西方财务会计 原版课件(2).ppt

,CHAPTER4,INCOMESTATEMENTANDRELATEDINFORMATION,IntermediateAccounting13thEditionKieso,Weygandt,andWarfield,Understandtheusesandlimitationsofanincomestatement.Prepareasingle-stepincomestatement.Prepareamultiple-stepincomestatement.Explainhowtoreportirregularitems.Explainintraperiodtaxallocation.Identifywheretoreportearningspershareinformation.Preparearetainedearningsstatement.Explainhowtoreportothercomprehensiveincome.,LearningObjectives,ElementsSingle-stepMultiple-stepCondensedincomestatements,IncomeStatement,FormatoftheIncomeStatement,ReportingIrregularItems,SpecialReportingIssues,UsefulnessLimitationsQualityofEarnings,DiscontinuedoperationsExtraordinaryitemsUnusualgainsandlossesChangesinaccountingprinciplesChangesinestimatesCorrectionsoferrors,IntraperiodtaxallocationEarningspershareRetainedearningsstatementComprehensiveincome,IncomeStatementandRelatedInformation,Evaluatepastperformance.,IncomeStatement,LO1Understandtheusesandlimitationsofanincomestatement.,Helpassesstheriskoruncertaintyofachievingfuturecashflows.,Predictingfutureperformance.,Usefulness,Companiesomititemsthatcannotbemeasuredreliably.,IncomeStatement,Limitations,LO1Understandtheusesandlimitationsofanincomestatement.,Incomemeasurementinvolvesjudgment.,Incomeisaffectedbytheaccountingmethodsemployed.,CompanieshaveincentivestomanageincometomeetorbeatWallStreetexpectations,sothatmarketpriceofstockincreasesandvalueofstockoptionsincrease.,IncomeStatement,LO1Understandtheusesandlimitationsofanincomestatement.,Qualityofearningsisreducedifearningsmanagementresultsininformationthatislessusefulforpredictingfutureearningsandcashflows.,QualityofEarnings,FormatoftheIncomeStatement,LO1Understandtheusesandlimitationsofanincomestatement.,RevenuesInflowsorotherenhancementsofassetsorsettlementsofitsliabilitiesthatconstitutetheentitysongoingmajororcentraloperations.,SalesFeerevenueInterestrevenueDividendrevenueRentrevenue,ExamplesofRevenueAccounts,ElementsoftheIncomeStatement,FormatoftheIncomeStatement,LO1Understandtheusesandlimitationsofanincomestatement.,ExpensesOutflowsorotherusing-upofassetsorincurrencesofliabilitiesthatconstitutetheentitysongoingmajororcentraloperations.,CostofgoodssoldDepreciationexpenseInterestexpenseRentexpenseSalaryexpense,ExamplesofExpenseAccounts,ElementsoftheIncomeStatement,FormatoftheIncomeStatement,LO1Understandtheusesandlimitationsofanincomestatement.,GainsIncreasesinequity(netassets)fromperipheralorincidentaltransactions.Losses-Decreasesinequity(netassets)fromperipheralorincidentaltransactions.,Gainsandlossescanresultfromsaleofinvestmentsorplantassets,settlementofliabilities,write-offsofassets.,ElementsoftheIncomeStatement,Single-StepFormat,LO2Prepareasingle-stepincomestatement.,Thesingle-stepstatementconsistsofjusttwogroupings:,RevenuesExpensesNetIncome,Single-Step,NodistinctionbetweenOperatingandNon-operatingcategories.,Single-StepFormat,LO2Prepareasingle-stepincomestatement.,E4-4:Prepareanincomestatementfromthedatabelow.,Solutiononnotespage,Thesingle-stepincomestatementemphasizesa.thegrossprofitfigure.b.totalrevenuesandtotalexpenses.c.extraordinaryitemsmorethanitisemphasizedinthemultiple-stepincomestatement.d.thevariouscomponentsofincomefromcontinuingoperations.,Review,Single-StepFormat,LO2Prepareasingle-stepincomestatement.,Separatesoperatingtransactionsfromnonoperatingtransactions.Matchescostsandexpenseswithrelatedrevenues.Highlightscertainintermediatecomponentsofincomethatanalystsuse.,LO3Prepareamultiple-stepincomestatement.,Multiple-StepFormat,Background,OperatingsectionNonoperatingsectionIncometaxDiscontinuedoperationsExtraordinaryitemsEarningspershare,LO3Prepareamultiple-stepincomestatement.,Multiple-StepFormat,IncomeStatementSections,Multiple-StepFormat,LO3Prepareamultiple-stepincomestatement.,Thepresentationdividesinformationintomajorsections.,1.OperatingSection,2.NonoperatingSection,3.Incometax,Multiple-StepFormat,Illustration(E4-4):Prepareanincomestatementfromthedatabelow.,Solutiononnotespage,Review,Aseparationofoperatingandnonoperatingactivitiesofacompanyexistsina.bothamultiple-stepandsingle-stepincomestatement.b.amultiple-stepbutnotasingle-stepincomestatement.c.asingle-stepbutnotamultiple-stepincomestatement.d.neitherasingle-stepnoramultiple-stepincomestatement.,Multiple-StepFormat,LO3Prepareamultiple-stepincomestatement.,Companiesarerequiredtoreportirregularitemsinthefinancialstatementssouserscandeterminethelong-runearningpowerofthecompany.,LO4Explainhowtoreportirregularitems.,ReportingIrregularItems,Illustration4-5NumberofIrregularItemsReportedinaRecentYearby600LargeCompanies,IrregularitemsfallintosixcategoriesDiscontinuedoperations.Extraordinaryitems.Unusualgainsandlosses.Changesinaccountingprinciple.Changesinestimates.Correctionsoferrors.,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,DiscontinuedOperationsoccurswhen,(a)companyeliminatestheresultsofoperationsandcashflowsofacomponent.thereisnosignificantcontinuinginvolvementinthatcomponent.Amountreported“netoftax.”,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,Illustration:KCCorporationhadaftertaxincomefromcontinuingoperationsof$55,000,000in2008.During2008,itdisposedofitsrestaurantdivisionatapretaxlossof$270,000.Priortodisposal,thedivisionoperatedatapretaxlossof$450,000in2008.Assumeataxrateof30%.PrepareapartialincomestatementforKC.,ReportingDiscontinuedOperations,Incomefromcontinuingoperations$55,000,000,Discontinuedoperations:,Lossfromoperations,netof$135,000tax315,000,Lossondisposal,netof$81,000tax189,000,Netincome$54,496,000,Totallossondiscontinuedoperations504,000,LO4Explainhowtoreportirregularitems.,ReportingDiscontinuedOperations,DiscontinuedOperationsarereportedafter“Incomefromcontinuingoperations.”,Previouslylabeledas“NetIncome”.,Movedto,LO4Explainhowtoreportirregularitems.,Extraordinaryitemsarenonrecurringmaterialitemsthatdiffersignificantlyfromacompanystypicalbusinessactivities.ExtraordinaryItemmustbebothofanUnusualNatureandOccurInfrequentlyCompanymustconsidertheenvironmentinwhichitoperates.Amountreported“netoftax.”,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,AretheseitemsExtraordinary?,(a)Alargeportionofatobaccomanufacturerscropsaredestroyedbyahailstorm.Severedamagefromhailstormsinthelocalitywherethemanufacturergrowstobaccoisrare.(b)AcitrusgrowersFloridacropisdamagedbyfrost.(c)Acompanysellsablockofcommonstockofapubliclytradedcompany.Theblockofshares,whichrepresentslessthan10%ofthepublicly-heldcompany,istheonlysecurityinvestmentthecompanyhaseverowned.,YES,ReportingExtraordinaryItems,NO,YES,LO4Explainhowtoreportirregularitems.,AretheseitemsExtraordinary?,(d)Alargediversifiedcompanysellsablockofsharesfromitsportfolioofsecuritieswhichithasacquiredforinvestmentpurposes.Thisisthefirstsalefromitsportfolioofsecurities.(e)Anearthquakedestroysoneoftheoilrefineriesownedbyalargemulti-nationaloilcompany.Earthquakesarerareinthisgeographicallocation.(f)Acompanyexperiencesamateriallossintherepurchaseofalargebondissuethathasbeenoutstandingfor3years.Thecompanyregularlyrepurchasesbondsofthisnature.,NO,ReportingExtraordinaryItems,YES,NO,LO4Explainhowtoreportirregularitems.,Illustration:KCCorporationhadaftertaxincomefromcontinuingoperationsof$55,000,000in2007.Inaddition,itsufferedanunusualandinfrequentpretaxlossof$770,000fromavolcanoeruption.Thecorporationstaxrateis30%.PrepareapartialincomestatementforKCCorporationbeginningwithincomefromcontinuingoperations.,Incomefromcontinuingoperations$55,000,000,Extraordinaryloss,netof$231,000tax539,000,Netincome$54,461,000,ReportingExtraordinaryItems,($770,000 x30%=$231,000tax),LO4Explainhowtoreportirregularitems.,ExtraordinaryItemsarereportedafter“Incomefromcontinuingoperations.”,Previouslylabeledas“NetIncome”.,ReportingExtraordinaryItems,Movedto,LO4Explainhowtoreportirregularitems.,ReportingIrregularItems,ReportingwhenbothDiscontinuedOperationsandExtraordinaryItemsarepresent.,DiscontinuedOperations,ExtraordinaryItem,LO4Explainhowtoreportirregularitems.,Irregulartransactionssuchasdiscontinuedoperationsandextraordinaryitemsshouldbereportedseparatelyina.bothasingle-stepandmultiple-stepincomestatement.b.asingle-stepincomestatementonly.c.amultiple-stepincomestatementonly.d.neitherasingle-stepnoramultiple-stepincomestatement.,Review,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,UnusualGainsandLossesMaterialitemsthatareunusualorinfrequent,butnotboth,shouldbereportedinaseparatesectionjustabove“Incomefromcontinuingoperationsbeforeincometaxes.”Examplescaninclude:Write-downsofinventoriesForeignexchangetransactiongainsandlossesTheBoardprohibitsnet-of-taxtreatmentfortheseitems.,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,UnusualGainsandLosses,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,Illustration4-9IncomeStatementPresentationofUnusualCharges,ChangesinAccountingPrinciplesRetrospectiveadjustmentCumulativeeffectadjustmenttobeginningretainedearningsApproachpreservescomparabilityExamplesinclude:changefromFIFOtoaveragecostchangefromthepercentage-of-completiontothecompleted-contractmethod,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,ChangeinAccountingPrinciple:GaubertInc.decidedinMarch2010tochangefromFIFOtoweighted-averageinventorypricing.Gaubertsincomebeforetaxes,usingthenewweighted-averagemethodin2010,is$30,000.,Illustration4-10CalculationofaChangeinAccountingPrinciple,Illustration4-11IncomeStatementPresentationofaChangeinAccountingPrinciple(Basedon30%taxrate),PretaxIncomeData,Solutiononnotespage,ChangesinEstimateAccountedforintheperiodofchangeandfutureperiodsNothandledretrospectivelyNotconsiderederrorsorextraordinaryitemsExamplesinclude:UsefullivesandsalvagevaluesofdepreciableassetsAllowanceforuncollectiblereceivablesInventoryobsolescence,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,ChangeinEstimate:ArcadiaHS,purchasedequipmentfor$510,000whichwasestimatedtohaveausefullifeof10yearswithasalvagevalueof$10,000attheendofthattime.Depreciationhasbeenrecordedfor7yearsonastraight-linebasis.In2010(year8),itisdeterminedthatthetotalestimatedlifeshouldbe15yearswithasalvagevalueof$5,000attheendofthattime.Questions:Whatisthejournalentrytocorrecttheprioryearsdepreciation?Calculatethedepreciationexpensefor2010.,NoEntryRequired,ChangeinEstimateExample,LO4Explainhowtoreportirregularitems.,Equipment,$510,000,FixedAssets:,Accumulateddepreciation,350,000,Netbookvalue(NBV),$160,000,BalanceSheet(Dec.31,2009),ChangeinEstimateExample,After7years,Equipmentcost$510,000Salvagevalue-10,000Depreciablebase500,000Usefullife(original)10yearsAnnualdepreciation$50,000,x7years=$350,000,First,establishNBVatdateofchangeinestimate.,LO4Explainhowtoreportirregularitems.,ChangeinEstimateExample,After7years,Netbookvalue$160,000Salvagevalue(new)5,000Depreciablebase155,000Usefulliferemaining8yearsAnnualdepreciation$19,375,DepreciationExpensecalculationfor2010.,Depreciationexpense19,375Accumulateddepreciation19,375,Journalentryfor2010,LO4Explainhowtoreportirregularitems.,CorrectionsofErrorsResultfrom:mathematicalmistakesmistakesinapplicationofaccountingprinciplesoversightormisuseoffactsCorrectionstreatedaspriorperiodadjustmentsAdjustmenttothebeginningbalanceofretainedearnings,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,CorrectionsofErrors:Toillustrate,in2011,HillsboroCo.determinedthatitincorrectlyoverstateditsaccountsreceivableandsalesrevenueby$100,000in2010.In2011,Hillboromakesthefollowingentrytocorrectforthiserror(ignoreincometaxes).,ReportingIrregularItems,LO4Explainhowtoreportirregularitems.,Retainedearnings100,000Accountsreceivable100,000,Relatestheincometaxexpensetothespecificitemsthatgiverisetotheamountofthetaxexpense.Incometaxisallocatedtothefollowingitems:(1)Incomefromcontinuingoperationsbeforetax(2)Discontinuedoperations(3)Extraordinaryitems(4)Changesinaccountingprinciple(5)Correctionoferrors,SpecialReportingIssues,LO5Explainintraperiodtaxallocation.,IntraperiodTaxAllocation,ExtraordinaryGain:SchindlerCo.hasincomebeforeincometaxandextraordinaryitemof$250,000.Ithasanextraordinarygainof$100,000fromacondemnationsettlementreceivedononeitsproperties.Assuminga30percentincometaxrate.,SpecialReportingIssues,LO5Explainintraperiodtaxallocation.,IntraperiodTaxAllocation,Illustration4-13,ExtraordinaryLoss:SchindlerCo.hasincomebeforeincometaxandextraordinaryitemof$250,000.Ithasanextraordinarylossfromamajorcasualtyof$100,000.Assuminga30percentincometaxrate.,SpecialReportingIssues,LO5Explainintraperiodtaxallocation.,IntraperiodTaxAllocation,Illustration4-14,CalculationofTotalTax,ExampleofIntraperiodTaxAllocation,$24,000,(135),(61),(231),$23,573,LO5Explainintraperiodtaxallocation.,Note:lossesreducethetotaltax,Animportantbusinessindicator.Measuresthedollarsearnedbyeachshareofcommonstock.Mustbedisclosedonthetheincomestatement.,SpecialReportingIssues,LO6Identifywheretoreportearningspershareinformation.,Netincome-PreferreddividendsWeightedaveragenumberofsharesoutstanding,EarningsPerShare,EarningsPerShare(BE4-8):In2010,HollisCorporationreportednetincomeof$1,000,000.Itdeclaredandpaidpreferredstockdividendsof$250,000.During2010,Hollishadaweightedaverageof190,000commonsharesoutstanding.ComputeHolliss2010earningspershare.,SpecialReportingIssues,-$250,000,$1,000,000,190,000,=,$3.95pershare,LO6Identifywheretoreportearningspershareinformation.,Netincome-PreferreddividendsWeightedaveragenumberofsharesoutstanding,SpecialReportingIssues,LO6,EPS,Dividebyweighted-averagesharesoutstanding,LO7Preparearetainedearningsstatement.,Increase,NetincomeChangeinaccountingprincipleErrorcorrections,Decrease,NetlossDividendsChangeinaccountingprinciplesErrorcorrections,RetainedEarningsStatement,SpecialReportingIssues,BeforeissuingthereportfortheyearendedDecember31,2011,youdiscovera$50,000error(netoftax)thatcaused2010inventorytobeoverstated(overstatedinventorycausedCOGStobelowerandthusnetincometobehigherin2010).WouldthisdiscoveryhaveanyimpactonthereportingoftheStatementofRetainedEarningsfor2011?,SpecialReportingIssues,LO7Preparearetainedearningsstatement.,SpecialReportingIssues,LO7Preparearetainedearningsstatement.,Solutiononnotespage,RestrictedRetainedEarningsDisclosedInnotestothefinancialstatementsAsAppropriatedRetainedEarnings,LO7Preparearetainedearningsstatement.,SpecialReportingIssues,ComprehensiveIncomeAllchangesinequityduringaperiodexceptthoseresultingfrominvestmentsbyownersanddistributionstoowners.Includes:allrevenuesandgains,expensesandlossesreportedinnetincome,andallgainsandlossesthatbypassnetincomebutaffectstockholdersequity.,LO7Preparearetainedearningsstatement.,SpecialReportingIssues,SpecialReportingIssues,OtherComprehensiveIncome,Unrealizedgainsandlossesonavailable-for-salesecurities.Translationgainsandlossesonforeigncurrency.Plusothers,+,ReportedinStockholdersEquity,ComprehensiveIncome,LO8Explainhowtoreportothercomprehensiveincome.,Review,Gainsandlossesthatbypassnetincomebutaffectstockholdersprehensiveincome.b.othercomprehensiveincome.c.priorperiodincome.d.unusualgainsandlosses.,SpecialReportingIssues,LO8Explainhowtoreportothercomprehensiveincome.,ThreeapproachestoreportingComprehensiveIncome(SFASNo.130,June1997):Asecondseparateincomestatement;Acombinedincomestatementofcomprehensiveincome;orAspartofthestatementofstockholdersequity,SpecialReportingIssues,LO8Explainhowtoreportothercomprehensiveincome.,SpecialReportingIssues,LO8Explainhowtoreportothercomprehensiveincome.,Illustration4-19,ComprehensiveIncomeSecondincomestatement,SpecialReportingIssues,LO8Explainhowtoreportothercomprehensiveincome.,ComprehensiveIncomeCombinedincomestatement,SpecialReportingIssues,LO8Explainhowtoreportothercomprehensiveincome.,ComprehensiveIncome-StatementofStockholdersEquity,Illustration4-20,SpecialReportingIssues,LO8Explainhowtoreportothercomprehensiveincome.,ComprehensiveIncome-BalanceSheetPresentation,Illustration4-21,Regardlessofthedisplayformatused,theaccumulatedothercomprehensiveincomeof$90,000isreportedinthestockholdersequitysectionofthebalancesheet.,Review,TheFASBdecidedthatthecomponentsofothercomprehensiveincomemustb