Fundamentals of advanced accounting / Joe B. Hoyle, Thomas F. Schaefer, Timothy S. Doupnik.

Includes index.

Machine generated contents note: chapter One The Equity Method of Accounting for Investments -- The Reporting of Investments in Corporate Equity Securities -- Fair-Value Method -- Consolidation of Financial Statements -- Equity Method -- Discussion Question: Did the Cost Method Invite Earnings Manipulation? -- International Accounting Standard 28 -- Investments in Associates -- Application of the Equity Method -- Criteria for Utilizing the Equity Method -- Accounting for an Investment -- The Equity Method -- Equity Method Accounting Procedures -- Excess of Investment Cost Over Book Value Acquired -- Discussion Question: Does the Equity Method Really Apply Here? -- The Amortization Process -- Equity Method -- Additional Issues -- Reporting a Change to the Equity Method -- Reporting Investee Income from Sources Other Than Continuing Operations -- Reporting Investee Losses -- Reporting the Sale of an Equity Investment -- Deferral of Unrealized Profits in Inventory -- Downstream Sales of Inventory -- Upstream Sales of Inventory -- Financial Reporting Effects and Equity Method Criticisms -- Equity Method Reporting Effects -- Criticisms of the Equity Method -- Fair-Value Reporting Option for Equity Method Investments -- Discussion Question: Should Investor-Investee Relations Determine Investor Accounting for Investee? -- Summary -- chapter Two Consolidation of Financial Information -- Expansion through Corporate Takeovers -- Reasons for Firms to Combine -- United Airlines and Continental Airlines -- Merck and Schering-Plough -- Nike and Umbro -- The Consolidation Process -- Business Combinations -- Creating a Single Economic Entity -- Control -- An Elusive Quality -- Consolidation of Financial Information -- Financial Reporting for Business Combinations -- The Acquisition Method -- Consideration Transferred for the Acquired Business -- Assets Acquired and Liabilities Assumed -- Goodwill, and Gains on Bargain Purchases -- Procedures for Consolidating Financial Information -- Acquisition Method When Dissolution Takes Place -- Related Costs of Business Combinations -- The Acquisition Method When Separate Incorporation Is Maintained -- Acquisition-Date Fair-Value Allocations -- Additional Issues -- Intangibles -- Preexisting Goodwill on Subsidiary's Books -- Acquired In-Process Research and Development -- Convergence between U.S. and International Accounting Standards -- Summary -- Appendix: Legacy Methods of Accounting for Business Combinations -- chapter Three Consolidations -- Subsequent to the Date of Acquisition -- Consolidation -- The Effects Created by the Passage of Time -- Investment Accounting by the Acquiring Company -- Internal Investment Accounting Alternatives -- The Equity Method, Initial Value Method, and Partial Equity Method -- Subsequent Consolidation -- Investment Recorded by the Equity Method -- Acquisition Made during the Current Year -- Determination of Consolidated Totals -- Consolidation Worksheet -- Consolidation Subsequent to Year of Acquisition -- Equity Method -- Subsequent Consolidations -- Investment Recorded Using Initial Value or Partial Equity Method -- Acquisition Made during the Current Year -- Consolidation Subsequent to Year of Acquisition -- Initial Value and Partial Equity Methods -- Goodwill Impairment -- Discussion Question: How Does a Company Really Decide Which Investment Method to Apply? -- Assigning Goodwill to Reporting Units -- Qualitative Assessment Option -- Testing Goodwill for Impairment -- Steps 1 and 2 -- Illustration -- Accounting and Reporting for a Goodwill Impairment Loss -- Reporting Units with Zero or Negative Carrying Amounts -- Comparisons with International Accounting Standards -- Goodwill Allocation -- Impairment Testing -- Determination of the Impairment Loss -- Amortization and Impairment of Other Intangibles -- Contingent Consideration -- Accounting for Contingent Consideration in Business Combinations -- Push-Down Accounting -- External Reporting -- Internal Reporting -- Summary -- chapter Four Consolidated Financial Statements and Outside Ownership -- Consolidated Financial Reporting in the Presence of a Noncontrolling Interest -- Subsidiary Acquisition-Date Fair Value in the Presence of a Noncontrolling Interest -- Allocating the Subsidiary's Net Income to the Parent and Noncontrolling Interests -- Partial Ownership Consolidations (Acquisition Method) -- Discussion Question -- Consolidated Financial Statement Presentations of Noncontrolling Interest -- Alternative Fair-Value Specification -- Evidence of a Control Premium -- Effects Created by Alternative Investment Methods -- Revenue and Expense Reporting for Midyear Acquisitions -- Consolidating Postacquisition Subsidiary Revenue and Expenses -- Acquisition Following an Equity Method Investment -- Step Acquisitions -- Control Achieved in Steps -- Acquisition Method -- Example: Step Acquisition Resulting in Control -- Acquisition Method -- Worksheet Consolidation for a Step Acquisition (Acquisition Method) -- Example: Step Acquisition Resulting After Control Is Obtained -- Parent Company Sales of Subsidiary Stock -- Acquisition Method -- Cost-Flow Assumptions -- Accounting for Shares That Remain -- Comparisons with International Accounting Standards -- Summary -- chapter Five Consolidated Financial Statements -- Intra-Entity Asset Transactions -- Intra-Entity Inventory Transactions -- The Sales and Purchases Accounts -- Unrealized Gross Profit -- Year of Transfer (Year 1) -- Discussion Question: Earnings Management -- Unrealized Gross Profit -- Year Following Transfer (Year 2) -- Unrealized Gross Profit -- Effect on Noncontrolling Interest -- Intra-Entity Inventory Transfers Summarized -- Intra-Entity Inventory Transfers Illustrated: Parent Uses Equity Method -- Effects of Alternative Investment Methods on Consolidation -- Discussion Question: What Price Should We Charge Ourselves? -- Intra-Entity Land Transfers -- Accounting for Land Transactions -- Eliminating Unrealized Gains -- Land Transfers -- Recognizing the Effect on Noncontrolling Interest -- Land Transfers -- Intra-Entity Transfer of Depreciable Assets -- Deferral of Unrealized Gains -- Depreciable Asset Transfers Illustrated -- Depreciable Intra-Entity Asset Transfers -- Downstream Transfers When the Parent Uses the Equity Method -- Effect on Noncontrolling Interest -- Depreciable Asset Transfers -- Summary -- chapter Six Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues -- Consolidation of Variable Interest Entities -- What Is a VIE? -- Consolidation of Variable Interest Entities -- Procedures to Consolidate Variable Interest Entities -- Consolidation of a VIE Illustrated -- Other Variable Interest Entity Disclosure Requirements -- Proposed Accounting Standards Update on Variable Interest Entities -- Comparisons with International Accounting Standards -- Intra-Entity Debt Transactions -- Acquisition of Affiliate's Debt from an Outside Party -- Accounting for Intra-Entity Debt Transactions -- Individual Financial Records -- Effects on Consolidation Process -- Assignment of Retirement Gain or Loss -- Intra-Entity Debt Transactions -- Subsequent to Year of Acquisition -- Discussion Question: Who Lost This $300,000? -- Subsidiary Preferred Stock -- Consolidated Statement of Cash Flows -- Acquisition Period Statement of Cash Flows -- Statement of Cash Flows in Periods Subsequent to Acquisition -- Consolidated Earnings per Share -- Subsidiary Stock Transactions -- Changes in Subsidiary Value -- Stock Transactions -- Subsidiary Stock Transactions -- Illustrated -- Summary -- chapter Seven Foreign Currency Transactions and Hedging Foreign Exchange Risk -- Foreign Exchange Markets -- Exchange Rate Mechanisms -- Foreign Exchange Rates -- Spot and Forward Rates -- Option Contracts -- Foreign Currency Transactions -- Accounting Issue -- Accounting Alternatives -- Balance Sheet Date before Date of Payment -- Hedges of Foreign Exchange Risk -- Derivatives Accounting -- Fundamental Requirement of Derivatives Accounting -- Determination of Fair Value of Derivatives -- Accounting for Changes in the Fair Value of Derivatives -- Hedge Accounting -- Nature of the Hedged Risk -- Hedge Effectiveness -- Hedge Documentation -- Hedging Combinations -- Hedges of

Foreign Currency Denominated Assets and Liabilities -- Cash Flow Hedge -- Fair Value Hedge -- Forward Contract Used to Hedge a Foreign Currency Denominated Asset -- Forward Contract Designated as Cash Flow Hedge -- Forward Contract Designated as Fair Value Hedge -- Discussion Question: Do We Have a Gain or What? -- Cash Flow Hedge versus Fair Value Hedge -- Foreign Currency Option Used to Hedge a Foreign Currency Denominated Asset -- Option Designated as Cash Flow Hedge -- Option Designated as Fair Value Hedge -- Hedges of Unrecognized Foreign Currency Firm Commitments -- Forward Contract Used as Fair Value Hedge of a Firm Commitment -- Option Used as Fair Value Hedge of Firm Commitment -- Hedge of Forecasted Foreign Currency Denominated Transaction -- Forward Contract Cash Flow Hedge of a Forecasted Transaction -- Option Designated as a Cash Flow Hedge of a Forecasted Transaction -- Use of Hedging Instruments -- The Euro -- Foreign Currency Borrowing -- Foreign Currency Loan -- IFRS -- Foreign Currency Transactions and Hedges -- Summary -- chapter Eight Translation of Foreign Currency Financial Statements -- Exchange Rates Used in Translation -- Discussion Question: How Do We Report This? -- Translation Adjustments -- Balance Sheet Exposure -- Translation Methods -- Current Rate Method -- Temporal Method

Note continued: Translation of Retained Earnings -- Complicating Aspects of the Temporal Method -- Calculation of Cost of Goods Sold -- Application of the Lower-of-Cost-or-Market Rule -- Fixed Assets, Depreciation, and Accumulated Depreciation -- Gain or Loss on the Sale of an Asset -- Treatment of Translation Adjustment -- U.S. Rules -- Two Translation Combinations -- Highly Inflationary Economies -- Appropriate Exchange Rate -- The Process Illustrated -- Translation of Financial Statements -- Current Rate Method -- Translation of the Balance Sheet -- Translation of the Statement of Cash Flows -- Remeasurement of Financial Statements -- Temporal Method -- Remeasurement of the Income Statement -- Remeasurement of the Statement of Cash Flows -- Nonlocal Currency Balances -- Comparison of the Results from Applying the Two Different Methods -- Underlying Valuation Method -- Underlying Relationships -- Hedging Balance Sheet Exposure -- Disclosures Related to Translation -- Consolidation of a Foreign Subsidiary -- Translation of Foreign Subsidiary Trial Balance -- Determination of Balance in Investment Account -- Equity Method -- Consolidation Worksheet -- IFRS -- Translation of Foreign Currency Financial Statements -- Summary -- chapter Nine Partnerships: Formation and Operation -- Partnerships -- Advantages and Disadvantages -- Alternative Legal Forms -- Subchapter S Corporation -- Limited Partnerships (LPs) -- Limited Liability Partnerships (LLPs) -- Limited Liability Companies (LLCs) -- Partnership Accounting -- Capital Accounts -- Articles of Partnership -- Discussion Question: What Kind of Business Is This? -- Accounting for Capital Contributions -- Additional Capital Contributions and Withdrawals -- Discussion Question: How Will the Profits Be Split? -- Allocation of Income -- Accounting for Partnership Dissolution -- Dissolution -- Admission of a New Partner -- Dissolution -- Withdrawal of a Partner -- Summary -- chapter Ten Partnerships: Termination and Liquidation -- Termination and Liquidation -- Protecting the Interests of All Parties -- Termination and Liquidation Procedures Illustrated -- Schedule of Liquidation -- Deficit Capital Balance -- Contribution by Partner -- Deficit Capital Balance -- Loss to Remaining Partners -- Discussion Question: What Happens If a Partner Becomes Insolvent? -- Preliminary Distribution of Partnership Assets -- Predistribution Plan -- Summary -- chapter Eleven Accounting for State and Local Governments (Part 1) -- Introduction to the Accounting for State and Local Governments -- Governmental Accounting -- User Needs -- Two Sets of Financial Statements -- The Need for Two Sets of Financial Statements -- Internal Record-Keeping -- Fund Accounting -- Fund Accounting Classifications -- Overview of State and Local Government Financial Statements -- Government-Wide Financial Statements -- Fund Financial Statements -- Accounting for Governmental Funds -- The Importance of Budgets and the Recording of Budgetary Entries -- Encumbrances -- Recognition of Expenditures for Operations and Capital Additions -- Discussion Question: Is It an Asset or a Liability? -- Recognition of Revenues -- Overview -- Derived Tax Revenues Such as Income Taxes and Sales Taxes -- Imposed Nonexchange Revenues Such as Property Taxes and Fines -- Government-Mandated Nonexchange Transactions and Voluntary Nonexchange Transactions -- Issuance of Bonds -- Special Assessments -- Interfund Transactions -- Summary -- chapter Twelve Accounting for State and Local Governments (Part 2) -- Capital Leases -- Leases -- Government-Wide Financial Statements -- Leases -- Fund Financial Statements -- Solid Waste Landfill -- Landfills -- Government-Wide Financial Statements -- Landfills -- Fund Financial Statements -- Compensated Absences -- Works of Art and Historical Treasures -- Infrastructure Assets and Depreciation -- Expanded Financial Reporting -- The Primary Government and Component Units -- Primary Government -- Component Units -- Discussion Question: Is It Part of the County? -- Special Purpose Governments -- Government-Wide and Fund Financial Statements Illustrated -- Statement of Net Assets -- Government-Wide Financial Statements -- Statement of Activities -- Government-Wide Financial Statements -- Balance Sheet -- Governmental Funds -- Fund Financial Statements -- Statement of Revenues, Expenditures, and Changes in Fund Balances -- Governmental Funds -- Fund Statements -- Statement of Net Assets -- Proprietary Funds -- Fund Statements -- Statement of Revenues, Expenses, and Changes in Fund Net Assets -- Proprietary Funds -- Fund Statements -- Statement of Cash Flows -- Proprietary Funds -- Fund Statements -- Reporting Public Colleges and Universities -- Summary.