本书是MBA适用的财务会计教材。书中十分强调计量技巧，正如书中所言 不掌握计量技巧而使用财务报表，就像不懂单词却翻译一样荒谬 ，因而本书提供了广泛的技术而且全文自始至终贯彻了这一宗旨。作者也给予了经济因素足够的重视，作者认为 不理解财务会计所依存的经济环境，财务会计形同虚设、毫无意义 。因此，书中包含了对实际公司事务的经常性指导；从著名的商业出版物和公司的年度报告中的引述；关于管理者对财务报告的激励和影响等问题比较深入的讨论，等等。

本书在多年的使用中深受读者喜爱，被列为美国大学MBA的标准教材。

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Table of Contents

The Institutional Setting and

Fundamental Accounting Concepts

1 The Institutional Setting and the

Development of Financial Reporting

Standards

The Focus on Financial Infonnation

Standard-Setting Organizations in the United

States

The American Institute of Certified Public

Accountants

The Financial Accounting Standards

Board

The Securities and Exchange

Commission

Other Influential Organizations

Intemational Standard-Setting

Organizations

Appendix lA A Brief Summary of Key

EU Objectives

Appendix 1B lASC Accounting

Standards

2 Fundamental Accounting Concepts and

the Conceptual Framework

Accounting Fundamentals

Purpose of Accounting

The Accounting Equation

Accrual Accounting

The Conceptual Framework

Financial Reporting Objectives

Qualitative Characteristics of Accounting

Information

Recognition and Measurement

Other Accepted Accounting Concepts

Intemational Considerations

Appendix 2A A Review of the Accounting

Cycle

Comprehensive Dlustration: Allen

Corporation

Case 2-1: The Garden Center, Inc. (A)

Case 2-2: The Garden Center, Inc. (B)

Case 2-3: Flowtron, Inc.

Case 2-4: Wattle Creek Winery

The Measurement and Reporting

of Income, Financial Position,

and Cash Flows

3 Revenue Recognition, Receivables, and

the Income Statement

The Income Statement

Revenue Realization and Recognition

Criteria for Recognition

Recognition Methods

Special Industry Methods

Revenue Adjustments

Creative Recognition Methods

Financial Analysis

Profitability Analysis

Asset Management

Analysis of Risk

Intemational Considerations

Dlustrative Case: Sybra, Inc.

Case 3-1: Diamondback Construction

Company

Case 3-2: Crcdit & Collection

Corporation

Case 3-3: A. H. Robins Company, Inc.-Trade

Receivables

Case 3-4: Informix Corporation

Case 3-5: Candela Laser Corporation

4 The Balance Sheet

Elements of the Balance Sheet

Assets

Liabilities

Minority Interest

Stockholders' Equity

Balance Sheet Analysis

Intemational Considerations

Dlustrative Case: Merck & Company

Inc.

Case 4-1: Balance Sheets Tell a Story

Case 4-2: Deerc and Caterpillar

Case 4-3: Balance Sheets Across

Industries

Case 4-4: Auto Company Balance Sheets-

intemational

5 The Statement of Cash Flows

Importance of Cash Flow

Preparing a Statement of Cash Plows

Methods of Prcparing a SCF

Operating Activities

Investing Activities

Financing Activities

Relational Insights

Cash Flow Analysis

Intemational Considerations

lUustrative Case: Whirlpool Corporation

Appendix 5A An Example of Prcparing a

Statement of Cash Flows Using the

Indirect Method: The La-Z-Boy Chair

Company

Case 5-1: Monsanto Company

Case 5-2: Compton Computing Systems

(A)

Case 5-3: Compton Computing Systems

(B)

Case 5-4: Southland Corporation

Case 5-5: Campbell Soup Company

Case 5-6: The Regina Company

Case 5-7: Bethlehem Steel Corporation

6 Corporate Accountability and the

Independent Auditor

Corporate Accountability

Fraudulent Financial Reporting

Opinion Shopping

The Independent Auditor

Auditor's Report

Investigation and Detection of Fraud

Other Audit Communications

Intemational Considerations

Financial Reporting, Efficient Capital Markets,

and a Positive Theory of

Accounting

Prospective Information

Case 6-1: Datapoint Corporation

Case 6-2: The Leslie Pay Companies

Case 6-3: Mattel, Inc.

Case 6-4: The Regina Company (A)

Case 6-5: MiniScribe Corporation (B)

PART3

The Measurement and Reporting

ofAssets

7 Inventories and the Cost of Goods

Sold

Accounting for Inventories

Inventory Quantities

Inventory Costs .--

Changes in Inventory Methods

Standard Costs

Lower of Cost or Market (LCM)

Financial Analysis

Intemational Considerations

Dlustrative Case: The Oliver company

Dlustrative Case: Champion Spark Plug

Company

Case 7-1: Paragon Electronics, Inc.-lnventory

Cost Plow

Case 7-2: A. H. Robins Company-

Inventory (A)

Case 7-3: A. H. Robins Company-

Inventory (B)

Case 7-4: A. H. Robins Company-

Inventory (C)

Case 7-5: Holland Corporation

Case 7-6: Wrencroft Appliance

Company

Case 7-7: Tonka Corporation-Hasbro

Inc.

Case 7-8: Packaging and Containers,

Inc.

8 Marketable Securities and Intercorporate

Investments

Short-Term Intercorporate Investments

Intemational Considerations

Long-Term Intercorporate Investments

Passive Investments

Active Investments

Other Investments

Intemational Considerations

Consolidated Financial Reporting

Business Combinations; Legal

Considerations

DlustratioD

Intemational Considerations

Financial Analysis

Dlustrative Case: BF Corporation

Case 8-1: San Antonio Enterprises

Case 8-2: UFS Corporation

Case 8-3: Bristol-Myers/Squibb

Case 8-4: Philip Moms/Kraft

Case 8-5: Elmendorf Communications

Case 8-6: The AT&T-NCR Merger

Case 8-7: intemational Acquisitions, Inc.

9 Noncurrent Assets and

Amortization

Accountmg Overview

Fixed Assets

Amortization

Betterment Accountmg

Intemational Considerations

Intangible Assets

Amortization

Tax Considerations

Intemational Considerations

Natural Resources

Cost Capitalization

Amortization

Other Noncurrent Assets

Financial Analysis

Accounting Changes

lllustrative Case: Texas Land

Corporation

Case 9-1: West Virginia Coal Company

Case 9-2: Amencan Toy Company-The

Zapper

Case 9-3: Consolidated Jewelry, Inc.

Case 9-4: Accounting for Noncurrent Assets:

Three Examples

Case 9-5: Hamischfeger Corporation

Case 9-6: British Airways PLC

Case 9-7: SANTOS, Ltd.

Case 9-8: The Restructuring of Wheeling

Pittsburgh

PART4

The Measurement and Reporting

ofLiabilities

lO Fundamental Concepts in Liability

Valuation and Reporting 497

Characteristics of Liabilities

Current Liabilities

Debt Refinancing

Callable (Redeemable) Debt

Long-Tenn Liabilities

Valuation of Notes

More on Premiums/Discounts

Exdnguishment of Debt

Convertible Debt

Debt Restructuring

Risk: An Expanded Notion ot Liability

Financial Analysis

Intemational Considerations

Dlustrative Case: Leslie Corporadon

Appendix lOA Present Value Concepts

Appendix lOB Derivative Instruments

Appendix lOC Hedge Accounting

Case l0-l: R. J, Miller, Inc.

Case l0-2: How Much Is Enough: Assessing

Personal Financial-Planning Needs

Case l0-3: McDonald's Corporation

Case 10-4: Columbia Gas Systems, Inc.

Case 10-5: Bradlees, Inc.

ll Financial Commitments and

Contingendes

Accounting and Economic Liabilities

Commitments and Contingencies

Commitments

Contingent Liabilities

Leases

Controversy

Capital Leases

Financial Statement Disclosurc

Accounting and Reporting by

Lessors

Off-Balance-Sheet Financing

Financial Analysis

Intemational Considerations

Dlustrative Case: Sybra, Inc. (B)

Case ll-l: Catur Federal Savings and Loan-

Lease Options

Case 11-2: Freeport Steel Corporation

Case ll-3: Manville Corporation

Case ll-4: Accounting fpr Leases: The Airline

Industry

Case ll-5: Alannas Avancados, S.A

Case 11-6: Special Electronics, Inc.

Casell-7GlobalUmted,Ino

12 Pensions and Other Postretirement

Benefits

Pensions

Pension Accounting

SFAS 87 and the Income Statement

SFAS 87 and the Balance Sheet

SFAS 87 Dlustrated

Special Examples of SFAS 87

Plan Terminations and Asset

Reversions

Funding Implications

Postretirement Benefits Other Than

Pensions

Financial Analysis

Intemational Considerations

Dlustrative Case: Snap-on Tools

Corporation

Appendix 12A Actuarial Cost Methods

Appendix 12B Major Provisions of the

Employee Retirement Income Security Act

of 1974

Appendix 12C Pension and Other

Postretirement Benefits Glossary

Case 12-l: Dunlap Corporation

Case 12-2: Michigan Metals

Corporation

Case 12-3: NL Industries, Inc.

Case 12-4: Fichthom Manufacturing

Company

Case l2-5: Cortland Sportswear, Inc.

Case 12-6: Bethlehem Steel: Understanding

Pension Fund Disclosures

13 Income Taxes and Business

Decisions

Business Taxes

Accountmg for Income Taxes

Differences Between Tax Accounting and

Financial Reporting

Some Necessary Background

Contemporary Accountmg for Income

Taxes

The Importance of Taxes in Business

Decisions

Tax Planning

Fonn of Business Orgamzation

Business Location

Mergers and Acquisitions

The Financial Reporting/Income Tax

Interface

Financial Analysis

Intemational Considerations

Dlustrative Case: H. J. Heinz Company

Appendix BA Incomc Tax Consideration of

Mergers and Acquisitions

Appendix 13B Taxes Other Than Federal

Income Taxes

Case 13-l: Heplewhite Manufacturing

Company

Case 13-2: Allweather Broadcasting

Company

Case 13-3: H. J. Heinz Company (B)

Case 13-4: Delta Woodside Industries,

Inc. 712

The Measurement and Reporting of

Stockholders' Equity

14 Stockholders'Equity

Capital Stock

Common Stock

Preferred Stock

Capital in Excess of Par or Stated

Value

Other Equity Accounts

Retained Eamings

Dividends and Stock Splits

Cash Dividends

Stock Dividends

Stock Splits

Treasury Stock

Stock Warrants

Employee Stock Options and Compensation

Plans

Eamings per Share

Primary and Full Duutea

Basic and Diluted

Comprehensive Income

Financial Analysis

Intemational Considerations

Illustrative Case: Caterpillar, Inc.

Case 14-l: Westinghouse Electric

Company

Case l4-2: Peoples Savings Association

Case l4-3: intemational Business Machines:

Improvmg Big Blue's Flat EPS

Case l4-4: Ratios TeU a Story-l995

Case l4-5: LVMH: Moet Hennessy Louis-

Vuitton

PART6

Selected Reporting and Disclosure Issues

and Assessing the Quality of Reported

Earnings and Financial Position

15 Selected Reporting and

Disclosure Issues

Experimenting with the Financial Reporting of

Changing Prices

Changing Prices and the FASB

Accounting for Foreign Operations

Foreign Currency Translation

Business-Segment Reporting

Addressing the Needs of the 1970s and the

1980s

Addressing the Needs of the 1990s and

Beyond

Interim Financial Reporting

Financial Analysis

Intemational Considerations

Illlustrative Case: Champion Intemational

Corporation

Case 15-l: May's Plumbing Service

Case 15-2: The Tale of Three Profits

Case 15-3: Global Communications, Inc

Case 15-4: Moon Computers, Inc.

Case 15-5: The Trump Taj Mahal

Case 15-6: Aracruz Celulose S.A.

Case l5-7: National Cabinet Lock of Canada,

Inc.

16 Assessing the Quality of Reported

Earnings and Financial Position

Financial Ratio Insights

Cash Flow Insights

Income Statement I

Insights

Revenue Recognition

Expense Recognition

Single-Event Phenomena

Sources of Additional Insighl

Company-Generated Insights

Noncompany-Generated Insights

Intemational Considerations

mustrative Case: A "What If" Exercise

Case 16-1: America Online, Inc.

Case l6-2: Thousand Trails, Inc. (A)

Case 16-3: Silverado and Lincoln Savings and

Loans

Case 16-4: MiniScribe Corporation

Case 16-5: Blockbuster Entertainment

Corporation (B)

Case 16-6: Daimler-Benz: Accounting for

Reserves

Index

Extemal users rely on financial information to help them make a variety of com-

parisons as part of their decision-making process. To elaborate:



Most, if not all, use of accounting information involves making comparisons--compari-

sons from period to period, comparisons among different enterprises, comparisons with

some standard, such as a budget, comparisons with covenants, such as those in bond inden-

tures or other financing agreements, comparisons with competitors, comparisons with regu-

latory requirements, and other comparisons, including comparisons with what an informed

citizen merely perceives to be good, acceptable, or bad in a capitalistic society. Valid com-

parisons are possible only when they are made using comparable infonnation.'



Accounting standards are necessary to provide the guidelines that make meaningful

comparisons of the financial consequences of business activities possible.



This chapter provides an overview of the historical development of financial ac-

counting and reporting standards in the United States and of the emerging importance

and development of intemational accounting and reporting standards. With respect to

the United States, which is the primary focus, it includes a discussion of the institu-

tions, both private and public, that have played a significant role in the standard-

setting process. Its principal focus is the establishment of financial accounting and

reporting standards that provide the basis from which extemal financial statements

and their related footnotes are prepared. These statements are prepared by, and arc

the responsibility of, corporate managers. Although these managers also use this in-

fomation for intemal decision-making purposes, they are free to collect and use

whatever financial information they deem relevant. Such infonnation may or may not

be in accordance with the "generally accepted accounting principles" (GAAP) used

for extemal reporting:



Management accounting and financial reporting do have different focuses and perspec-

tives. Accordingly, some financial accounting standards will not necessarily meet some of

the company's management accounting objectives2



Consequently, numerous additional financial reports and statements are typically

prepared by managers to analyze product-line and geographic profitability, evaluate

make-or-buy altematives, decide about new-product introductions, and make numer-

ous other decisions for which financial information is useful. Nevertheless, extemal

financial statements are still the primary means by which corporate managers com-

municate financial information to present and future creditors and investors.

In addition to differences in the financial information prepared for and used by

extemal versus intemal users, a different set of information is also needed for the

preparation of corporate income tax retums. Here the rules of the game are the ever-

changing tax laws that are passed by Congress and administered by the Intemal Rev-

enue Service. While relying to a large extent on GAAP, the tax laws require treating

some things differently than is done for financial accounting purposes.



In effect, then, U.S. corporadons typically maintain at least three sets of books-

one for extemal repordng purposes, one for intemal purposes, and one for tax pur-

poses. Fortunately, informadon technology has simplified this task. Although this text

will address both the management and tax implicadons of many of the issues pre-

sented, the primary focus throughout is extemal financial accoundng and repordng.



The Focus on Financial Information



The origin of contemporary financial accoundng and repordng lies in the 15th cen-

tury and the development of double-entry record-keeping by Renaissance merchants

to keep track of their business acdvides.' The system was designed to provide infor-

madon about economic resources, owners' investments, and obligadons to creditors,

as well as to measure the results of business transacdons. Believing that a common

measuring unit would gready facilitate the recording and communicadon process,

these merchants selected the monetary unit as the most appropriate choice, because

they thought about their investments and the results of their business acdvides in

terms of cash. The system of measuring economic resources, obligadons, and acdvi-

des in financial terms was the beginning of what is known today as financial account-

ing and repordng.



For hundreds of years, businesses have condnued to use the monetary unit as the

basis for measuring their resources, obligadons, and results of operadons, despite the

fact that most economic resources are not in the form of cash, and exchanges of

goods and services are not inherently financial. Although goods and services can be,

and often are, exchanged for cash, to express them in monetary terms requires a

transformadon that is somewhat ardficial, albeit useful. The danger of this process is

that extemal users of the resuldng financial representadons, by placing unwarranted

trust in the accuracy of the numbers, may fail to consider the numerous assumpdons,

esdmates, and judgments that the financial accoundng and reporting process entails.