Advanced Accounting Elevent Edition

Chapters 1 through 11 cover business combinations, the equity and cost methods of accounting for investments in common stock, and consolidated financial statements. This emphasizes the importance of business combinations and consolidations in advanced accounting courses as well as in financial accounting and reporting practices. Accounting and reporting standards for acquisition-method business combinations are introduced in Chapter 1 . Chapter 1 also provides necessary background material on the form and economic impact of business combinations. Chapter 2 introduces the complete equity method of accounting as a one-line consolidation, and this approach is integrated throughout subsequent chapters on consolidations. This approach permits alternate computations for such key concepts as consolidated net income and consolidated retained earnings, and it helps instructors explain the objectives of consolidation procedures. The alternative computational approaches also assist students by providing a check figure for their logic on these key concepts. The one-line consolidation is maintained as the standard for a parent company in accounting for investments in its subsidiaries. Procedures for situations in which the parent company uses the cost method or an incomplete equity method to account for investments in subsidiaries are covered in electronic supplements to the chapters, which are available at the Advanced Accounting Web site, www.pearsonhighered.com/beams. The supplements include assignment materials for these alternative methods so that students can be prepared for consolidation assignments, regardless of the method used by the parent company. Chapter 3 introduces the preparation of consolidated financial statements. Students learn how to record the fair values of the subsidiary’s identifiable net assets and implied goodwill. Chapter 4 continues consolidations coverage, introducing working paper techniques and procedures. The text emphasizes the three-section, vertical financial statement working paper approach throughout, but Chapter 4 also offers a trial balance approach in the appendix. The standard employed throughout the consolidation chapters is working papers for a parent company that uses the complete equity method of accounting (i.e., one-line consolidations) for investments in subsidiaries. Chapters 5 through 7 cover intercompany transactions in inventories, plant assets, and bonds. The Appendix to Chapter 5 reviews SEC accounting requirements. Chapter 8 discusses changes in the level of subsidiary ownership, and Chapter 9 introduces more complex affiliation structures. Chapter 10 covers several consolidation-related topics: subsidiary preferred stock, consolidated earnings per share, and income taxation for consolidated business entities. The electronic supplement to Chapter 10 covers branch accounting. Chapter 11 is a theory chapter that discusses alternative consolidation theories, push-down accounting, leveraged buyouts, corporate joint ventures, and key concepts related to accounting and reporting by PREFACE xix variable interest entities. The electronic supplement to Chapter 11 presents current cost implications for consolidated financial reporting. Chapters 9 through 11 cover specialized topics and have been written as stand-alone materials. Coverage of these chapters is not necessary for assignment of subsequent text chapters. Business enterprises become more global in nature with each passing day. Survival of a modern business depends upon access to foreign markets, suppliers, and capital. Some of the unique challenges of international business and financial reporting are covered in Chapters 12 and 13 . These chapters, covering accounting for derivatives and foreign currency transactions and translations, have been substantially revised and rewritten. The concepts and the accounting for derivatives are now separated. Chapter 12 covers the concepts and common transactions for derivatives and foreign currency. Chapter 13 covers accounting for derivative and hedging activities. Coverage includes import and export activities and forward or similar contracts used to hedge against potential exchange losses. Chapter 14 focuses on preparation of consolidated financial statements for foreign subsidiaries. This chapter includes translation and remeasurement of foreign-entity financial statements, one-line consolidation of equity method investees, consolidation of foreign subsidiaries for financial reporting purposes, and the combination of foreign branch operations. Chapter 15 introduces topics of segment reporting under FASB ASC Topic 280 , as well as interim financial reporting issues. Partnership accounting and reporting are covered in Chapters 16 and 17 . Chapter 18 discusses accounting and reporting procedures related to corporate liquidations and reorganizations. Chapters 19 through 21 provide an introduction to governmental accounting, and Chapter 22 introduces accounting for voluntary health and welfare organizations, hospitals, and colleges and universities. These chapters are completely updated through GASB Statement No. 59 , and provide students with a good grasp of key concepts and procedures related to not-for-profit accounting. Finally, Chapter 23 provides coverage of fiduciary accounting and reporting for estates and trusts.

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