uses Accounting Data 1-4

Data Analytics 1-5

1.2 The Building Blocks of Accounting 1-7

Ethics in Financial Reporting 1-7

Accounting Standards 1-8

Measurement Principles 1-9

Assumptions 1-9

1.3 The Accounting Equation 1-12

Assets 1-12

Liabilities 1-13

Equity 1-13

1.4 Analyzing Business Transactions 1-14

Accounting Transactions 1-15

Transaction Analysis 1-16

Summary of Transactions 1-21

1.5 Financial Statements 1-22

Income Statement 1-24

Retained Earnings Statement 1-24

Statement of Financial Position 1-24

Statement of Cash Flows 1-25

Comprehensive Income Statement 1-25

Appendix 1A: Career Opportunities in Accounting 1-27

Public Accounting 1-27

Private Accounting 1-28

Governmental Accounting 1-28

Forensic Accounting 1-28

A Look at U.S. GAAP 1-48

2 The Recording Process 2-1

Accidents Happen: Bank of Taiwan 2-1

2.1 Accounts, Debits, and Credits 2-2

The Account 2-2

Debits and Credits 2-3

Equity Relationships 2-7

Summary of Debit/Credit Rules 2-7

2.2 The Journal 2-8

The Recording Process 2-8

The Journal 2-9

2.3 The Ledger and Posting 2-11

The Ledger 2-11

Posting 2-13

Chart of Accounts 2-14

The Recording Process Illustrated 2-14

Summary Illustration of Journalizing and Posting 2-20

2.4 The Trial Balance 2-22

Limitations of a Trial Balance 2-23

Locating Errors 2-23

Currency Signs and Underlining 2-23

A Look at U.S. GAAP 2-47

3 Adjusting the Accounts 3-1

What Was Your Profit? 3-1

3.1 Accrual-Basis Accounting and Adjusting Entries 3-2

Fiscal and Calendar Years 3-3

Accrual- versus Cash-Basis Accounting 3-3

Recognizing Revenues and Expenses 3-3

The Need for Adjusting Entries 3-6

Types of Adjusting Entries 3-6

3.2 Adjusting Entries for Deferrals 3-7

Prepaid Expenses 3-7

Unearned Revenues 3-11

3.3 Adjusting Entries for Accruals 3-14

Accrued Revenues 3-14

Accrued Expenses 3-16

Summary of Basic Relationships 3-19

3.4 Adjusted Trial Balance and Financial Statements 3-22

Preparing the Adjusted Trial Balance 3-23

Preparing Financial Statements 3-23

Appendix 3A: Alternative Treatment of Deferrals 3-26

Prepaid Expenses 3-27

Unearned Revenues 3-28

Summary of Additional Adjustment Relationships 3-29

Appendix 3B: Financial Reporting Concepts 3-30

Qualities of Useful Information 3-30

Assumptions in Financial Reporting 3-31

Principles in Financial Reporting 3-31

Cost Constraint 3-32

A Look at U.S. GAAP 3-58

4 Completing the Accounting Cycle 4-1

Speaking the Same Language: IASB 4-1

4.1 The Worksheet 4-3

Steps in Preparing a Worksheet 4-3

Preparing Financial Statements from a Worksheet 4-11

Preparing Adjusting Entries from a Worksheet 4-12

4.2 Closing the Books 4-13

Preparing Closing Entries 4-13

Posting Closing Entries 4-15

Preparing a Post-Closing Trial Balance 4-17

4.3 The Accounting Cycle and Correcting Entries 4-20

Summary of the Accounting Cycle 4-20

Reversing Entries-An Optional Step 4-20

Correcting Entries-An Avoidable Step 4-20

4.4 Classified Statement of Financial Position 4-24

Intangible Assets 4-25

Property, Plant, and Equipment 4-26

Long-Term Investments 4-26

Current Assets 4-26

Equity 4-27

Non-Current Liabilities 4-27

Current Liabilities 4-28

Appendix 4A: Reversing Entries 4-30

Reversing Entries Example 4-30

A Look at U.S. GAAP 4-59

5 Accounting for Merchandise Operations 5-1

Who Doesn't Shop?: Carrefour 5-1

5.1 Merchandising Operations and Inventory Systems 5-3

Operating Cycles 5-3

Flow of Costs 5-4

5.2 Recording Purchases Under a Perpetual System 5-7

Freight Costs 5-8

Purchase Returns and Allowances 5-9

Purchase Discounts 5-10

Summary of Purchasing Transactions 5-11

5.3 Recording Sales Under a Perpetual System 5-11

Sales Returns and Allowances 5-13

Sales Discounts 5-14

Data Analytics and Credit Sales 5-15

5.4 The Accounting Cycle for a Merchandising Company 5-16

Adjusting Entries 5-16

Closing Entries 5-17

Summary of Merchandising Entries 5-17

5.5 Financial Statements for a Merchandiser 5-19

Income Statement 5-19

Classified Statement of Financial Position 5-23

Appendix 5A: Worksheet for a Merchandising Company 5-25

Using a Worksheet 5-25

Appendix 5B: Periodic Inventory System 5-26

Determining Cost of Goods Sold Under a Periodic System 5-27

Recording Merchandise Transactions 5-28

Recording Purchases of Merchandise 5-28

Recording Sales of Merchandise 5-29

Journalizing and Posting Closing Entries 5-29

Using a Worksheet 5-31

Appendix 5C: Adjusting Entries for Credit Sales with Returns and Allowances 5-33

Data Analytics in Action 5-54

A Look at U.S. GAAP 5-58

6 Inventories 6-1

"Where Is That Spare Bulldozer Blade?":

Komatsu 6-1

6.1 Classifying and Determining Inventory 6-2

Classifying Inventory 6-2

Determining Inventory Quantities 6-4

6.2 Inventory Methods and Financial Effects 6-7

Specific Identification 6-7

Cost Flow Assumptions 6-8

Financial Statement and Tax Effects of Cost Flow Methods 6-11

Using Inventory Cost Flow Methods Consistently 6-13

6.3 Effects of Inventory Errors 6-14

Income Statement Effects 6-14

Statement of Financial Position Effects 6-15

6.4 Inventory Statement Presentation and Analysis 6-16

Presentation 6-16

Lower of Cost or Net Realizable Value 6-16

Financial Analysis and Data Analytics 6-17

Appendix 6A: Inventory Cost Flow Methods in Perpetual Inventory Systems 6-21

First-In, First-Out (FIFO) 6-21

Average-Cost 6-22

Appendix 6B: Estimating Inventories 6-23

Gross Profit Method 6-23

Retail Inventory Method 6-24

Appendix 6C: LIFO Inventory Method 6-25

Data Analytics in Action 6-47

A Look at U.S. GAAP 6-50

7 Fraud, Internal Control, and Cash 7-1

Minding the Money at Nick's: Nick's Steakhouse and Pizza 7-1

7.1 Fraud and Internal Control 7-2

Fraud 7-3

Internal Control 7-3

Principles of Internal Control Activities 7-4

Data Analytics and Internal Controls 7-10

Limitations of Internal Control 7-10

7.2 Cash Controls 7-11

Cash Receipts Controls 7-11

Cash Disbursements Controls 7-14

Petty Cash Fund 7-16

7.3 Control Features of a Bank Account 7-19

Making Bank Deposits 7-19

Writing Checks 7-20

Electronic Banking 7-21

Bank Statements 7-21

Reconciling the Bank Account 7-22

7.4 Reporting Cash 7-27

Cash Equivalents 7-27

Restricted Cash 7-28

Data Analytics in Action 7-46

A Look at U.S. GAAP 7-49

Appendix 9A: Exchange of Plant Assets 9-26

Loss Treatment 9-27

Gain Treatment 9-27

Data Analytics in Action 9-47

A Look at U.S. GAAP 9-50

8 Accounting for Receivables 8-1

Are You Going to Pay Me-or Not?: BNP Paribas 8-1

8.1 Recognition of Accounts Receivable 8-2

Types of Receivables 8-3

Recognizing Accounts Receivable 8-3

8.2 Valuation and Disposition of Accounts Receiva…