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• Digital Resources for Students
• Half Title
• Title Page
• Copyright
• Dedication
• About the Author
• Brief Contents
• Contents
• Financial Accounting, IFRS
• Preface
• Visual Walk-Through
• Digital Walk-Through
• Accounting Careers: Much More Than Counting Things
• Chapter 1. Conceptual Framework and Financial Statements
• Spotlight: Logitech www.logitech.com
• Understand the Role of Accounting in Communicating Financial Information
• Business Decisions
• Accounting Is the Language of Business
• Two Perspectives of Accounting: Financial Accounting and Management Accounting
• Organizing a Business
• Role of Accounting Standards
• Understand the Underlying Accounting Concepts in the IFRS Conceptual Framework
• The Conceptual Framework
• Why Is Financial Reporting Important?
• Who Are the Users of Financial Reports?
• What Makes Financial Information Useful?
• What Constraints Do We Face in Providing Useful Information?
• What Are Our Assumptions in Financial Reporting?
• What Exactly Are We Accounting For?
• Accounting Equations
• Obtain Insights into Business Operations Through Financial Statements
• The Income Statement Shows a Company’s Financial Performance
• The Statement of Changes in Equity Shows a Company’s Transactions with Its Owners
• The Balance Sheet Shows a Company’s Financial Position
• The Statement of Cash Flows Shows a Company’s Cash Receipts and Payments
• Identify Financial Statements and Their Interrelationships
• Understand the Role of Ethics in Accounting
• Code of Ethics for Professional Accountants
• End-of-Chapter Summary Problem
• Chapter 2. Recording Business Transactions
• Spotlight: Samsung Electronics www.samsung.com
• Explain What a Business Transaction Is
• Keep Track of Financial Statement Items
• Assets
• Liabilities
• Equity
• Analyze the Impact of Business Transactions on Accounts
• Example: RedLotus Security
• Transactions and Financial Statements
• Mid-Chapter Summary Problem
• Double-Entry Accounting
• The T-Account
• Increases and Decreases in the Accounts: The Rules of Debit and Credit
• Additional Shareholders’ Equity Accounts: Income and Expenses
• Record (Journalize and Post) Transactions in the Books
• Copying Information (Posting) from the Journal to the Ledger
• The Flow of Accounting Data
• Accounts After Posting to the Ledger
• Construct and Use a Trial Balance
• Analyzing Accounts
• Correcting Accounting Errors
• Chart of Accounts
• The Normal Balance of an Account
• Account Formats
• End-of-Chapter Summary Problem
• Chapter 3. Accrual Accounting
• Spotlight: Lululemon shop.lululemon.com
• Explain How Accrual Accounting Differs from Cash-Basis Accounting
• Accrual Accounting and Cash Flows
• The Time-Period Concept
• Apply the Revenue and Expense Recognition Principles
• The Revenue Recognition Principle
• The Expense Recognition Principle
• The Matching Concept
• Ethics in Business and Accounting Decisions
• Mid-Chapter Summary Problem
• Adjust the Accounts
• Which Accounts Need to Be Updated (Adjusted)?
• Categories of Adjusting Entries
• Prepaid Expenses
• Unearned Revenues
• Accrued Expenses
• Accrued Revenues
• Depreciation of Property, Plant, and Equipment
• Summary of the Adjusting Process
• The Adjusted Trial Balance
• Prepare Updated Financial Statements
• Close the Books
• End-of-Chapter Summary Problem
• Chapter 4. Presentation of Financial Statements
• Spotlight: Lenovo www.lenovo.com
• Appreciate the Role of Annual Reports as a Communication Tool
• Substance over Style
• Obtaining Annual Reports
• Typical Structure of an Annual Report
• Corporate Information
• Analysis and Commentaries
• Other Statements and Disclosures
• Financial Statements
• Recognize the General Presentation Requirements of Financial Statements
• Complete Set of Financial Statements
• Fair Presentation and Compliance with IFRS
• Going Concern
• Accrual Basis of Accounting
• Materiality and Aggregation
• Offsetting
• Frequency of Reporting
• Comparative Information
• Consistency of Presentation
• Notes to the Accounts
• Mid-Chapter Summary Problem
• Understand the Presentation Requirements for Statement of Financial Position
• Understand Presentation Requirements for Statement of Comprehensive Income
• Understand Presentation Requirements for Statement of Changes in Equity
• End-of-Chapter Summary Problem
• Chapter 5. Internal Control, Cash, and Receivables
• Spotlight: LEGO www.lego.com
• Describe Fraud and Its Impact
• Fraud and Its Impact
• Ethics in Business and Accounting Decisions
• Understand the Role of Internal Controls and Corporate Govern
• Internal Control
• The Sarbanes-Oxley Act (SOX) and Other Jurisdictions
• Internal Control Procedures
• The Limitations of Internal Control—Costs and Benefits
• Apply Internal Controls over Cash Receipts and Cash Payments
• Internal Control over Cash Receipts
• Internal Control over Cash Payments
• Using a Budget to Manage Cash
• Prepare and Use a Bank Reconciliation
• Preparing the Bank Reconciliation
• Online Banking
• Report Cash on the Balance Sheet
• Mid-Chapter Summary Problem
• Account for Receivables and Its Potential Impairment
• Types of Receivables
• Internal Controls over Cash Collections on Account
• How Do We Manage the Risk of Not Collecting?
• Accounting for Expected Credit Losses on Accounts Receivable
• Computing Cash Collections from Customers
• Accounting for Notes Receivable
• How to Speed Up Cash Flow
• End-of-Chapter Summary Problem
• Chapter 6. Inventory and Merchandising Operations
• Spotlight: Fast Retailing www.fastretailing.com
• Understand the Nature of Inventory and Retailing Operations
• Sale Price versus Cost of Inventory
• Basic Inventory Relationship
• Record Inventory-Related Transactions
• Inventory Systems
• Recording Transactions in the Perpetual System
• Understand and Apply Different Inventory Cost Assumptions
• Effects of FIFO, LIFO, and Average Cost on Cost of Goods Sold, Gross Profit, and Ending Inventory
• Comparison of the Inventory Methods
• Mid-Chapter Summary Problem
• Other Inventory Issues
• Analyze Effects of Inventory Errors
• Estimate Inventory by the Gross Profit Method
• Analyzing Financial Statements
• End-of-Chapter Summary Problem
• Chapter 7. PPE and Intangibles
• Spotlight: Airbus SE Group www.airbus.com
• Understand the Different Types of Noncurrent Assets
• Property, Plant, and Equipment (PPE)
• Intangible Assets
• Other Noncurrent Assets
• Determine the Cost of PPE on Initial Recognition
• Recognition of PPE and Intangible Assets
• Measurement of PPE on Initial Recognition
• Land and Land Improvements
• Buildings, Machinery, and Equipment
• Lump-Sum (or Basket) Purchases of Assets
• Understand When to Capitalize or Expense Subsequent Costs
• Subsequent Costs
• Measure and Record Depreciation
• How to Allocate Depreciation
• Depreciation Methods
• Comparing Depreciation Methods
• Choosing a Depreciation Method
• Mid-Chapter Summary Problem
• Other Issues in Accounting for PPE
• Depreciation for Tax Purposes
• Depreciation for Partial Years
• Changes in Estimates of Useful Lives or Residual Values
• Impairment of PPE
• Measurement Subsequent to Initial Recognition
• Using Fully Depreciated Assets
• Accounting for Natural Resources
• Account for PPE Disposals
• Understand the Recognition and Subsequent Measurement of Intangible Assets
• Accounting for Specific Intangibles
• Accounting for Research and Development Costs
• Accounting for the Impairment of an Intangible Asset
• Report Noncurrent Assets Transactions on the Statement of Cash Flows
• End-of-Chapter Summary Problem
• Chapter 8: Investments
• Spotlight: Vivendi www.vivendi.com
• Explain Why Entities Investand What They Invest In
• Account for Debt Investments Under IFRS 9
• Accounting for Debt Investments at AC
• Accounting for Debt Investments at FVOCI
• Accounting for Debt Investments at FVPL
• Account for Equity Investments Under IFRS 9
• Accounting for Equity Investments at FVPL
• Accounting for Equity Investments at FVOCI
• Mid-Chapter Summary Problem
• Account for Investments in Equity Securities When the Investor Has Significant Influence
• Account for Investments in Equity Securities When the Investor Has Controlling Influence
• Consolidation Accounting
• The Consolidated Balance Sheet and the Related Worksheet
• Goodwill and Noncontrolling Interest
• Income of a Consolidated Entity
• Report Investments in Securities on the Financial Statements
• Reporting Investments in Securities on the Balance Sheet
• Reporting of Cash Flows Relating to Investment in Securities on the Statement of Cash Flows
• End-of-Chapter Summary Problem
• Chapter 9. Liabilities
• Spotlight: Jardine Matheson www.jardines.com
• Understand the Various Types of Liabilities and Their Accounting Effects
• Account for Contingent Liabilities
• What Are Contingent Liabilities and How Are They Accounted?
• Are All Liabilities Reported on the Balance Sheet?
• Mid-Chapter Summary Problem
• Account for Bond Payables
• Bonds: An Introduction
• Accounting for Bonds Payable at Par (Face Value)
• Accounting for Bonds Payable at a Discount
• What Is the Interest Expense on These Bonds Payable?
• Interest Expense on Bonds Issued at a Discount
• Accounting for Bonds Payable at a Premium
• Partial-Period Interest Amounts
• The Straight-Line Amortization Method: A Quick Way to Estimate Interest Expense
• Should We Retire Bonds Payable Before Their Maturity?
• A Brief Note on Convertible Bonds and Notes
• Account for Lease Liabilities
• Leases: An Introduction
• Accounting for Leases by Lessees
• Analyze the Advantages and Disadvantages of Borrowing
• Financing Operations with Bonds or Shares?
• Report Financing Activities on the Statement of Cash Flows
• End-of-Chapter Summary Problem
• Chapter 10. Shareholders’ Equity
• Spotlight: L’Occitane www.loccitane.com
• Explain the Features of a Corporation
• Organizing a Corporation
• Account for the Issuance of Shares
• Ordinary Shares
• Share Issuance for Other than Cash Can Create an Ethical Challenge
• Preference Shares
• Mid-Chapter Summary Problem
• Authorized, Issued, and Outstanding Shares
• Account for Treasury Shares
• How Are Treasury Shares Recorded?
• Resale of Treasury Shares
• Issuing Treasury Shares as Compensation
• Retiring Treasury Shares
• Account for Other Equity Transactions
• Retained Earnings, Dividends, and Splits
• Should the Company Declare and Pay Cash Dividends?
• Cash Dividends
• Dividends on Preference Shares
• Dividends on Cumulative and Non-Cumulative Preference Shares
• Share Dividends
• Stock Splits
• Summary of the Effects on Assets, Liabilities, and Shareholders’ Equity
• Understand the Different Values of Shares
• Market, Redemption, Liquidation, and Book Value
• Report Shareholders’ Equity on the Financial Statements
• Reporting Shareholders’ Equity Transactions on the Statement of Changes in Equity
• Reporting Shareholders’ Equity Transactions on the Statement of Cash Flows
• End-of-Chapter Summary Problem
• Chapter 11. Cash Flows
• Spotlight: Singtel www.singtel.com
• Identify the Purposes of the Statement of Cash Flows
• How’s Your Cash Flow? Telltale Signs of Financial Difficulty
• Distinguish Among Operating, Investing, and Financing Cash Flow Activities
• Operating, Investing, and Financing Activities
• Two Formats for Operating Activities
• Prepare Cash Flows from Operating Activities Using the Indirect Method
• Understanding Reconciliation of Net Income to Cash Flows from Operations
• Prepare Cash Flows from Investing Activities
• Prepare Cash Flows from Financing Activities
• Completing the Statement of Cash Flows (Indirect CFO)
• Noncash Investing and Financing Activities
• Mid-Chapter Summary Problem
• Prepare Cash Flows from Operating Activities Using the Direct Method
• Computing Operating Cash Flows by the Direct Method
• Evaluate a Company’s Ability to Generate Cash Flows
• Free Cash Flow
• Cash Realization Ratio
• End-of-Chapter Summary Problem
• Chapter 12. Financial Statement Analysis
• Spotlight: Nestlé www.nestlé.com
• Perform Basic (Horizontal, Trend, and Vertical) Analysis of Financial Statements
• Horizontal Analysis
• Trend Analysis
• Vertical Analysis
• Prepare Common-Size Financial Statements
• Benchmarking
• Mid-Chapter Summary Problem
• Perform Financial Ratio Analysis to Make Business Decisions
• Efficiency Ratios
• Financial Strength Ratios
• Profitability Ratios
• Investment Ratios
• Putting It All Together
• Using the Statement of Cash Flows
• Discuss the Limitations and Red Flags in Financial Statement Analysis
• Limitations of Ratio Analysis
• Red Flags in Financial Statement Analysis
• End-of-Chapter Summary Problem
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