Advanced Financial Accounting
© 2011The Ninth Edition of Advanced Financial Accounting is an up-to-date, comprehensive, and highly illustrated presentation of the accounting and reporting principles and procedures used in a variety of business entities. This edition continues to provide strong coverage of advanced accounting topics, with clarity of presentation and integrated coverage based on continuous case examples. The text is highly illustrated with complete presentations of worksheets, schedules, and financial statements so that students can see the development of each topic. Inclusion of all recent FASB and GASB pronouncements and the continuing deliberations of the authoritative bodies provide a current and contemporary text for students preparing for the CPA Examination and current practice. This has become especially important given the recent rapid pace of the authoritative bodies in dealing with major issues having far-reaching The book's building block approach introduces concepts with simple examples and then gradually introduces complexity, allowing students to easily keep pace with the material.
The key strengths of this text are the clear and readable discussions of concepts and the detailed demonstrations of concepts through illustrations and explanations. The many favorable responses to prior editions from both students and instructors confirm our belief that clear presentation and comprehensive illustrations are essential to learning the sophisticated topics in an advanced accounting course.
Chapter 1: Intercorporate Acquisitions and Investments in Other Entities
Chapter 2: Reporting Intercorporate Interests
Chapter 3: The Reporting Entity and Consolidated Financial Statements
Chapter 4: Consolidation of Wholly Owned Subsidiaries
Chapter 5: Consolidation of Less-Than-Wholly-Owen Subsidiaries
Chapter 6: Intercompany Transfers Noncurrent Assets
Chapter 7: Intercompany Inventory Transactions
Chapter 8: Intercompany Indebtedness
Chapter 9: Consolidation Ownership Issues
Chapter 10: Additional Consolidation Reporting Issues
Chapter 11: Multinational Accounting: Foreign Currency Transactions and Financial Instruments
Chapter 12: Multinational Accounting: Translation of Foreign Entity Statements
Chapter 13: Segment and Interim Reporting
Chapter 14: SEC Reporting
Chapter 15: Partnerships: Formation, Operation, and Changes in Membership
Chapter 16: Partnerships: Liquidation
Chapter 17: Governmental Entities: Introduction and General Fund Accounting
Chapter 18: Governmental Entities: Special Funds and Government-wide Financial Statements
Chapter 19: Not-for-Profit Entities
Chapter 20: Corporations in Financial Difficulty
New to this Edition
New Author Team: Two new authors have joined the Baker team. Theodore Christensen and David Contrell, both from BYU, bring a new dynamic and fresh approach to Advanced Accounting never seen before.
Introductory Vignettes?Each chapter begins with a brief story of a well-known company to illustrate why topics covered in that chapter are relevant in current practice.
New FASB Codification?All authoritative citations to U.S. GAAP now include secondary citations to the new FASB codification. We maintain the former authoritative citations during this period of transition. The next edition will transition completely to the FASB codification.
IFRS Comparisons?As the FASB and IASB work toward convergence to a single set of global accounting standards, the SEC is debating the wholesale introduction of international financial reporting standards (IFRS). Given the SEC's February 2010 work plan, students need to prepare for the imminent transition to IFRS. The Ninth edition summarizes key differences between current U.S. GAAP and IFRS to make students aware of changes that will likely occur if the SEC adopts IFRS in the near future.
A Building-Block Approach to Consolidation?Virtually all advanced financial accounting classes cover consolidation at least to some extent. While this topic is perhaps the most important to instructors, students frequently struggle to gain a firm grasp of consolidation principles. The Ninth edition introduces consolidation concepts and procedures more gradually by beginning the discussion earlier in chapters 2 and 3.
Reorganization of Consolidation Elimination Entries?Consistent with the building block approach to consolidation, the Ninth Edition includes a slight reorganization of the elimination entries used in consolidation to facilitate the elimination of the investment in a subsidiary in two steps: (1) first the book value portion of the investment and income from the subsidiary are eliminated and (2) then the differential portion of the investment and income from subsidiary are eliminated with separate entries. This approach facilitates the building-block approach in chapters 2-5. The Ninth Edition also uses frequent illustrations to help students visualize the steps in the elimination process.
Presentation of Intercompany Transactions?The Ninth Edition presents inter-company inventory transfers before fixed asset transfers inventory transfers are (1) far much more common than fixed asset transfers and (2) easier for students to understand. In other words, the Ninth Edition switches the order of chapters 6 and 7 from the Eighth Edition. Moreover, the Ninth Edition emphasizes the fully adjusted equity method in chapters 6, 7, and 8 instead of presenting this method in appendices to these chapters as in prior editions. This method links back to and is more consistent with the building block chapters (2, 3, 4, and 5).
New Instructor Resources?The authors have developed a new set of PowerPoint slides designed to accompany the Ninth Edition. These slides do much more than simply summarize the topics in each chapter. They illustrate key concepts but also include group exercises and practice quiz questions to give students hands-on practice in class to better prepare them for future homework and assessment experiences. Instructors benefit from proven interactive class discussions and exercises fully annotated by the authors.
New Advanced Study Guide? The Ninth Edition of Advanced Accounting introduces the most cutting edge technology supplement ever delivered in the advanced accounting market. AdvancedStudyGuide.com is a product created exclusively by the authors of the text which represents a new generation in study resources available to students as well as a new direction and options in the resources Instructors can use to help their students and elevate their classroom experiences
Retained Features
Building-block approach: This approach provides students with a thorough conceptual understanding of each topic before advancing to the procedures. Once this conceptual foundation is established, the complexities are layered gradually in successive steps.
Comprehensive Continuous Case Approach: This textbook presents the complete story of a company, Peerless Products Corporation, from its beginning, through its growth to a multinational consolidated entity, and finally to its end. At each stage of the entity's development, including the acquisition of a subsidiary, Special Foods Inc., the text presents comprehensive examples and discussions of the accounting and financial reporting issues that accountants face. The discussions tied to the Peerless Products continuous case are easily identified by the company logos in the margin.
Clear writing style: Although each chapter has been revised and/or updated, extensive efforts have been made to ensure retention of the clear writing style that adopters and reviewers have valued very highly has been preserved.
Extensive illustrations: The book is heavily illustrated with complete, not partial, workpapers, financial statements, and other computations and comparisons useful for demonstrating each topic. The illustrations are cross-referenced to the relevant text discussion. In the consolidations portion of the text, the focus is on the basic equity method of accounting for an investment in a subsidiary, but two other methods?the cost method and the fully adjusted equity method?are fully discussed and illustrated in chapter appendices.
Extensive end-of-chapter materials: A large number of questions, cases, exercises, and problems at the end of each chapter provide the opportunity to solidify understanding of the chapter material and assess mastery of the subject matter. The end-of-chapter materials progress from simple focused exercises to more complex integrated problems. Cases provide opportunities for extending thought, gaining exposure to different sources of accounting-related information, and applying the course material to real-world situations. These cases include research cases where students are referred to authoritative pronouncements, and Kaplan CPA Review simulations.
Flexible: The book is written with flexibility in mind. The chapters are self-contained and may be rearranged without penalty. "Additional Considerations? sections within the chapters allow instructors to explore topics in greater depth if they choose.
CPA Exam: The American Institute of CPAs has identified five skills to be examined as part of the CPA Exam: (a) analysis, (b) judgment, (c) communication, (d) research, and (e) understanding. The end-of-chapter materials provide abundant opportunities for students to enhance those skills with realistic and real-world applications of advanced financial accounting topics. Cases and exercises identified with a world globe icon provide special opportunities for students to access real-world data by using electronic databases, Internet search engines, or other inquiry processes to answer the questions presented on the topics in the chapters.
New Author Team: Two new authors have joined the Baker team. Theodore Christensen and David Contrell, both from BYU, bring a new dynamic and fresh approach to Advanced Accounting never seen before.
Introductory Vignettes?Each chapter begins with a brief story of a well-known company to illustrate why topics covered in that chapter are relevant in current practice.
New FASB Codification?All authoritative citations to U.S. GAAP now include secondary citations to the new FASB codification. We maintain the former authoritative citations during this period of transition. The next edition will transition completely to the FASB codification.
IFRS Comparisons?As the FASB and IASB work toward convergence to a single set of global accounting standards, the SEC is debating the wholesale introduction of international financial reporting standards (IFRS). Given the SEC's February 2010 work plan, students need to prepare for the imminent transition to IFRS. The Ninth edition summarizes key differences between current U.S. GAAP and IFRS to make students aware of changes that will likely occur if the SEC adopts IFRS in the near future.
A Building-Block Approach to Consolidation?Virtually all advanced financial accounting classes cover consolidation at least to some extent. While this topic is perhaps the most important to instructors, students frequently struggle to gain a firm grasp of consolidation principles. The Ninth edition introduces consolidation concepts and procedures more gradually by beginning the discussion earlier in chapters 2 and 3.
Reorganization of Consolidation Elimination Entries?Consistent with the building block approach to consolidation, the Ninth Edition includes a slight reorganization of the elimination entries used in consolidation to facilitate the elimination of the investment in a subsidiary in two steps: (1) first the book value portion of the investment and income from the subsidiary are eliminated and (2) then the differential portion of the investment and income from subsidiary are eliminated with separate entries. This approach facilitates the building-block approach in chapters 2-5. The Ninth Edition also uses frequent illustrations to help students visualize the steps in the elimination process.
Presentation of Intercompany Transactions?The Ninth Edition presents inter-company inventory transfers before fixed asset transfers inventory transfers are (1) far much more common than fixed asset transfers and (2) easier for students to understand. In other words, the Ninth Edition switches the order of chapters 6 and 7 from the Eighth Edition. Moreover, the Ninth Edition emphasizes the fully adjusted equity method in chapters 6, 7, and 8 instead of presenting this method in appendices to these chapters as in prior editions. This method links back to and is more consistent with the building block chapters (2, 3, 4, and 5).
New Instructor Resources?The authors have developed a new set of PowerPoint slides designed to accompany the Ninth Edition. These slides do much more than simply summarize the topics in each chapter. They illustrate key concepts but also include group exercises and practice quiz questions to give students hands-on practice in class to better prepare them for future homework and assessment experiences. Instructors benefit from proven interactive class discussions and exercises fully annotated by the authors.
New Advanced Study Guide? The Ninth Edition of Advanced Accounting introduces the most cutting edge technology supplement ever delivered in the advanced accounting market. AdvancedStudyGuide.com is a product created exclusively by the authors of the text which represents a new generation in study resources available to students as well as a new direction and options in the resources Instructors can use to help their students and elevate their classroom experiences
Retained Features
Building-block approach: This approach provides students with a thorough conceptual understanding of each topic before advancing to the procedures. Once this conceptual foundation is established, the complexities are layered gradually in successive steps.
Comprehensive Continuous Case Approach: This textbook presents the complete story of a company, Peerless Products Corporation, from its beginning, through its growth to a multinational consolidated entity, and finally to its end. At each stage of the entity's development, including the acquisition of a subsidiary, Special Foods Inc., the text presents comprehensive examples and discussions of the accounting and financial reporting issues that accountants face. The discussions tied to the Peerless Products continuous case are easily identified by the company logos in the margin.
Clear writing style: Although each chapter has been revised and/or updated, extensive efforts have been made to ensure retention of the clear writing style that adopters and reviewers have valued very highly has been preserved.
Extensive illustrations: The book is heavily illustrated with complete, not partial, workpapers, financial statements, and other computations and comparisons useful for demonstrating each topic. The illustrations are cross-referenced to the relevant text discussion. In the consolidations portion of the text, the focus is on the basic equity method of accounting for an investment in a subsidiary, but two other methods?the cost method and the fully adjusted equity method?are fully discussed and illustrated in chapter appendices.
Extensive end-of-chapter materials: A large number of questions, cases, exercises, and problems at the end of each chapter provide the opportunity to solidify understanding of the chapter material and assess mastery of the subject matter. The end-of-chapter materials progress from simple focused exercises to more complex integrated problems. Cases provide opportunities for extending thought, gaining exposure to different sources of accounting-related information, and applying the course material to real-world situations. These cases include research cases where students are referred to authoritative pronouncements, and Kaplan CPA Review simulations.
Flexible: The book is written with flexibility in mind. The chapters are self-contained and may be rearranged without penalty. "Additional Considerations? sections within the chapters allow instructors to explore topics in greater depth if they choose.
CPA Exam: The American Institute of CPAs has identified five skills to be examined as part of the CPA Exam: (a) analysis, (b) judgment, (c) communication, (d) research, and (e) understanding. The end-of-chapter materials provide abundant opportunities for students to enhance those skills with realistic and real-world applications of advanced financial accounting topics. Cases and exercises identified with a world globe icon provide special opportunities for students to access real-world data by using electronic databases, Internet search engines, or other inquiry processes to answer the questions presented on the topics in the chapters.
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