Description
Intermediate Accounting 8th Edition by J. David Spiceland EBOOK PDF Instant Download
Table of Contents
Intermediate Accounting
About the Authors
What Stands Out in the Eighth Edition?
What Keeps SPICELAND Users Coming Back?
Easy to Use. Proven Effective.
What’s New in the Eighth Edition?
Acknowledgments
We Are Grateful
Contents in Brief
Contents
1 The Role of Accounting as an Information System
CHAPTER 1 Environment and Theoretical Structure of Financial Accounting
Part A: Financial Accounting Environment
The Economic Environment and Financial Reporting
The Investment-Credit DecisionÑA Cash Flow Perspective
Cash versus Accrual Accounting
The Development of Financial Accounting and Reporting Standards
Historical Perspective and Standards
The Standard-Setting Process
Encouraging High-Quality Financial Reporting
The Role of the Auditor
Financial Reporting Reform
A Move Away from Rules-Based Standards?
Ethics in Accounting
Part B: The Conceptual Framework
Objective of Financial Reporting
Qualitative Characteristics of Financial Reporting Information
Fundamental Qualitative Characteristics
Enhancing Qualitative Characteristics
Key Constraint: Cost Effectiveness
Elements of Financial Statements
Underlying Assumptions
Economic Entity Assumption
Going Concern Assumption
Periodicity Assumption
Monetary Unit Assumption
Recognition, Measurement, and Disclosure Concepts
Recognition
Measurement
Disclosure
Evolving GAAP
CHAPTER 2 Review of the Accounting Process
The Basic Model
The Accounting Equation
Account Relationships
The Accounting Processing Cycle
Concept Review Exercise: Journal Entries for External Transactions
Adjusting Entries
Prepayments
Accruals
Estimates
Concept Review Exercise: Adjusting Entries
Preparing the Financial Statements
The Income Statement
The Statement of Comprehensive Income
The Balance Sheet
The Statement of Cash Flows
The Statement of ShareholdersÕ Equity
The Closing Process
Concept Review Exercise: Financial Statement Preparation and Closing
Conversion from Cash Basis to Accrual Basis
Appendix 2A: Use of a Worksheet
Appendix 2B: Reversing Entries
Appendix 2C: Subsidiary Ledgers and Special Journals
CHAPTER 3 The Balance Sheet and Financial Disclosures
Part A: The Balance Sheet
Usefulness and Limitations
Classification of Elements
Assets
Liabilities
ShareholdersÕ Equity
Concept Review Exercise: Balance Sheet Classification
Part B: Financial Disclosures
Disclosure Notes
Summary of Significant Accounting Policies
Subsequent Events
Noteworthy Events and Transactions
Management Discussion and Analysis
ManagementÕs Responsibilities
AuditorsÕ Report
Compensation of Directors and Top Executives
Part C: Risk Analysis
Using Financial Statement Information
Liquidity Ratios
Financing Ratios
Appendix 3: Reporting Segment Information
CHAPTER 4 The Income Statement, Comprehensive Income, and the Statement of Cash Flows
Part A: The Income Statement and Comprehensive Income
Income from Continuing Operations
Revenues, Expenses, Gains, and Losses
Income Tax Expense
Operating versus Nonoperating Income
Income Statement Formats
Earnings Quality
Manipulating Income and Income Smoothing
Operating Income and Earnings Quality
Nonoperating Income and Earnings Quality
Discontinued Operations
What Constitutes an Operation?
Reporting Discontinued Operations
Accounting Changes
Change in Accounting Principle
Change in Depreciation, Amortization, or Depletion Method
Change in Accounting Estimate
Correction of Accounting Errors
Prior Period Adjustments
Earnings per Share Disclosures
Comprehensive Income
Other Comprehensive Income
Flexibility in Reporting
Accumulated Other Comprehensive Income
Concept Review Exercise: Income Statement Presentation; Comprehensive Income
Part B: The Statement of Cash Flows
Usefulness of the Statement of Cash Flows
Classifying Cash Flows
Operating Activities
Investing Activities
Financing Activities
Noncash Investing and Financing Activities
Concept Review Exercise: Statement of Cash Flows
Appendix 4: Interim Reporting
CHAPTER 5 Revenue Recognition and Profitability Analysis
Part A: Introduction to Revenue Recognition
Recognizing Revenue at a Single Point in Time
Recognizing Revenue over a Period of Time
Criteria for Recognizing Revenue over Time
Determining Progress toward Completion
Recognizing Revenue for Contracts that Contain Multiple Performance Obligations
Step 2: Identify the Performance Obligation(s)
Step 3: Determine the Transaction Price
Step 4: Allocate the Transaction Price to Each Performance Obligation
Step 5: Recognize Revenue When (Or As) Each Performance Obligation Is Satisfied
Concept Review Exercise: Revenue Recognition for Contracts with Multiple Performance Obligations
Part B: Special Topics in Revenue Recognition
Special Issues for Step 1: Identify the Contract
Special Issues for Step 2: Identify the Performance Obligation(s)
Special Issues for Step 3: Determine the Transaction Price
Special Issues for Step 4: Allocate the Transaction Price to the Performance Obligations
Special Issues for Step 5: Recognize Revenue When (Or As) Each Performance Obligation Is Satisfied
Disclosures
Part C: Accounting for Long-Term Contracts
Accounting for a Profitable Long-Term Contract
A Comparison of Revenue Recognized Over the Term of the Contract and at the Completion of Contract
Long-Term Contract Losses
Concept Review Exercise: Long-Term Construction Contracts
Part D: Profitability Analysis
Activity Ratios
Profitability Ratios
Profitability AnalysisÑAn Illustration
Revenue Recognition: GAAP in Effect Prior to ASU No. 2014-09
Concept Review Exercise: Installment Sales
CHAPTER 6 Time Value of Money Concepts
Part A: Basic Concepts
Time Value of Money
Simple versus Compound Interest
Valuing a Single Cash Flow Amount
Future Value of a Single Amount
Present Value of a Single Amount
Solving for Other Values When FV and PV are Known
Concept Review Exercise: Valuing a Single Cash Flow Amount
Preview of Accounting Applications of Present Value TechniquesÑSingle Cash Amount
Expected Cash Flow Approach
Part B: Basic Annuities
Future Value of an Annuity
Future Value of an Ordinary Annuity
Future Value of an Annuity Due
Present Value of an Annuity
Present Value of an Ordinary Annuity
Present Value of an Annuity Due
Present Value of a Deferred Annuity
Financial Calculators and Excel
Solving for Unknown Values in Present Value Situations
Concept Review Exercise: Annuities
Preview of Accounting Applications of Present Value TechniquesÑAnnuities
Valuation of Long-Term Bonds
Valuation of Long-Term Leases
Valuation of Pension Obligations
Summary of Time Value of Money Concepts
2 Economic Resources
CHAPTER 7 Cash and Receivables
Part A: Cash and Cash Equivalents
Internal Control
Internal Control ProceduresÑCash Receipts
Internal Control ProceduresÑCash Disbursements
Restricted Cash and Compensating Balances
Decision MakersÕ Perspective
Part B: Current Receivables
Accounts Receivable
Initial Valuation of Accounts Receivable
Subsequent Valuation of Accounts Receivable
Concept Review Exercise: Uncollectible Accounts Receivable
Notes Receivable
Interest-Bearing Notes
Noninterest-Bearing Notes
Long-Term Notes Receivable
Subsequent Valuation of Notes Receivable
Financing with Receivables
Secured Borrowing
Sale of Receivables
Transfers of Notes Receivable
Deciding Whether to Account for a Transfer as a Sale or a Secured Borrowing
Disclosures
Concept Review Exercise: Financing with Receivables
Decision MakersÕ Perspective
Appendix 7A: Cash Controls
Appendix 7B: Accounting for Impairment of a Receivable and a Troubled Debt Restructuring
CHAPTER 8 Inventories: Measurement
Part A: Recording and Measuring Inventory
Types of Inventory
Merchandising Inventory
Manufacturing Inventories
Types of Inventory Systems
Perpetual Inventory System
Periodic Inventory System
A Comparison of the Perpetual and Periodic Inventory Systems
What is Included in Inventory?
Physical Quantities Included in Inventory
Expenditures Included in Inventory
Inventory Cost Flow Assumptions
Specific Identification
Average Cost
First-In, First-Out (FIFO)
Last-In, First-Out (LIFO)
Comparison of Cost Flow Methods
Decision MakersÕ PerspectiveÑFactors Influencing Method Choice
Concept Review Exercise: Inventory Cost Flow Methods
Decision MakersÕ Perspective
Part B: Methods of Simplifying LIFO
LIFO Inventory Pools
Dollar-Value LIFO
Advantages of DVL
Cost Indexes
The DVL Inventory Estimation Technique
Concept Review Exercise: Dollar-Value LIFO
CHAPTER 9 Inventories: Additional Issues
Part A: ReportingÑLower of Cost and Net Realizable Value
Determining Net Realizable Value
Applying Lower of Cost and Net Realizable Value
Adjusting Cost to Net Realizable Value
Concept Review Exercise: Lower of Cost and Net Realizable Value
Part B: Inventory Estimation Techniques
The Gross Profit Method
A Word of Caution
The Retail Inventory Method
Retail Terminology
Cost Flow Methods
Other Issues Pertaining to the Retail Method
Concept Review Exercise: Retail Inventory Method
Part C: Dollar-Value LIFO Retail
Concept Review Exercise: Dollar-Value LIFO Retail Method
Part D: Change in Inventory Method and Inventory Errors
Change in Inventory Method
Most Inventory Changes
Change to the LIFO Method
Inventory Errors
When the Inventory Error Is Discovered the Following Year
When the Inventory Error Is Discovered Two Years Later
Concept Review Exercise: Inventory Errors
Earnings Quality
Appendix 9: Purchase Commitments
CHAPTER 10 Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition
Part A: Valuation at Acquisition
Types of Assets
Costs to Be Capitalized
Property, Plant, and Equipment
Intangible Assets
Lump-Sum Purchases
Noncash Acquisitions
Deferred Payments
Issuance of Equity Securities
Donated Assets
Decision MakersÕ Perspective
Part B: Dispositions and Exchanges
Dispositions
Exchanges
Fair Value Not Determinable
Exchange Lacks Commercial Substance
Concept Review Exercise: Exchanges
Part C: Self-Constructed Assets and Research and Development
Self-Constructed Assets
Overhead Allocation
Interest Capitalization
Research and Development (R&D)
Determining R&D Costs
R&D Performed for Others
Start-Up Costs
Software Development Costs
Purchased Research and Development
Appendix 10: Oil and Gas Accounting
CHAPTER 11 Property, Plant, and Equipment and Intangible Assets: Utilization and Impairment
Part A: Depreciation, Depletion, andÊAmortization
Cost AllocationÑan Overview
Measuring Cost Allocation
Service Life
Allocation Base
Allocation Method
Depreciation
Time-Based Depreciation Methods
Activity-Based Depreciation Methods
Decision MakersÕ PerspectiveÑSelecting A Depreciation Method
Concept Review Exercise: Depreciation Methods
Group and Composite Depreciation Methods
Depletion of Natural Resources
Amortization of Intangible Assets
Intangible Assets Subject to Amortization
Intangible Assets Not Subject to Amortization
Concept Review Exercise: Depletion and Amortization
Part B: Additional Issues
Partial Periods
Changes in Estimates
Change in Depreciation, Amortization, or Depletion Method
Error Correction
Impairment of Value
Assets to Be Held and Used
Assets to Be Sold
Impairment Losses and Earnings Quality
Concept Review Exercise: Impairment
Part C: Subsequent Expenditures
Expenditures Subsequent to Acquisition
Repairs and Maintenance
Additions
Improvements
Rearrangements
Costs of Defending Intangible Rights
Appendix 11A: Comparison with Macrs (Tax Depreciation)
Appendix 11B: Retirement and Replacement Methods of Depreciation
3 Financial Instruments and Liabilities
CHAPTER 12 Investments
Part A: Investor Lacks Significant Influence
Securities to Be Held to Maturity
Trading Securities
Securities Available-for-Sale
Comparison of HTM, TS, and AFS Approaches
Transfers between Reporting Categories
Fair Value Option
Impairment of Investments
Concept Review Exercise: Various Investment Securities
Financial Statement Presentation and Disclosure
Part B: Investor Has Significant Influence
How the Equity Method Relates to Consolidated Financial Statements
What Is Significant Influence?
A Single Entity Concept
Further Adjustments
Reporting the Investment
What If Conditions Change?
If an Equity Method Investment Is Sold
Comparison of Fair Value and the Equity Method
Fair Value Option
Concept Review Exercise: The Equity Method
Decision MakersÕ Perspective
Financial Instruments and Investment Derivatives
Appendix 12A: Other Investments (Special Purpose Funds, Investments in Life Insurance Policies)
Appendix 12B: Impairment of Investments
CHAPTER 13 Current Liabilities and Contingencies
Part A: Current Liabilities
Characteristics of Liabilities
What Is a Current Liability?
Open Accounts and Notes
Accounts Payable and Trade Notes Payable
Short-Term Notes Payable
Commercial Paper
Accrued Liabilities
Accrued Interest Payable
Salaries, Commissions, and Bonuses
Liabilities from Advance Collections
Deposits and Advances from Customers
Gift Cards
Collections for Third Parties
A Closer Look at the Current and Noncurrent Classification
Current Maturities of Long-Term Debt
Obligations Callable by the Creditor
When Short-Term Obligations Are Expected to Be Refinanced
Concept Review Exercise: Current Liabilities
Part B: Contingencies
Loss Contingencies
Product Warranties and Guarantees
Litigation Claims
Subsequent Events
Unasserted Claims and Assessments
Gain Contingencies
Concept Review Exercise: Contingencies
Decision MakersÕ Perspective
Appendix 13: Payroll-Related Liabilities
CHAPTER 14 Bonds and Long-Term Notes
The Nature of Long-Term Debt
Part A: Bonds
The Bond Indenture
Recording Bonds at Issuance
Determining the Selling Price
Determining InterestÑEffective Interest Method
Zero-Coupon Bonds
Bonds Sold at a Premium
When Financial Statements Are Prepared between Interest Dates
The Straight-Line MethodÑA Practical Expediency
Concept Review Exercise: Issuing Bonds and Recording Interest
Debt Issue Costs
Part B: Long-Term Notes
Note Issued for Cash
Note Exchanged for Assets or Services
Installment Notes
Financial Statement Disclosures
Decision MakersÕ Perspective
Concept Review Exercise: Note with an Unrealistic Interest Rate
Part C: Debt Retired Early, Convertible Into Stock, or Providing an Option to Buy Stock
Early Extinguishment of Debt
Convertible Bonds
When the Conversion Option Is Exercised
Induced Conversion
Bonds with Detachable Warrants
Concept Review Exercise: Issuance and Early Extinguishment of Debt
Part D: Option to Report Liabilities at Fair Value
Determining Fair Value
Reporting Changes in Fair Value
Mix and Match
Appendix 14A: Bonds Issued Between Interest Dates
Appendix 14B: Troubled Debt Restructuring
CHAPTER 15 Leases
Part A: Accounting by the Lessor and Lessee
Decision MakersÕ PerspectiveÑAdvantages of Leasing
Capital Leases and Installment Notes Compared
Lease Classification
Classification Criteria
Additional Lessor Conditions
Operating Leases
Advance Payments
Leasehold Improvements
Capital LeasesÑLessee and Lessor
Depreciation
Accrued Interest
Concept Review Exercise: Direct Financing Lease
Sales-Type Leases
Part B: Bargain Purchase Options and Residual Value
Bargain Purchase Options
When a BPO Is Exercisable Before the End of the Lease Term
Residual Value
Effect on the Lessee of a Residual Value
Effect on the Lessor of a Residual Value
Part C: Other Lease Accounting Issues
Executory Costs
Discount Rate
When the LesseeÕs Incremental Borrowing Rate Is Less Than the LessorÕs Implicit Rate
When the LessorÕs Implicit Rate Is Unknown
LessorÕs Initial Direct Costs
Contingent Rentals
A Brief Summary
Lease Disclosures
Decision MakersÕ PerspectiveÑFinancial Statement Impact
Balance Sheet and Income Statement
Statement of Cash Flow Impact
Concept Review Exercise: Various Lease Accounting Issues
Part D: Special Leasing Arrangements
Sale-Leaseback Arrangements
Capital Leases
Operating Leases
Losses on Sale-Leasebacks
Real Estate Leases
Leases of Land Only
Leases of Land and Building
Leases of Only Part of a Building
Leases: Where WeÕre Headed, A Chapter Supplement
CHAPTER 16 Accounting for Income Taxes
Part A: Deferred Tax Assets and Deferred Tax Liabilities
Conceptual Underpinning
Temporary Differences
Deferred Tax Liabilities
Balance Sheet and Income Statement Perspectives
Types of Temporary Differences
Deferred Tax Assets
Valuation Allowance
Permanent Differences
Concept Review Exercise: Temporary and Permanent Differences
Part B: Other Tax Accounting Issues
Tax Rate Considerations
When Enacted Tax Rates Differ
Changes in Tax Laws or Rates
Multiple Temporary Differences
Net Operating Losses
Net Operating Loss Carryforward
Net Operating Loss Carryback
Financial Statement Presentation
Balance Sheet Classification
Disclosure Notes
Coping with Uncertainty in Income Taxes
Intraperiod Tax Allocation
Decision MakersÕ Perspective
Concept Review Exercise: Multiple Differences and Net Operating Loss
CHAPTER 17 Pensions and Other Postretirement Benefits
Part A: The Nature of Pension Plans
Defined Contribution Pension Plans
Defined Benefit Pension Plans
Pension ExpenseÑAn Overview
Part B: The Pension Obligation and Plan Assets
The Pension Obligation
Accumulated Benefit Obligation
Vested Benefit Obligation
Projected Benefit Obligation
Illustration Expanded to Consider the Entire Employee Pool
Pension Plan Assets
Reporting the Funded Status of the Pension Plan
Part C: Determining Pension Expense
The Relationship between Pension Expense and Changes in the PBO and Plan Assets
Components of Pension Expense
Income Smoothing
Part D: Reporting Issues
Recording Gains and Losses
Recording the Pension Expense
Recording the Funding of Plan Assets
Comprehensive Income
Income Tax Considerations
Putting the Pieces Together
Decision MakersÕ Perspective
Settlement or Curtailment of Pension Plans
Concept Review Exercise: Pension Plans
Part E: Postretirement Benefits Other Than Pensions
What Is a Postretirement Benefit Plan?
Postretirement Health Benefits and Pension Benefits Compared
Determining the Net Cost of Benefits
Postretirement Benefit Obligation
Measuring the Obligation
Attribution
Accounting for Postretirement Benefit Plans Other Than Pensions
A Comprehensive Illustration
Decision MakersÕ Perspective
Concept Review Exercise: Other Postretirement Benefits
Appendix 17: Service Method of Allocating Prior Service Cost
CHAPTER 18 ShareholdersÕ Equity
Part A: The Nature of ShareholdersÕ Equity
Financial Reporting Overview
Paid-in Capital
Retained Earnings
Treasury Stock
Accumulated Other Comprehensive Income
Reporting ShareholdersÕ Equity
The Corporate Organization
Limited Liability
Ease of Raising Capital
Disadvantages
Types of Corporations
Hybrid Organizations
The Model Business Corporation Act
Part B: Paid-In Capital
Fundamental Share Rights
Distinguishing Classes of Shares
Typical Rights of Preferred Shares
Is It Equity or Is It Debt?
The Concept of Par Value
Accounting for the Issuance of Shares
Shares Issued for Cash
Shares Issued for Noncash Consideration
More Than One Security Issued for a Single Price
Share Issue Costs
Concept Review Exercise: Expansion of Corporate Capital
Share Buybacks
Decision MakerÕs Perspective
Shares Formally Retired or Viewed as Treasury Stock
Accounting for Retired Shares
Accounting for Treasury Stock
Resale of Shares
Concept Review Exercise: Treasury Stock
Part C: Retained Earnings
Characteristics of Retained Earnings
Dividends
Liquidating Dividend
Retained Earnings Restrictions
Cash Dividends
Property Dividends
Stock Dividends and Splits
Stock Dividends
Stock Splits
Stock Splits Effected in the Form of Stock Dividends (Large Stock Dividends)
Decision MakerÕs Perspective
Concept Review Exercise: Changes in Retained Earnings
Appendix 18: Quasi Reorganizations
4 Additional Financial Reporting Issues
CHAPTER 19 Share-Based Compensation and Earnings Per Share
Part A: Share-Based Compensation
Restricted Stock Plans
Restricted Stock Awards
Restricted Stock Units
Stock Option Plans
ExpenseÑThe Great Debate
Recognizing the Fair Value of Options
When Options are Exercised
When Unexercised Options Expire
Plans with Graded Vesting
Plans with Performance or Market Conditions
Employee Share Purchase Plans
Decision MakersÕ Perspective
Concept Review Exercise: Share-Based Compensation Plans
Part B: Earnings Per Share
Basic Earnings Per Share
Issuance of New Shares
Stock Dividends and Stock Splits
Reacquired Shares
Earnings Available to Common Shareholders
Diluted Earnings Per Share
Potential Common Shares
Options, Rights, and Warrants
Convertible Securities
Antidilutive Securities
Options, Warrants, Rights
Convertible Securities
Order of Entry for Multiple Convertible Securities
Concept Review Exercise: Basic and Diluted EPS
Additional EPS Issues
Components of the ÒProceedsÓ in the Treasury Stock Method
Contingently Issuable Shares
Summary of the Effect of Potential Common Shares on Earnings Per Share
Actual Conversions
Financial Statement Presentation of Earnings Per Share Data
Decision MakersÕ Perspective
Concept Review Exercise: Additional EPS Issues
Appendix 19A: Option-Pricing Theory
Appendix 19B: Stock Appreciation Rights
CHAPTER 20 Accounting Changes and Error Corrections
Part A: Accounting Changes
Change in Accounting Principle
Decision MakersÕ PerspectiveÑMotivation for Accounting Choices
The Retrospective Approach: Most Changes in Accounting Principle
The Prospective Approach
Change in Accounting Estimate
Changing Depreciation, Amortization, and Depletion Methods
Change in Reporting Entity
Error Correction
Concept Review Exercise: Accounting Changes
Part B: Correction of Accounting Errors
Prior Period Adjustments
Error Correction Illustrated
Error Discovered in the Same Reporting Period That It Occurred
Error Affecting Previous Financial Statements, but Not Net Income
Error Affecting a Prior YearÕs Net Income
Concept Review Exercise: Correction of Errors
CHAPTER 21 The Statement of Cash Flows Revisited
Part A: The Content and Value of The Statement of Cash Flows
Decision MakersÕ PerspectiveÑUsefulness of Cash Flow Information
Cash Inflows and Outflows
Role of the Statement of Cash Flows
The Importance of Cash Flows in an Economic Decline
Cash and Cash Equivalents
Primary Elements of the Statement of Cash Flows
Preparation of the Statement of Cash Flows
Part B: Preparing the SCF: Direct Method of Reporting Cash Flows from Operating Activities
Using a Spreadsheet
Income Statement Accounts
Balance Sheet Accounts
Concept Review Exercise: Comprehensive Review
Part C: Preparing the SCF: Indirect Method of Reporting Cash Flows from Operating Activities
Getting There through the Back Door
Components of Net Income That Do Not Increase or Decrease Cash
Components of Net Income That Do Increase or Decrease Cash
Comparison with the Direct Method
Reconciliation of Net Income to Cash Flows from Operating Activities
Decision MakersÕ PerspectiveÑCash Flow Ratios
Appendix 21A: Spreadsheet for the Indirect Method
Appendix 21B: The T-Account Method of Preparing the Statement of Cash Flows
Appendix A: Derivatives
Appendix B: PetSmart Annual Report (selected pages)
Appendix C: IFRS Comprehensive Case
Glossary
Photo Credits
Index
Present and Future Value Table
