Financial Reporting and Analysis, Canadian Edition

1. The Economic and Institutional Setting for Financial Reporting. Why Financial Statements Are Important. Economics of Accounting Information. A Closer Look at Professional Analysts. The Rules of the Financial Reporting Game. An International Perspective. Challenges Confronting the Analyst. Appendix A: GAAP in Canada. Appendix B: Current Institutional Structure in the United States. 2. Accrual Accounting and Income Determination. Example: Cash Versus Accrual Income Measurement. Measuring Profit Performance: Revenues and Expenses. Income Statement Format and Classification. Comprehensive Income: An American Accounting Innovation. Appendix: Special Revenue Recognition Issues. Revenue Recognition Prior to Sale. Revenue Recognition Subsequent to Sale. 3. Structure of the Balance Sheet and Cash Flow Statement. Measurement Conventions for Balance Sheet Accounts. Cash Flow Statement. 4. Essentials of Financial Statement Analysis. Basic Approaches. Quaker Oats Company (An Illustration). Profitability, Competition, and Business Strategy. 5. The Role of Financial Information in Valuation, Cash Flow Analysis, and Credit Risk Assessment. Corporate Valuation. Sources of Variation in P/E Multiples. Valuing a Business Opportunity (An Illusion). Cash Flow Analysis and Credit Risk. Appendix A: Abnormal Earnings Valuation, Reebok International Ltd. Appendix B: Measuring Cash Flow at Standard & Poor's. 6. The Role of Financial Information in Contracting. Conflicts of Interest in Business Relationships. Lending Agreements and Debt Covenants. Management Compensation. Appendix: TCBY Enterprises, Inc., Excerpts from Amended and Revised Term Loan. 7. Receivables. Assessing the Net Realizable Value of Accounts Receivable. Imputed Interest on Trade Notes Receivable. Accelerating Cash Collection: Transfers and Dispositions of Receivables. Troubled Debt Restructuring. 8. Inventories. An Overview of Inventory Accounting Issues. Determining Inventory Quantities. Items Included in Inventory. Costs Included in Inventory. Absorption Costing Versus Variable Costing. Cost Flow Assumptions: The Concepts. LIFO Liquidation. Eliminating LIFO Ratio Distortions. Eliminating Realized Holding Gains for FIFO Firms. Appendix A: Eliminating Realized Holding Gains from FIFO Income. Appendix B: Lower of Cost and Market Method. 9. Capital Assets and Amortization. Measuring the Carrying Amount of Capital Assets. Capital Asset Measurement Rules Illustrated. Financial Analysis and Capital Asset Reporting. Intangible Assets. A Case Study of Ambiguities in Capitalization Criteria: Oil and Gas Exploration Costs. Asset Impairment. Amortization. International Perspective. 10. Financial Instruments as Liabilities. Bonds Payable. Managerial Incentives and Financial Reporting for Debt. Incentives for Off-Balance-Sheet Liabilities. Hedging. Canadian GAAP and Financial Instruments. Loss Contingencies. 11. Financial Reporting for Leases. Evolution of Lease Accounting. Lessee Accounting. Lessor Accounting. Additional Leasing Aspects. Appendix: Making Balance Sheet Data Comparable by Adjusting for Off-Balance-Sheet Leases. Income Tax Reporting. Understanding Income Tax Reporting. Using Footnote Disclosures to Improve Financial Analysis. Step-by-Step Approach to Deriving Income Tax Journal Entries Under Section 3465 for Straightforward Situations. Appendix A: A Comprehensive Interperiod Tax Allocation Problem. Appendix B: Income Tax Expense Under Old Section 3470 Versus New Section 3465: Income Statement Versus Balance Sheet Focus. Appendix C: The Canadian Capital Cost Allowance (CCA) System. 13. Pensions and Postretirement Benefits. Financial Reporting for Pensions. Postretirement Benefits Other Than Pensions. Are Pension and Other Postemployment Benefits (OPEB) Disclosures Useful? The Research Evidence. 14. Financial Reporting for Owner's Equity. Appropriate Income Measurement. Compliance with Contract Terms. Legality of Corporate Distributions. Illustration of the Shareholders' Equity Section of a Balance Sheet. Earnings per Share. Accounting for Stock-Based Compensation. Convertible Debt. Appendix A: Accounting for Shares. Appendix B: Earnings per Share Example. 15. Intercorporate Equity Investments. Minority Ownership. Control Relationships (Usually Signified by a Majority Ownership). More Complexities in Consolidation Accounting. Foreign Subsidiaries. 16. Cash Flow Statement. Statement Format. The Direct Approach. The Indirect Approach. Preparing the Cash Flow Statement. Reconciling Between Statements: Some Complexities. 17. Overview of International Financial Reporting Differences and Inflation. An International Financial Reporting Map. Inflation Accounting. Appendix: Present Value Tables. Index.