Contents Cover Title Page Copyright Preface About the Author Free On-Line Resources by Steve Bragg Part I: Revenue and Expenses Chapter 1: Revenue Recognition Introduction Revenue Recognition Rules Impact of Goods Ownership on Revenue Recognition Advertising Barter Transactions Construction Contract Revenue Recognition Customer Loyalty Program Revenue Recognition Franchise Fee Revenue Recognition Professional Services Revenue Recognition Services Revenue Recognition Disclosures Chapter 2: Employee Benefits Introduction Types of Employee Benefits Definitions Short-Term Employee Benefits Accounting for Short-Term Employee Benefits Accounting for a Short-Term Compensated Absence Accounting for a Profit Sharing or Bonus Plan Accounting for a Multi-Employer Plan Accounting for a Defined Contribution Plan Accounting for a Defined Benefit Plan Accounting for Actuarial Gains and Losses Accounting for the Return on Plan Assets Accounting for Past Service Cost Accounting for Plan Assets Accounting for Curtailments and Settlements Defined Benefit Plan Amounts Appearing in Profit or Loss Discount Rate Used in Actuarial Assumptions Present Value Method Used for Defined Benefit Plan Calculations Attributing Benefit to Periods of Service Accounting for Other Long-Term Employee Benefits Accounting for Termination Benefits Disclosures for a Defined Benefit Plan Chapter 3: Share-Based Payments Introduction Share-Based Payments Settled With Equity Share-Based Payments Settled With Cash Share-Based Payments Settled With Cash Alternatives? Determining the Fair Value of an Equity Instrument The Impact of Vesting on Service Recognition Modification of the Terms of a Share-Based Payment Other Share-Based Payment Issues Disclosures Chapter 4: Income Taxes Introduction Income Tax Terminology Tax Planning Tax Assets and Liabilities Initial Creation of a Temporary Difference Taxable Temporary Differences Taxable Temporary Differences Related to Goodwill Deductible Temporary Differences Unused Tax Losses and Unused Tax Credits The Tax Effects of a Business Combination The Tax Impact of Investments in Other Entities Other Tax Issues Offsetting of Tax Assets and Liabilities Disclosures Part II: Assets and Liabilities Chapter 5: Financial Instruments Introduction Definitions Initial Accounting for a Financial Asset or Liability Subsequent Accounting for a Financial Asset or Liability Derecognition of a Financial Asset or Liability The Effective Interest Method How to Derive the Fair Value of a Financial Asset or Liability Accounting for a Change in Carrying Cost Accounting for a Fair Value Change in a Financial Asset Accounting for Financial Asset Impairment Qualifying for a Hedging Relationship Accounting for a Fair Value Hedge Accounting for a Cash Flow Hedge Accounting for a Net Investment Hedge Designating a Non-Financial Item as a Hedged Item Disclosures in the Statement of Financial Position–Financial Instruments Disclosures in the Statement of Comprehensive Income– Financial Instruments Disclosures–Hedging Disclosures–Fair Value Disclosures–Financial Instrument Risks Chapter 6: Interests in Joint Ventures Introduction Significant Influence Types of Joint Ventures Accounting for a Jointly Controlled Operation Accounting for Loss of Control in a Joint Venture Accounting for a Non-Monetary Contribution to a Joint Venture Accounting for Transactions Between a Venturer and a Joint Venture Accounting for Jointly Controlled Assets Disclosures Chapter 7: Investments in Associates Introduction Qualification as an Investment in an Associate Accounting for an Investment in an Associate Related Reporting Issues When to Stop Using the Equity Method Upstream and Downstream Transactions With an Associate Disclosures Chapter 8: Inventory Introduction Definitions Costs to Include in Inventory Inventory Measurement Systems Allocation of Overhead Costs to Inventory Writing Down the Value of Inventory Allocating Production Costs to Byproducts Disclosures Chapter 9: Property, Plant, and Equipment Introduction Definitions Costs to Include in PP&E Costs Not to Include in PP&E The Inclusion of Borrowing Costs in PP&E The Residual Value of an Asset Accounting for an Asset Exchange Subsequent PP&E Measurements Accounting for Asset Revaluations Assets Not Subject to Depreciation The Depreciation Time Period Types of Depreciation Methods Depreciating Revalued Items Accounting for a Derecognized Asset Disclosures Chapter 10: Intangible Assets Introduction Recognition of Intangible Assets Recognition of Acquired Intangible Assets Recognition of Intangible Assets Acquired in a Business Combination Website Development Costs Research and Development Expenditures Subsequent Recognition of Intangible Assets Recognition of Intangible Asset Revaluations Determining the Useful Life of an Intangible Asset Intangible Asset Amortization Disclosures Chapter 11: Asset Impairment Introduction Definitions Applicable Assets The Impairment Test Impairment Test Source Information: Fair Value less Costs to Sell Impairment Test Source Information: Recoverable Value Impairment Test Source Information: Cash Flow Projections Reuse of Prior Period Impairment Calculations Reversal of an Impairment Loss Goodwill Impairment Testing Reversal of a Goodwill Impairment Loss Disclosures for Asset Classes Disclosures for Recognized or Reversed Impairment Losses Disclosures for Estimations of Recoverable Amounts Disclosures for Allocated Goodwill or Intangible Assets Chapter 12: Provisions and Contingencies Introduction Definitions Accounting for a Contingent Liability Accounting for a Provision Measurement of a Provision Accounting for a Provision Reimbursement Provisions for Onerous Contracts The Impact of Future Events on a Provision Restructuring Provisions Provision Adjustments Accounting for a Contingent Asset Disclosures Part III: The Financial Statements Chapter 13: Financial Statements Presentation Introduction Definitions Contents of the Financial Statements Contents of the Statement of Financial Position Contents of the Statement of Comprehensive Income Contents of the Statement of Changes in Equity Contents of the Statement of Cash Flows Disclosures–General Disclosures–Comparative Information Chapter 14: Consolidated and Separate Financial Statements Introduction Definitions When to Use Consolidation The Financial Statement Consolidation Process Consolidating a Special Purpose Entity Reporting Changes if there is a Loss of Control Disclosures Chapter 15: Related Party Disclosures Introduction Definition of a Related Party Disclosures Chapter 16: Events after the Reporting Period Introduction Accounting for Adjusting Events After the Reporting Period Accounting for Non-Adjusting Events After the Reporting Period Accounting for Dividends Declared After the Reporting Period Accounting for a Going Concern Issue that Arises After Period-End Disclosure Chapter 17: Financial Reporting in Hyperinflationary Economies Introduction Designating an Economy as Hyperinflationary How to Restate Financial Results Selecting a General Price Index Disclosures Part IV: Public Company Reporting Chapter 18: Operating Segments Introduction Definition of an Operating Segment Criteria for Reporting Operating Segments When to Restate Segment Information Disclosures of Segment Information Disclosures of Reconciling Information Disclosures About Products and Services Disclosures About Geographical Areas Disclosures About Major Customers Chapter 19: Earnings per Share Introduction Basic Earnings per Share Diluted Earnings per Share Retrospective Changes to Earnings per Share Earnings per Share Presentation Disclosures Chapter 20: Interim Financial Reporting