CHAPTER 1 An Introduction to Accounting Theory 1
Accounting Theory and Policy Making 4
The Role of Measurement in Accounting 6
Summary 11
Appendix 1-A:Valuation Systems 12
Questions 23
Cases,Problems,and Writing Assignments 24
Bibliograp?y of Referenced Works 26
CHAPTER 2 Accounting Theory and Accounting Research 27
Accounting Research and Scientific Method 28
Is Accounting an Art or a Science? 36
Directions in Accounting Research 39
Summary 47
Questions 48
Cases,Problems,and Writing Assignments 50
Bibliograp?y of Referenced Works 50
CHAPTER 3 Development of the Institutional Structure of Financial Accounting 54
Accounting in the United States Prior to 1930 55
The Formative Years,1930-1946 57
The Postwar Period,1946-1959 60
The Modern Period,1959 to the Present 64
Summary 81
Questions 82
Cases,Problems,and Writing Assignments 83
Bibliograp?y of Referenced Works 85
CHAPTER 4 The Economics of Financial Reporting Regulation 88
Unregulated Markets for Accounting Information 89
Regulated Markets 92
The Paradox of Regulation 99
The Regulatory Process 101
Toward a Political Economy of Accounting 106
Summary 108
Questions 109
Cases,Problems,and Writing Assignments 110
Bibliograp?y of Referenced Works 112
CHAPTER 5 Postulates,Principles,and Concepts 116
Postulates and Principles 117
Basic Concepts Underlying Historical Costing 123
Equity Theories 136
Summary 142
Appendix 5-A:The Basic Postulates of Accounting(ARS 1) 143
Appendix 5-B: A Tentative Set of Broad Accounting Principles for Business Enterprises(ARS 3) 144
Questions 148
Cases,Problems,and Writing Assignments 149
Bibliograp?y of Referenced Works 150
CHAPTER 6 The Search for Objectices 154
ASOBAT 155
APB Statement 4 162
The Trueblood Report 165
SATTA 171
User Objectives and User Diversity 176
Summary 182
Questions 183
Cases,Problems,and Writing Assignments 183
Bibliograp?y of Referenced Works 184
CHAPTER 7 The FASB s Conceptual Framework 187
The Conceptual Framework 188
The Conceptual Framework as a Codificational Document 210
Summary 213
Questions 214
Cases,Problems,and Writing Assignments 215
Bibliography of Referenced Works 215
CHAPTER 8 Usefulness of Accounting Information to Investors and Creditors 218
Accounting Data and Models of Firm Valuation 219
The Value of Accounting Information for Investors 221
Accounting Information and Cross-Sectional Valuation Models 233
The Role of Auditing in the Financial Reporting Process 234
Accounting Data and Creditors 236
The Usefulness of Accounting Allocations 237
Summary 238
Appendix 8-A: Information Evaluation 239
Questions 244
Cases,Problems,and Writing Assignments 245
Bibliograp?y of Referenced Works 247
CHAPTER 9 Uniformity and Disclosure:Some Policy-Making Directions 254
Uniformity 256
Disclosure 267
Directions of the Standard-Setting Process 279
Summary 281
Questions 282
Cases,Problems,and Writing Assignments 284
Bibliograpby of Referenced Works 287
CHAPTER 10 The Income Statement 290
The Relationship Between the Balance Sheet and Income ?tatement 291
Income Definitions 296
Revenues and Gains 297
Expenses and Losses 300
Future Events and Accounting Recognition 303
Current Operating Versus All-Inclusive Income 306
Nonoperating Sections 308
Earnings Per Share 314
Specialized Subjects Concerning Income Measurement 316
Earnings Management 319
Summary 323
Questions 323
Cases,Problems,and Writing Assignments 325
Bibliograp?y of Referenced Works 327
CHAPTER 11 The Balance Sheet 331
Assets 332
Liabilities 348
Owners Equity 354
Financial Instruments and Off-Balance-Sheet Transactions 360
Classification in the Balance Sheet 366
Summary 368
Questions 369
Cases,Problems,and Writing Assignments 370
Bibliograp?y of Referenced Works 374
CHAPTER 12 Statement of Cash Flows 378
Logic Underlying the Statement of Changes in Financial Position 379
The Move to a Cash Flow Statement 383
Requirements of the Cash Flow Statement 386
Criticism of SFAS No.95 388
Cash and Funds Flow Research 390
Summary 391
Questions 392
Cases,Problems,and Writing Assignments 393
Bibliograp?y of Referenced Works 397
CHAPTER 13 Accounting for Inflation and Changing Prices 399
History of Accounting for the Effects of Changing Prices in the United States Prior to SFAS No.33 401
Constructing Price Indexes 403
An Overview of Inflation Accounting 406
Income Measurement Systems 414
Provisions of SFAS No.33 and Rejection in SFAS Nos.82 and 89 427
Special Problems in Measurement and Valuation 430
Summary 437
Appendix 13-A: The Double Counting Effect with Current Costs 438
Questions 441
Cases,Problems,and Writing Assignments 442
Bibliograp?y of Referenced Works 444
CHAPTER 14 Income Taxes and Financial Accounting 446
Income Tax Allocation 447
Modified Accelerated Cost Recovery System 458
The Asset-Liability Orientation of SFAS No.109 461
Summary 466
Appendix 14-A:Investment Tax Credit 467
Questions 472
Cases,Problems,and Writing Assignments 473
Bibliograp?y of Referenced Works 474
CHAPTER 15 Oil and Gas Accounting 477
Conceptual Differences Between FC and SE 480
Standard Setting for Oil and Gas Accounting 482
Reserve Recognition Accounting(RRA) 493
Current Status of Accounting in the Oil and Gas Industry 496
Summary 498
Questions 499
Cases,Problems,and Writing Assignments 500
Bibliograp?y of Referenced Works 503
CHAPTER 16 Pensions and Other Postretirement Benefits 506
Overview of Pension Plans 507
Development of Pension Accounting Standards 515
Postretirement Benefits Other than Pensions 526
Summary 532
Appendix 16-A: Illustration of Pension Expense Determination and Actuarial Funding Methods 533
Questions 541
Cases,Problems,and Writing Assignments 542
Bibliograp?y of Referenced Works 544
CHAPTER 17 Leases 547
The Lease Contract 548
Lease Capitalization 552
The Evolution of Lease Accounting Standards 555
Assessing SFAS No.13 570
Economic Consequences of Lease Capitalization 571
Summary 574
Questions 575
Cases,Problems,and Writing Assignments 576
Bibliograp?y of Referenced Works 582
CHAPTER 18 Intercorporate Equity Investments 584
Relevant Circumstances 585
Consolidation 587
The Equity Method 596
The Fair Value Method 597
Proportionate Consolidation 598
Defining the Reporting Entity 600
Summary 603
Questions 604
Cases,Problems,and Writing Assignments 605
Bibliograpby of Referenced Works 607
CHAPTER 19 Issues in International Accounting 610
Translation of Foreign Operations 611
National Accounting Differences 618
International Harmonization of Accounting Standards 629
Summary 638
Questions 639
Cases,Problems,and Writing Assignments 640
Bibliograp?y of Referenced Works 641
Index 645