COPYRIGHTED MATERIAL. Index

Transcription

1 A AAERs (Accounting and Auditing Enforcement Releases), 191 Absences, compensated, Accelerated depreciation methods, Accounting, accrual, 6 11 budgetary, for cash, contract, see Contract accounting for debt securities, , deferred outflows and inflows in, for defined benefit pension plans, encumbrance, for equity securities, , , for fiduciary funds, 931 for forward contracts, fund, fund balance, governmental, , for governmental entities, hedge, for held-to-maturity investments, for income tax, measurement focus basis of, for net operating losses, net position, for pension expense, pushdown, for treasury stock, Accounting and Auditing Enforcement Releases (AAERs), 191 Accounting assumptions, Accounting changes, for accounting errors, approaches to, 628 prospective application, retrospective application, Accounting errors, Accounting income, 71 Accounting principles, Accounting review cycle, Accounting standards: development of, 3 4 political nature of, 4 5 Accounts receivable, allowance for, 250 balance sheet valuation of, as cash, 259 defined, 246 uncollectible, U.S. GAAP IFRS differences for, 248 Accounts receivable turnover, 119 Accruals: of compensated absences, indirect method for, 94 Accrual accounting, 6 11 Accrual basis, Accumulated depreciation, Accumulated other comprehensive income (AOCI), 78 Acid-test ratios, 118 Acquisition: as business combinations, consolidated financial statements at, consolidated financial statements subsequent to, and equity method accounting, recording, Acquisition costs: in business combinations, 653 of natural resources, Acquisition date, 648, 659 Acquisition method, assets, liabilities, and noncontrolling interests in, for business combinations, and cost of business acquired, disclosure requirements for, goodwill or bargain purchase in, and post-acquisition issues, Actual expenditures, Adjunct accounts, 65 Adjusting journal entry, 325 Advertising costs, 433 AFS (available-for-sale) investments, , 395 Agency funds, 845, AICPA (American Institute of Certified Public Accountants), 3 AICPA Statements on Auditing Standards, All-inclusive income statements, 70 Allowance method: for accounts receivable, 250 for uncollectible accounts receivable, 250 American Institute of Certified Public Accountants (AICPA), 3 Amortization: of bond fair value option, 458 of computer software costs, of intangible assets, of net gains or losses, of premiums/discounts, of prior service cost, Amortized cost, 26, Antidilution, AOCI (accumulated other comprehensive income), 78 Appraisal methods, Appropriated retained earnings, 515 Artistic-related intangible assets, 404 Assets. See also Intangible assets on balance sheets, 63 in business combinations, categories of, 335 from contingencies, 662 contract, current, see Current assets deferred tax, , COPYRIGHTED MATERIAL 965

2 Assets (continued) depreciable, disclosures for fair value measurement of, as expenses, 432 fair value of, 32 fair value of subsidiaries, fixed, see Fixed assets hedging foreign currency denominated, indemnification, 662 inexhaustible fixed, 717 intercompany fixed asset transactions, manufacturing, 325 net, of not-for-profit entities, net financial, 33 noncurrent, 64 nondepreciable, nonmonetary, sales of donated financial, 819 self-constructed, time restrictions on long-term, 820 Assets held-for-sale: in acquisition method, 657 impairment of, Assets in use, Assets to be disposed of other than by sale, 338 Assignment, of receivables, Assumptions, accounting, Auxiliary enterprises, 829 Available-for-sale (AFS) investments, , 395 Available-for-sale securities, Average method, 318 B Bad debt expense, Balance sheets: and accounting review cycle, account types on, assets and liabilities on, consolidated, 127 control and subsidiary accounts on, 67 conversion adjustments to, debt disclosures on, 67 deferred tax accounts on, financial statements, as financial statements, and firm valuation, and hedges, 715 and market capitalization, 67 measurement bases for, 63 of not-for-profit entities, reporting within, and special journals, treasury stock on, 499 Balance sheet valuation, Bank reconciliations, Bargain purchases, 409 and business combinations, recording, in mergers or consolidations, Bargain purchase option (BPO), 763 Basic earnings per share (BEPS), 197, Basket sales, 493 Beginning inventory, BEPS (basic earnings per share), 197, Bill-and-hold arrangements, 539 Bonds, amortization of premiums/discounts, convertible, 452 debt issue costs of, defined, 451 fair value option for, intercompany bond transactions, issued between interest dates, 455 issued by subsidiaries, selling price of, 452 zero-coupon, 455 Bonus compensation liabilities, 430 Book value, 324 Book value per common stock, 122 Book value per preferred share, 122 Book value per share, Borrowed funds, 320 BPS (bargain purchase option), 763 Budgets, 854 Budgetary accounting, Business combinations, acquisition method for, assets, liabilities, and noncontrolling interests in, and consolidated financial statements, 127 contingencies acquired in, cost of business acquired, defined, disclosure requirements for, goodwill and bargain purchases, and IFRS, legal forms of, post-acquisition issues with, recording, U.S. GAAP IFRS differences for, variable interest entities in, C CAs (current assets), 63, 65 CAFR (Comprehensive Annual Financial Report), Calling, of preferred stock, Capital: contributed, 481 earned, 481 legal, 484 Capitalized costs, Capital leases, accounting for, defined, 760 direct financing leases, examples of, sales type leases, U.S. GAAP IFRS differences for, Capital projects funds, 844, Carryback/carryforward option, Carryforward only option, , 625 Carrying investment, 127 Cash, accounting for, accounts and notes receivable as,

3 contributions other than, 826 internal control measures with, reconciliation of changes in, Cash basis financial statements, 231 Cash dividends, 503 Cash equivalents, 83 Cash equivalent price, Cash flows: from financing activities, 91 from investing activities, 91 from operating activities, and present value, from sales of donated financial assets, 819 Cash flow hedges, Cash surrender value of life insurance, 406 Cash transactions, 490 Category basis, 291 Change in accounting estimates, Change in accounting principle, Changing prices, CL, see Current liabilities Class disclosures, 692 Cloud computing, 420 COG (cost of goods sold), 147 Collectibility, 543 Collections, donated, 815 Colleges, Combined financial statements, Commercial substance: nonmonetary exchanges with, nonmonetary exchanges without, Common shares issued, Common stock, Common stock rights, Common stock yield, 121 Comparative statements, 82 Compensated absences, Compensation, see Employee compensation Component units, 926 Compound financial instruments, 480 Comprehensive Annual Financial Report (CAFR), Comprehensive income, 76 Computer software costs, Concentrations, Consideration: contingent, 663 noncash, payable to customer, 531 principal-agent, transfer of, transfer without, Consolidated financial statements, at acquisition, and intercompany transactions, with less than 100% ownership, subsequent to acquisition, variable interest entities eligible for, 182 Consolidations: as business combinations, 644 recording, Constant dollars, 104 Constraints, and present value, Construction payables, 320 Construction projects, Container deposits, Contingencies: acquired in business combinations, in acquisition method, 656 assets and liabilities from, 662 defined, 437 gain, 442 guarantees as, 442 U.S. GAAP IFRS differences for, Contingent consideration, 663 Contingent liabilities, examples of, and probability of future events, U.S. GAAP IFRS differences for, Contingent shares, 202 Contra accounts, 65, 325 Contracts: costs to fulfill, 543 foreign currency forward exchange, 731 foreign currency option, 732 forward, see Forward contracts futures, 694 identifying, 522 modification of, 304, option, 694 performance obligations in, 523 swap, 694 Contract assets, Contract liability, Contract-related intangible assets, 404 Contributed capital, 481 Contributions: to not-for-profit entities, other than cash, 826 raised or held for others, Control, in business combinations, Control accounts, 67 Conversion, of preferred stock, 496 Convertible bonds, 452 Corporate governance, 196 Costs, acquisition, in business combinations, 653 acquisition, of natural resources, advertising, 433 amortized, 26, of business acquired, current replacement, 25 debt issue, of bonds, depreciable, 324 development, 331 equity securities at, , 392 executory, 764, 777 expenses vs., 431 exploration, 33 to fulfill a contract, 543 get-ready, 309 and IFRS, 434 initial direct,

4 Costs (continued) inventory, margin on, 293 and matching, 432 negotiated acquisition, prior service, research and development, stock issue, 494 timing of cash payments, 431 transaction, of financial instruments, 683 Cost accounting variances, 225 Cost approach, 36 Cost constraints, 28 Cost-flow assumption, Cost method: and subsidiaries, 137 for treasury stock, 499, 501 Cost of goods sold (COGS), 147, Counter-balancing errors, 640 Credit risk disclosures: for financial instruments, 691 for hedges, 716 Currency, functional, 750, 754 Current assets (CAs), 63, 65 Current liabilities (CL), on balance sheets, 64, 65 bonus compensation liabilities, 430 defined, 424 definite liabilities, noncurrent vs., 425 payroll liabilities, reclassified as noncurrent, 461 sales taxes as, 428 short-term obligations, valuation of, Current operating performance income statements, 71 Current replacement cost, 25 Customer-related intangible assets, 404 D Debt, debt covenant compliance, disclosures of, on balance sheets, 67 retirement of, troubled, Debt covenant compliance, Debt issue costs, Debt ratio, 122 Debt securities, 356, See also Bonds accounting for, , at amortized cost, defined, 373 at fair value, transfers between classifications of, 396 Debt service funds, 844, Debt to equity ratio, 121 Declining balance method, 328 Deductible after recognized, 602 Deductible before recognized, 602 Deductible temporary differences, 603, 604 Deferrals, 94 Deferred charges, 406 Deferred outflows and inflows, Deferred revenue, Deferred tax accounts, adjusting, on balance sheets, tax rate considerations, 614 Deferred tax assets, , Defined benefit pension plans: accounting for, defined, 557 Defined contribution pension plans, Definite liabilities, Delayed recognition, Depletion, 599 Depreciable assets, Depreciable costs, 324 Depreciation: accumulated, fractional year, 329 and leases, and tax accruals, Depreciation expense, Depreciation methods, accelerated, nonaccelerated, DEPS (diluted earnings per share), 197, Derivatives: defined, 693 embedded, 695 as financial instruments, foreign currency forward exchange contracts as, 732 foreign currency option contracts as, 732 GASB Statement for, as hedges, 697 not designated for hedges, Development, 414 Development costs, 331 DFLs (direct financing leases), , , Diluted earnings per share (DEPS), 197, Dilution/antidilution method, Direct financing leases (DFLs), , , Direct method: indirect vs., 101 of operating cash flows, Direct write-off method, 249 Disclosures: about financial instruments, accounting principles of, 27 for capital structure, in footnotes, 103 for changes in accounting principles, 631 for discontinued operations, for effects of changing prices, for equity method accounting, 372 for error corrections, 640 for errors and irregularities, in footnotes, 103 for estimate changes, 636 for financial report, in footnotes, 102 under IFRS, for illegal acts, in footnotes, 103 of interest capitalization,

5 for noncurrent liabilities, in footnotes, of risks, for sale leasebacks, for segment reporting, by sponsor, 574 of tax abatements, of uncertainties, Disclosure requirements: for acquisition method, for business combinations, for earnings per share, of fair value framework, for hedges, Discontinued operations, Discounts: on bonds, on intercompany bonds, 168 Disposal activities, Dividends, allocation of, cash, 503 liquidating, property, scrip, 505 stock, U.S. GAAP IFRS differences for, 506 Dividend allocation, Dividends received deduction, 599 Division of Corporation Finance (SEC), 190 Division of Enforcement (SEC), 190 Division of Investment Management (SEC), 190 Division of Trading and Markets (SEC), 190 Dollar-value LIFO, Dollar-value LIFO retail method, E Earned capital, 481 Earnings per share (EPS), basic, diluted, disclosure requirements for, as profitability ratio, 121 U.S. GAAP IFRS differences for, 215 Economic income, 71 Effectiveness testing, for hedges, Embedded derivatives, 695 Emerging Issues Task Force (EITF), 4 Employee benefits, , 656 Employee compensation, compensated absences, employee/retiree benefit plans, pension expenses, pension plans, share-based payments as, stock appreciation rights as, stock awards as, stock options as, U.S. GAAP IFRS differences for pensions, Encumbrance accounting, Ending inventory, , 293 Endowments, of not-for-profit entities, , 960 Enterprises, auxiliary, 829 Enterprise funds, 845, Entity assumption, 24 EPS, see Earnings per share Equities: fair value of previously held, liabilities vs., of noncontrolling interests, 139 Equity, owners, see Owners equity Equity accounts, 482 Equity/investment leverage ratios, book value per common stock, 122 book value per preferred share, 122 debt ratio, 122 debt to equity ratio, 121 owners equity ratio, 121 Equity method accounting: and acquisition, for consolidated financial statements, disclosures in, 372 equity investments using, , 392 purchase of sale of investment using, significant influence in, U.S. GAAP IFRS differences for, Equity securities, accounting for, comparison of accounting models for, at cost, , 392 defined, 357 at fair value, , 391 transfers between classifications of, 395 using equity method accounting, , 392 Errors: in accounting, counter-balancing, 640 in inventory, in prior financial statements, U.S. GAAP IFRS differences for, 641 Estimates, 109 Estimate changes, 226, Estimated expenditures, Executory costs, 764, 777 Exit activities, Expected cash flow approach, 30 Expected value method, Expenditures: estimated vs. actual, post-acquisition, Expenses, assets and liabilities as, 432 bad debt, costs vs., 431 defined, 70 depreciation, for health care organizations, and IFRS, 434 intercompany, 146 losses vs., 431 matching, 432 of not-for-profit entities, property taxes as, reporting, by nature and function, 808 timing of cash payments,

6 Expense recognition: accounting principles of, in interim reporting, Exploration costs, 33 Export transactions, F Factoring, of receivables, Fair value: in acquisition method, , 659 debt securities at, defined, 31 disclosure of, for financial instruments, equity securities at, , 391 of forward exchange contracts, of forward exchange option contracts, GASB Statement for, instruments not eligible for, 37 measurement and application of, as measurement attribute, 25 of noncontrolling interest, 658 for nonmonetary assets, of previously held equities, readily determined, of subsidiaries assets/liabilities, Fair value framework, defined, disclosure requirements of, hierarchy in, inputs in, 38 recognition in, Fair value hedges, Fair value option: for bonds, disclosures related to, election of, FASB (Financial Accounting Standards Board), 2 5 FCOs (foreign currency option contracts), 732 Fiduciary funds, 845, , 924, 931 FIFO (first in last out), , 282 Financial Accounting Standards Board (FASB), 2 5 Financial Accounting Standards codification, Financial instruments, categories of, 683 compound, 480 defined, 682 derivatives, disclosures about, hedges, impairment of, 683 transaction costs of, 683 U.S. GAAP IFRS differences for, Financial liabilities, 33 Financial reporting, 21 30, accounting assumptions in, accounting principles in, on balance sheets, and characteristics of accounting information, Comprehensive Annual Financial Report, of comprehensive income, financial reporting entities, fund-level, for governmental entities, for governmental hospitals, of notes payable, of not-for-profit entities, objectives of, 21 by pension plans, Financial reporting entities, Financial Reporting Releases (FRRs), 191 Financial statements, balance sheets, see Balance sheets cash basis, 231 combined, components of, 12 16, consolidated, see Consolidated financial statements deferred outflows and inflows on, errors in prior, foreign, see Foreign financial statements for governmental colleges and universities, 830 government-wide, 916 held-to-maturity investments on, 385 income statements, see Income statements income tax basis, 232 modified cash basis, natural resources on, notes to, for not-for-profit colleges and universities, 830 of not-for-profit entities, of not-for-profit healthcare entities, statements of cash flows, see Statements of cash flows statements of changes in equity, statements of comprehensive income, see Statements of comprehensive income Financial statement ratio analysis, 116, 120 Financing activities: cash flows from, 91 on statements of cash flows, 93 Fines, 599 Firm commitments, , Firm valuation, First in last out (FIFO), , Fixed assets: donated to not-for-profit entities, 815 inexhaustible, 717 Footnotes, under IFRS, Forecasted transactions, , Foreign Corrupt Practices Act of 1977, 195 Foreign currency denominated transactions, export transactions, import transactions, Foreign currency forward exchange contracts (FXFCs), 731 Foreign currency hedges, Foreign currency option contracts (FCOs), 732 Foreign currency transactions, 720 Foreign currency translation, 92, 720 Foreign financial statements, conversion using re-measurement, conversion using translation, U.S. GAAP IFRS differences for, Forward contracts, accounting treatment of, defined,

7 as derivatives, 694 hedging firm commitments, and hedging forecasted transactions, hedging foreign currency denominated assets/ liabilities, hedging foreign currency denominated available-forsale securities, natural hedge as, speculation with, 747 Fractional year depreciation, 329 FRRs (Financial Reporting Releases), 191 Full-costing method, 331 Functional currency, 750, 754 Funds, agency, capital projects, debt service, defined, 841 enterprise, fiduciary, 845, fund-level reporting, governmental, , interfund transactions, internal service, 845, , 931 investment trust, other postemployment benefits trust, pension trust, permanent, private purpose trust, 910 proprietary, 845, special revenue, structure of, Fund accounting, Fund balance accounting, Fund-level financial reporting, Future cash flows, Futures contracts, 694 Future differences, 603 FXFCs (foreign currency forward exchange contracts), 731 G GAAP, see Generally Accepted Accounting Principles Gains: in acquisition method, 659 defined, 70 from discontinued operations, 186 net, and pension expense, of not-for-profit entities, 805 of not-for-profit healthcare entities, in purchasing power, 106 Gain contingencies, 442 GASB Concept Statements, for derivatives, for fair value, for intangible assets, for investment pools, 963 for irrevocable split-interest agreements, 964 for land and real estate, 960 for pollution remediation obligations, 958 General fixed asset account group (GFAAG), 846 General Funds (governmental), General long-term debt account group (GLTDAG), 846 Generally Accepted Accounting Principles (GAAP): for accrual accounting, 6 7 defined, 2 enforcement of, 5 on statements of cash flows, 85 General prices, General price changes, General price-level change, Get-ready costs, 309 GFAAG (general fixed asset account group), 846 Gift certificates/cards, GLTDAG (general long-term debt account group), 846 Going concerns, 24, Goods on consignment, Goodwill: and bargain purchases, 409 and business combinations, defined, 407 impairment of, as intangible asset, 405, internally developed, 409 under Private Company Council, 235 recording, in mergers or consolidations, U.S. GAAP IFRS differences for, 423 Governmental accounting, , Governmental colleges and universities, 830 Governmental entities, Governmental funds, , 847, Governmental hospitals, Governmental organizations, Government-wide financial statements, 916, Gross margin method: inventory, for inventory with interim reporting, 225 Group/composite method, 330 Guarantees: as contingencies, 442 nonexchange financial, 947 Guaranteed residual value, 763 H Health care organizations, Hedges, cash flow, defined, 698 derivatives as, 697 disclosure requirements for, documentation for, 698 effectiveness of, fair value, foreign currency, natural, U.S. GAAP IFRS differences for, Hedge accounting, Hedging: defined, 736 of firm commitments, of forecasted transactions, of foreign currency denominated assets/liabilities, of foreign currency denominated available-for-sale securities,

8 Held-to-maturity (HTM) investments, , 395 Hierarchy, in fair value framework, Horizontal format, of statement of changes in equity, Hospitals, governmental, HTM (held-to-maturity) investments, , 395 I IASB, see International Accounting Standards Board I/C transactions, see Intercompany transactions If-converted method, IFRS, see International Financial Reporting Standards Impairment, of assets held-for-sale, of assets in use, of assets to be disposed of other than by sale, of financial instruments, 683 of goodwill, of held-to-maturity investments, and IFRS, indicators of, 335 of investments, in equity securities, of loans, of notes receivable, Implicit interest rate, 764 Import transactions, Income: accounting, 71 comprehensive, 76 from continuing operations, determined for business combinations, 645 from discontinued operations, 185 economic, 71 to noncontrolling interests, Income approach, 36 Income statements: all-inclusive, 70 consolidated, 127 current operating performance, 71 as financial statements, 12, and hedges, 716 income from continuing operations on, structure of, unusual and infrequent income items on, 73 Income tax, accounting for, in acquisition method, 656 deferred tax accounts, deferred tax assets, , interperiod tax allocation process, and net operating losses, permanent differences, tax accrual entries, tax rate considerations, 614 temporary differences, uncertain tax positions, Income tax basis financial statements, 232 Incremental borrowing rate, 765 Indemnification assets, 662 Indemnification provisions, 656 Indirect method: direct vs., 101 of operating cash flows, Individual item basis, 291 Inexhaustible fixed assets, 717 Inflation, 104 Inflows: categories of, 86, 91 deferred, in accounting, Infrastructure, Infrequent income items, 73 Initial book value (of bonds), 452 Initial direct costs, 778 Initial franchise fees, Initial investments, in equity securities, 362 Inputs, in fair value framework, 38 Installment notes, Intangible assets, amortization of, cash surrender value of life insurance as, 406 classification of, customer-related, 404 deferred charges as, 406 defined, 402 GASB Statement for, goodwill, 407 and IFRS, under Private Company Council, 237 types of, U.S. GAAP IFRS differences for, 421 Intercompany sales, Intercompany (I/C) transactions, bond transactions, consolidated financial statements and, fixed asset transactions, inventory transactions, receivables and payables, 145 revenues and expenses, 146 U.S. GAAP IFRS differences for, Interest-bearing notes receivable, 255 Interest capitalization, appropriate interest rate for, 316 on borrowed funds, 320 computation of, 316 conditions for, 315 construction payables in, 320 disclosures of, 321 and land, 320 limit on, partial year computations, process of, 315 Interest dates, 455 Interest/market rate, 255 Interest rate: implicit, 764 for interest capitalization, 316 Interest rate swaps, 236 Interfund transactions, Interim reporting, cost accounting variances in, 225 for declines in inventory, for estimate changes, 226 expense recognition in, gross margin method for inventory with, 225 for LIFO liquidations, 225 for principle changes,

9 requirements for, revenue recognition in, 222 and segment reporting, 226 U.S. GAAP IFRS differences for, Internal control measures, Internally developed goodwill, 409 Internally developed software, Internal service funds, 845, , 931 International Accounting Standards Board (IASB), accounting standards of, Framework for the Preparation and Presentation of Financial Statements, and International Financial Reporting Standards, International Financial Reporting Standards (IFRS), International Organization of Securities Commissions (IOSCO), 45 Interperiod tax allocation process, Inventory, beginning, cost-flow assumption, defined, 267 dollar-value LIFO, dollar-value LIFO retail method, ending, , 293 errors in, and FIFO, gross margin method, and IFRS, intercompany inventory transactions, interim reporting for declines in, and LIFO, 279 losses on, 289 losses on purchase commitments, lower of cost or market, periodic inventory system, , perpetual inventory system, relative sales value method, retail inventory method, subsequent measurement of, valuation of, Inventory costs, Inventory method, 329 Inventory turnover, 119 Investing activities, 91 Investments, available-for-sale, , 395 carrying, 127 categories of, under IFRS, comparison of, debt securities, , 356, equity securities, held-to-maturity, land and other real estate as, 960 measurement of, under IFRS, 398 of not-for-profit entities, stock dividends, 386 stock rights, stock splits, transfers between classifications of, under IFRS, 399 transfers of, U.S. GAAP IFRS differences for, Investment leverage ratios, see Equity/investment leverage ratios Investment pools, 963 Investment trust funds, 845, Investment value, in acquisition method, 659 Irrevocable split-interest agreements, 964 J Joint and several liability arrangements, 450 Jurisdiction: for governmental entities, over not-for-profit entities, 801 L Land: GASB Statement for, 960 and interest capitalization, 320 leases involving, 778 as plant assets, 308 Land improvements, 308 Last in first out (LIFO): and inventory, 279 and retail inventory method, LCM, see Lower of cost or market Leases, capital, see Capital leases classification of, 767 defined, 760 and depreciation, direct financing, involving land, 778 and lessor s equation, minimum lease payments, operating, sale leasebacks, sales type, U.S. GAAP IFRS differences for, 778 Lease term, 763 Legal capital, 484 Lessee minimum lease payments, 764 Lessor s equation, Lessor minimum lease payments, 764 Liabilities: on balance sheets, 64 bonus compensation, 430 in business combinations, from contingencies, 662 contingent, see Contingent liabilities contract, current, see Current liabilities defined, 424 definite, disclosures for fair value measurement of, equity vs., as expenses, 432 fair value of, 33 fair value of subsidiaries, hedging foreign currency denominated, long-term, noncurrent, see Noncurrent liabilities payroll,

10 Life insurance: cash surrender value of, 406 proceeds on, as permanent difference, 599 Life insurance expense, 599 LIFO (last in first out), 279, LIFO liquidations, 225, Liquidating dividends, Liquidity/solvency ratios, acid-test ratios, 118 securities defensive-interval ratios, 118 times interest earned ratios, 118 times preferred dividend earned ratios, 118 working capital ratios, Loan impairment, Local governments, Long-term liabilities, Look through, 360 Losses: in beginning inventory, defined, 70 from discontinued operations, 186 expenses vs., 431 on intercompany sales, on inventory, 289 net, and pension expense, of not-for-profit entities, of not-for-profit healthcare entities, on purchase commitments, in purchasing power, 106 Lower of cost or market (LCM): inventory, and retail inventory method, M Maker, of notes receivable, 259 Management s discussion and analysis (MD&A), 103 Manufacturing assets, 325 Margin on costs, Margin on sales, Market approach, 36 Market capitalization, 67 Marketing-related intangible assets, 404 Market risk disclosures, 691 Market value, 255 Matching principle, 432 MD&A (management s discussion and analysis), 103 Measurement bases, 63 Measurement focus basis, Measurement period, Mergers: as business combinations, recording, Minimum book value, 324 Minimum lease payments, 764, Modified cash basis financial statements, Monetary items, 105 Most likely amount method, Multiple performance obligations, N Natural hedges, Natural resources, costs in extraction of, 332 defined, 331 depletion of, on financial statements, as plant assets, 308 NCAs (noncurrent assets), 64, 65 NCI (noncontrolling interests), NCLs, see Noncurrent liabilities Negotiated acquisition cost, Net assets, Net financial assets, 33 Net gains, Net income, 90 Net losses, Net operating losses (NOLs): accounting for, income tax, and temporary differences, 626 U.S. GAAP IFRS differences for, 627 Net position accounting, Net present value, 26 Net realizable value, 25 NFP, see Not-for-profit entities NFP entities, see Not-for-profit entities NOLs, see Net operating losses Nominal dollars, 104 Nonaccelerated depreciation methods, Noncash consideration, Noncash investing, 93 Noncash items, Noncontrolling interests (NCI), Noncurrent assets (NCAs), 64, 65 Noncurrent liabilities (NCLs): on balance sheets, 64, 65 current liabilities reclassified as, 461 current vs., 425 Nondepreciable assets, Nonexchange financial guarantees, 947 Nonexchange transactions, 810, Non-GAAP comprehensive bases, cash basis financial statements, 231 income tax basis financial statements, 232 modified cash basis financial statements, special purpose framework, 230 Non-interest bearing notes payable, 448 Non-interest bearing notes receivable, 255 Nonmonetary assets, Nonmonetary exchanges, with commercial substance, U.S. GAAP IFRS differences for, 351 without commercial substance, Nonmonetary items, 105 Nonoperating revenue, Nonrecurring basis, 41 Nonrefundable upfront fees, 539 Nontrade receivable, 246 Notes, to financial statements,

11 Notes payable, examples of, joint and several liability arrangements, 450 reporting of, types of, Notes receivable, as cash, 259 defined, 246 determination of present value of future cash flows, impairment of, recording, 255 types of, 255 Not-for-profit (NFP) entities, categories of, colleges and universities as, contributions raised or held for others, contributions to, financial reporting by, fixed assets donated to, 815 health care organizations as, promises to give to, services donated to, 814 Number of days sales in average receivables, 119 Number of days supply in inventory, 119 O Obligations: pollution remediation, , 958 short-term, Observable transactions, 363 OCI ( other comprehensive income), OE, see Owners equity Office of the Chief Accountant (SEC), 190 OPEB (other postemployment benefits) trust funds, Operating activities, Operating cash flows, direct method of, direct vs. indirect method, 101 indirect method of, Operating leases, Operating number of cycle, 119 Operating segments, 216 Operating statements, Operational activity ratios, accounts receivable turnover, 119 inventory turnover, 119 number of days sales in average receivables, 119 number of days supply in inventory, 119 operating number of cycle, 119 Options, written put, Option contracts, 694 Original creditors, 259 Originating differences, 603 Other comprehensive income (OCI), Other postemployment benefits (OPEB) trust funds, Outflows: categories of, 86, 91 deferred, in accounting, Owners equity (OE), on balance sheets, 65 book value per share, common shares issued, defined, 481 dividend allocation, dividends, legal capital, 484 preferred stock, presentation of equity accounts, 482 and quasi reorganization, retained earnings, rights of shareholders, stock dividends, stock issuance, stock rights, stock splits, 509 treasury stock, U.S. GAAP IFRS differences for, Owners equity ratio, 121 P Parents, , Parent accounts, 125 Partial year depreciation, 329 Par value method, Patient service revenue(s), 823 Payables, intercompany, 145 Payroll liabilities, PCC, see Private Company Council PCS (potential common stock), 205 Penalties, 599 Pension expenses, Pension plans: employee compensation, reporting by, sponsor, disclosures by, 574 U.S. GAAP IFRS differences for, Pension trust funds, 845, P/E (price-earnings) ratio, 121 Performance obligations: in contracts, multiple, single, 532 Periodic inventory system, , Permanent differences, Permanent funds, 844, Perpetual inventory system, Per share basis, 121 Plant and equipment, 308 Plant assets, 308 capitalized costs of, categories of, 308 valuation of, Pledges, see Promises to give, to not-for-profit entities Pledging, of receivables, Pollution remediation obligations, , 958 Post-acquisition expenditures, Post-acquisition issues, Post retirement benefits, Potential common stock (PCS), 205 PPE (property, plant and equipment),

12 Practicability exception, Practical expedient exception, 33 Preferred stock: and dividend allocation, issuances of, 490 as owner s equity, Preferred stock rights, Premiums: on bonds, on intercompany bonds, 168 Premium revenues, 824 Present value: and constraints, of future cash flows, of notes receivable, 255 Prices: cash equivalent, general, selling, 452 Price changes, Price-earnings (P/E) ratio, 121 Primary government, 926 Principal-agent relationships or considerations, Principle changes, Prior service cost (PSC), Private Company Council (PCC), framework of, 235 goodwill under, 235 intangible assets under, 237 interest rate swaps under, 236 process of, public business entities under, 234 purpose of, 234 variable interest entities under, Private purpose trust funds, 845, 910 Proceeds on life insurance, 599 Profits: in beginning inventory, on intercompany sales, Profitability ratios, common stock yield, 121 earnings per share, 121 per share basis, 121 price-earnings ratio, 121 profit margin, 120 return on all stockholders equity, 121 return on common stockholders equity, 120 return on owners equity, 121 return on total assets, 120 total basis, 121 Profit margin, 120 Promises to give, to not-for-profit entities, Property, plant and equipment (PPE), Property dividends, Proprietary funds, 845, , Prospective application: accounting changes, hedge effectiveness, 713 PSC (prior service cost), Public business entities, 234 Purchase commitments, Purchasing power: defined, 105 gains and losses on, 106 Pushdown accounting, Put options, written, Q Qualitative disclosures, Quantitative disclosures, 692 Quantitative tests, 216 Quasi reorganization, R Ratios, See also specific ratios on balance sheets, 64 equity/investment leverage, liquidity/solvency, operational activity, profitability, R&D (research and development) costs, Reacquired rights, 657 Readily determined fair value, Real estate, 960 Realization, 354 Receivables: assignment of, factoring of, intercompany, 145 pledging of, sale of, transfer of, see Transfer of receivables types of, 246 Recognition: in acquisition method, of contributions, defined, 354 delayed, of derivatives, expense, see Expense recognition in fair value framework, of long-term liabilities, 944 revenue, see Revenue recognition Reconciliation, of changes in cash, Recording: of budgets, 854 business combinations, notes receivable, 255 of troubled debts, Recurring basis, 40 Redeemable preferred stock, 496 Redeemable shares, Redemption, of preferred stock, Regulation S-K, 192 Regulation S-X, 192 Relative sales value method, Re-measurement method, Reporting, see Financial reporting; Segment reporting Reporting entities, 634 Reporting requirements, Required supplementary information (RSI), 922 Research, 414 Research and development (R&D) costs,

13 Residual value: guaranteed, 763 third party guarantee of, 777 unguaranteed, 777 Resource flow statements, 839 Restricted stock, restricted stock units (RSUs), 591 Retail inventory method, Retained earnings, Retirement, of debt, Retirement benefits, pension plans, post retirement benefits, Retrospective application: accounting changes, hedge effectiveness, Return on all stockholders equity, 121 Return on common stockholders equity, 120 Return on owners equity, 121 Return on total assets, 120 Revenue(s): classifications of, deferred, defined, 70, 522 intercompany, 146 nonoperating, of not-for-profit entities, 805 patient service, 823 premium, 824 tuition, Revenue recognition, accounting principles of, 26 allocating transaction price, for bill-and-hold arrangements, 539 for collectibility, 543 for container deposits, for contract modifications, for costs to fulfill a contract, 543 criteria for, 522 for deferred revenues, determining transaction price, five steps of, for gift certificate/cards, for goods on consignment, for health care organizations, for initial franchise fee, 543 for initial franchise fees, in interim reporting, 222 for nonrefundable upfront fees, 539 for principal-agent relationships or considerations, on sales with a right of return, for warranties, Reversing differences, 603 Rights of shareholders, Risks, disclosures of, RSI (required supplementary information), 922 S SABs (Staff Accounting Bulletins), 191 Sales: of donated financial assets, 819 intercompany, of investments using equity method accounting, of securities, 364 by subsidiaries, to parents, , Sale leasebacks, Sale of receivables, Sales taxes, 428 Sales type leases, , , Sales with a right of return, Sarbanes-Oxley Act of 2002 (SOX), 196 SARs (stock appreciation rights), SCFs, see Statements of cash flows Scrip dividends, 505 SEC, see Securities and Exchange Commission Securities: available-for-sale, debt, see Debt securities defined, 192 equity, see Equity securities sales of, 364 Securities Act of 1933, Securities and Exchange Commission (SEC), organizational structure of, purpose of, reporting requirements of, and standard setting, 3, 191 Securities defensive-interval ratios, 118 Securities Exchange Act of 1934, Segment reporting, , 226 Self-constructed assets, Selling price, of bonds, 452 Services, donated, 814 Service hours method, 326 Shares: contingent, 202 of fixed dollar value, redeemable, Share adjustments, Share-based payments: awards of, 657 as compensation, Shareholders equity, 33 Short-term obligations, Sick pay benefits, 436 Significant financing component, Significant influence, Simple bank reconciliation, Single performance obligations, 532 SLGs (state and local governments), Software, internally developed, Solvency ratios, see Liquidity/solvency ratios SOX (Sarbanes-Oxley Act of 2002), 196 Special journals, Special purpose frameworks, Special revenue funds, 844, Specific price changes, 105 Speculation, 747 Staff Accounting Bulletins (SABs), 191 Standard setting: and American Institute of Certified Public Accountants, 3 and Securities and Exchange Commission, 3,

14 State and local governments (SLGs), Statements of activity, , Statements of cash flows (SCFs), cash flows from financing activities, 91 cash flows from investing activities, 91 cash flows from operating activities, consolidated, 127 direct method of, direct vs. indirect method, 101 effects of foreign currency translation on, 92 examples of, 101 as financial statements, financing activities, 93 formats allowed by GAAP, 85 and hedges, 716 indirect method of, noncash investing, 93 of not-for-profit entities, operating cash flows on, reconciliation of changes in cash, requirements of, Statements of changes in equity, Statements of comprehensive income: financial statements, as financial statements, 12 Statements of financial position, see Balance sheets Statements of net position, Statements of retained earnings, 127, 517 Statements of stockholders equity, 15 Stock: common, issued in exchange for nonmonetary consideration, 492 issue of, potential common, 205 preferred, see Preferred stock restricted, sold on subscription basis, treasury, true no par, 490 Stock appreciation rights (SARs), Stock awards, Stock dividends, 386, Stock issue costs, 494 Stock options, Stock purchase plans, Stock rights, , Stock splits, , 509 Straight-line method, Subsequent events, Subsidiaries: bonds issued by, carrying investment in, 127 fair value of assets/liabilities of, sales to parents, by, sales to parents from, Subsidiary accounts, 67, 124 Successful-efforts method, 331 Sum-of-the-years digits method, Swap contracts, 694 T Tax abatements, disclosures of, Taxable after recognized, Taxable before recognized, 602 Taxable temporary differences, 603 Tax accrual entries, Tax-free interest income, 599 Technology-related intangible assets, 404 Temporary differences, , 626 Third-party financial institutions, 259 Third party guarantee of residual value, 777 Time period assumption, 25 Time restrictions, on long-term assets, 820 Times interest earned ratios, 118 Times preferred dividend earned ratios, 118 Timing of cash payments, 431 Total basis, 121, 291 Trade receivable, 246 Trading classification: of debt securities, , 394 Transactions: export, forecasted, , foreign currency, 720 foreign currency denominated, hedging forecasted, import, interfund, nonexchange, 810, observable, 363 Transaction costs, 683 Transaction price: allocating, 523, determining, 523, Transfer(s): between categories of investments, of consideration, without consideration, Transfer of receivables, under IFRS, 261 parties in, 259 Translation method, Treasury stock, Treasury stock method, Troubled debt, True no par stock, 490 Trust funds: investment, 845, other postemployment benefits, pension, 845, private purpose, 845, 910 Tuition revenues, U Unappropriated retained earnings, 515 Uncertain tax positions, Uncertainties, Uncollectible accounts receivable, Underwater endowment funds, 819 Unguaranteed residual value, 777 Unit-of-measure assumption, Units of output method,

15 Universities, Unusual items, 73 V Valuation: balance sheet, of current liabilities, firm, of inventory, of plant assets, of receivables, Valuation accounts, 65 Valuation allowance, Variable interest entities (VIEs): assessment of, in business combinations, eligible for consolidated financial statements, 182 under IFRS, 176 under Private Company Council, Vertical format, of statement of changes in equity, Voting interests, 183 W Warranties, Weighted average (WA), 201 Weighted average method, 316 Working capital ratios, Write-down, Written put options, Z Zero-coupon bonds,

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