Master Financial Accounting Theory, Standards, and Applications with Expert Insights and Case Studies
Understanding the theoretical foundations of financial accounting is crucial for navigating today’s complex and evolving financial landscape. In the fifteenth edition of Financial Accounting Theory and Analysis: Text and Cases, a team of distinguished accounting scholars explores how accounting standards shape financial reporting choices and analyzes the characteristics of firms based on their accounting methods.
With comprehensive discussions on key frameworks and professional standards, students gain a deep understanding of the principles guiding accounting practice. Through a combination of rigorous theoretical analysis, empirical research, and real-world case studies, this leading textbook strengthens students’ critical thinking and decision-making skills while providing future professionals with the analytical and ethical foundation needed to succeed in today’s global financial environment.
Providing essential knowledge for careers in financial reporting, auditing, and corporate finance, Financial Accounting Theory and Analysis: Text and Cases is ideal for senior undergraduate and graduate courses in Financial Accounting Theory, Advanced Financial Accounting, and Accounting Research.
NEW TO THIS EDITION
Up-to-date coverage of the FASB and IASB Conceptual Frameworks New sections on sustainability reporting and ESG (Environmental, Social, and Governance) accounting Revised analyses of all FASB and IASB standards, including recent amendments New section on financial engineering, special purpose entities, and variable interest entities New insights on joint ventures, incorporating the latest Accounting Standards Update (ASU) Enhanced case studies and disclosure examples using current financial statements Expanded discussion of the FASB Agenda Consultation initiative Updated international accounting sections to reflect recent IASB changes New tutorial on using the FASB Accounting Standards Codification for research and application Expanded test bank with over 300 multiple-choice questions and 250 essay questions for instructors, including 200 entirely new questions
WILEY ADVANTAGE
Prepares students for professional careers by bridging theoretical concepts with practical applications Provides a comprehensive exploration of accounting theory and its impact on financial reporting Integrates real-world case studies to enhance critical thinking and application skills Covers the latest FASB and IASB standards, ensuring up-to-date knowledge of financial regulations Examines key financial theories such as the efficient markets hypothesis (EMH) and behavioral finance model Strengthens analytical skills with in-depth discussions on accounting methods and corporate decision-making Enhances learning with updated financial statement analyses using real-world companies such as Hershey and Tootsie Roll Supports instructors with a comprehensive Solutions Manual and a wealth of instructor resources for streamlined teaching
Preface, xi 1 The Development of Accounting Theory, 1 The Early History of Accounting, 2 Accounting in the United States Since 1930, 5 The Role of Ethics in Accounting, 21 International Accounting Standards, 25 2 The Pursuit of the Conceptual Framework, 30 The Early Theorists, 30 Professional Organizations' and Authoritative Standard-Setting Bodies' Contributions, 32 Committee on Accounting Procedure, 33 Accounting Principles Board, 33 A Statement of Basic Accounting Theory, 36 The Trueblood Committee, 37 Statement on Accounting Theory and Theory Acceptance, 39 The FASB's Original Conceptual Framework Project, 42 International Cooperation, 44 Principles-Based Versus Rules-Based Accounting Standards, 61 International Convergence, 65 3 International Accounting, 78 International Business Accounting Issues, 79 he Development of Accounting Systems, 79 Preparation of Financial Statements for Foreign Users, 81 The International Accounting Standards Committee, 81 The Uses of International Accounting Standards, 93 The IASC and the IOSCO, 94 The IASB Annual Improvements Project, 96 IASB–FASB Convergence, 96 The Effects of International Versus US GAAP Accounting Standards, 97 Standards Overload, 100 Framework for the Preparation and Presentation of Financial Statements, 102 The IASB–FASB Financial Statement Presentation Project, 111 4 The Status, Development and Uses of Financial Reporting, 119 The Financial Reporting Environment, 119 Research Methodology, 122 The Outcomes of Providing Accounting Information, 125 The Relationship Among Accounting Research, Education, and Practice, 155 5 Income Concepts, Revenue Recognition, and Other Methods of Reporting, 162 The Nature of Income, 163 Economic Versus Accounting Income, 167 Revenue Recognition, 169 Matching, 188 Income Recognition Constraints, 190 Non-GAAP Measures of Performance, 192 Sustainability Reporting, 194 Earnings Quality, Earnings Management, and Fraudulent Financial Reporting, 205 International Accounting Standards, 211 6 Financial Statement I: The Income Statement, 227 The Economic Consequences of Financial Reporting, 227 Income Statement Elements, 227 Statement Format, 229 The Value of Corporate Earnings, 254 International Accounting Standards, 259 7 Financial Statements II: The Balance Sheet and the Statement of Cash Flows, 273 The Balance Sheet, 274 Fair Value Measurements, 285 Evaluating a Company's Financial Position, 292 The Statement of Cash Flows, 295 Financial Analysis of Cash-Flow Information, 306 International Accounting Standards, 307 8 Working Capital, 321 Development of the Working Capital Concept, 321 Current Usage, 323 Components of Working Capital, 323 Working Capital Management, 335 International Accounting Standards, 343 9 Long-Term Assets I: Property, Plant, and Equipment, 350 Property, Plant, and Equipment, 350 Financial Analysis of Property, Plant, and Equipment, 355 Cost Allocation, 355 Capital and Revenue Expenditures, 359 Recognition and Measurement Issues, 359 Impairment of Value, 360 Accounting for Asset Retirement Obligations, 362 International Accounting Standards, 365 10 Long-Term Assets II: Investments and Intangibles, 377 Investments in Equity Securities, 377 Investments in Debt Securities, 386 Impairment of Investments in Unsecuritized Debt Including Receivables and Loans, 390 The Fair Value Option for Financial Assets, 394 Transfers of Financial Assets, 395 Intangibles, 396 Financial Analysis of Investments and Intangibles, 414 International Accounting Standards, 414 11 Long-Term Liabilities, 432 The Definition of Liabilities, 432 Recognition and Measurement of Liabilities, 433 Debt versus Equity, 434 Classification of Long-Term Debt, 437 Other Liability Measurement Issues, 452 Reference Rate Reform, 460 Troubled Debt Restructurings, 461 Financial Analysis of Long-Term Debt, 464 International Accounting Standards, 466 12 Accounting for Income Taxes, 481 Historical Perspective, 481 The Income Tax Allocation Issue, 483 Permanent and Temporary Differences, 483 Conceptual Issues, 487 Alternative Interperiod Tax Allocation Methods, 491 Financial Statement Disclosure, 500 FIN No. 48, ""Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109"", 504 The Tax Cuts and Jobs Act of 2017, 505 Financial Analysis of Income Taxes, 508 International Accounting Standards, 511 13 Leases, 519 Accounting for Leases, 520 Historical Perspective, 521 Subsequent Developments, 532 FASB ASC 842, 534 Lease Agreements Affected by ASU 2020-04 Reference Rate Reform, 545 Financial Analysis of the Effects of Capitalizing Operating Leases, 547 International Accounting Standards, 549 14 Pensions and Other Postretirement Benefits, 561 Historical Perspective, 563 Accounting for the Pension Fund, 573 The Employee Retirement Income Security Act, 574 Other Postretirement Benefits, 575 Postemployment Benefits, 577 SFAS No. 132, 577 SFAS No. 158, 577 ASU 2017-07, 579 ASU 2018-14, 580 Financial Analysis of Pension and Other Postretirement Benefits, 581 International Accounting Standards, 581 15 Equity, 589 Theories of Equity, 590 Definition of Equity, 594 The Distinction Between Debt and Equity, 595 Corporate Equity, 598 Financial Analysis of Stockholders' Equity, 611 International Accounting Standards, 612 16 Accounting for Multiple Entities, 621 Business Combinations, 621 Accounting for Business Combinations, 623 Consolidations, 630 Financial Engineering and the Role of Structured Entities, 634 Theories of Consolidation, 637 Noncontrolling Interest, 639 Drawbacks of Consolidation, 641 Joint Ventures, 642 Special Purpose Acquisition Companies, 643 Segment Reporting, 646 Foreign Currency Translation, 653 International Accounting Standards, 660 17 Financial Reporting Disclosure Requirements and Ethical Responsibilities, 680 Recognition and Measurement Criteria, 680 The Securities and Exchange Commission, 703 Ethical Responsibilities, 712 International Accounting Standards, 721 Cases, 727 FASB ASC Research, 731 Room for Debate, 732 Index, I-1
Richard G. Schroeder is Emeritus Professor of Accounting at the University of North Carolina at Charlotte. A widely published researcher, he has contributed extensively to the study of accounting theory, financial reporting standards, and audit judgment. His work has been cited over 500 times, influencing both academia and practice. Schroeder has co-authored multiple accounting textbooks, shaping accounting education for students and professionals worldwide. Myrtle W. Clark is Associate Professor of Accounting at the Gatton College of Business and Economics, University of Kentucky. She holds a PhD from the University of South Carolina and specializes in financial accounting research and theory. Clark has authored an accounting theory textbook and published articles in esteemed journals such as Accounting Horizons and The Journal of Accounting Literature. Jack M. Cathey is Associate Professor in the Turner School of Accountancy at the Belk College of Business, University of North Carolina at Charlotte. A Certified Public Accountant (NC), he previously worked as a senior auditor with KPMG. Cathey has published extensively in academic and professional journals and frequently lectures on financial reporting and information systems. As Program Director for the UNC Charlotte Master of Accountancy Program, he is dedicated to advancing accounting education and practice.
