Preface v 1 The Development of Accounting Theory 1 The Early History of Accounting 2 Accounting in the United States since 1930 4 The Role of Ethics in Accounting 18 International Accounting Standards 22 Cases 23 FASB ASC Research 25 Room for Debate 26 2 The Pursuit of the Conceptual Framework 27 The Early Theorists 27 Early Authoritative and Semi-Authoritative Organizational Attempts to Develop the Conceptual Framework of Accounting 29 The FASB''s Conceptual Framework Project 38 Principles-Based versus Rules-Based Accounting Standards 51 International Convergence 55 Cases 65 FASB ASC Research 67 Room for Debate 67 3 International Accounting 68 International Business Accounting Issues 69 The Development of Accounting Systems 69 Preparation of Financial Statements for Foreign Users 71 The International Accounting Standards Committee 71 The IFRS Foundation Constitution 75 The Uses of International Accounting Standards 79 The IASC and the IOSCO 80 The IASB Annual Improvements Project 81 The Use of IASC Standards 81 IASB-FASB Convergence 82 The Effects of International versus U.S. GAAP Accounting Standards 83 Standards Overload 86 Framework for the Preparation and Presentation of Financial Statements 87 IAS No. 1 and IFRS No. 1 95 Cases 96 FASB ASC Research 98 Room for Debate 98 4 Research Methodology and Theories on the Uses of Accounting Information 99 Research Methodology 99 The Outcomes of Providing Accounting Information 102 The Relationship among Research, Education, and Practice 120 Cases 121 FASB ASC Research 123 Room for Debate 123 5 Income Concepts, Revenue Recognition and Matching 125 The Nature of Income 126 Economic versus Accounting Income 130 Revenue Recognition 132 Matching 149 Income Recognition Constraints 151 Earnings Quality, Earnings Management, and Fraudulent Financial Reporting 153 International Accounting Standards 159 Cases 159 FASB ASC Research 162 Room for Debate 162 6 Financial Statement I: The Income Statement 164 The Economic Consequences of Financial Reporting 164 Income Statement Elements 164 Statement Format 166 Proposed Format of the Statement of Comprehensive Income 188 The Value of Corporate Earnings 190 International Accounting Standards 195 Cases 199 FASB ASC Research 202 Room for Debate 202 7 Financial Statements II: The Balance Sheet and the Statement of Cash Flows 203 The Balance Sheet 203 Fair Value Measurements 214 Proposed Format of the Statement of Financial Position 220 Evaluating a Company''s Financial Position 222 The Statement of Cash Flows 225 Proposed Format of the Statement of Cash Flows 233 Financial Analysis of Cash-Flow Information 236 International Accounting Standards 237 Cases 243 FASB ASC Research 246 Room for Debate 247 8 Working Capital 248 Development of the Working Capital Concept 248 Current Usage 250 Components of Working Capital 250 Working Capital Management 261 International Accounting Standards 268 Cases 269 FASB ASC Research 272 Room for Debate 273 9 Long-Term Assets I: Property, Plant, and Equipment 274 Property, Plant, and Equipment 274 Financial Analysis of Property, Plant, and Equipment 279 Cost Allocation 279 Capital and Revenue Expenditures 282 Recognition and Measurement Issues 283 Impairment of Value 283 Accounting for Asset Retirement Obligations 286 International Accounting Standards 288 Cases 294 FASB ASC Research 298 Room for Debate 299 10 Long-Term Assets II: Investments and Intangibles 300 Investments in Equity Securities 300 Investments in Debt Securities 309 Impairment of Investments in Unsecuritized Debt 312 Transfers of Financial Assets 313 Intangibles 314 Financial Analysis of Investments and Intangibles 322 International Accounting Standards 323 Cases 332 FASB ASC Research 335 Room for Debate 336 11 Long-Term Liabilities 337 The Definition of Liabilities 337 Recognition and Measurement of Liabilities 338 Debt versus Equity 339 Classification of Long-Term Debt 342 Other Liability Measurement Issues 354 Troubled Debt Restructurings 359 Financial Analysis of Long-Term Debt 362 International Accounting Standards 364 Cases 370 FASB ASC Research 374 Room for Debate 374 12 Accounting for Income Taxes 376 Historical Perspective 376 The Income Tax Allocation Issue 377 Financial Analysis of Income Taxes 397 International Accounting Standards 399 Cases 402 FASB ASC Research 405 Room for Debate 405 13 Leases 407 Accounting for Leases 408 Financial Analysis of Leases 419 Current Developments 421 Cases 434 FASB ASC Research 437 Room for Debate 438 14 Pensions and Other Postretirement Benefits 439 Historical Perspective 441 Accounting for the Pension Fund 450 The Employee Retirement Income Security Act 451 Other Postretirement Benefits 452 SFAS No. 132 454 SFAS No. 158 454 Current Developments 456 Financial Analysis of Pension and Other Postretirement Benefits 457 International Accounting Standards 458 Cases 460 FASB ASC Research 462 Room for Debate 462 15 Equity 463 Theories of Equity 463 Definition of Equity 468 Reporting Equity 471 Financial Analysis of Stockholders'' Equity 483 International Accounting Standards 484 Cases 486 FASB ASC Research 490 Room for Debate 490 16 Accounting for Multiple Entities 491 Business Combinations 491 Accounting for Business Combinations 492 Business Combinations II 497 Theories of Consolidation 501 Noncontrolling Interest 502 Drawbacks of Consolidation 505 Special-Purpose Entities 506 Variable Interest Entities 506 Segment Reporting 508 Foreign Currency Translation 512 International Accounting Standards 519 Cases 530 FASB ASC Research 533 Room for Debate 534 17 Financial Reporting Disclosure Requirements and Ethical Responsibilities 535 Recognition and Measurement Criteria 535 Areas Directly Affected by Existing FASB Standards: Supplementary Information 540 Other Means of Financial Reporting 548 Other Useful Information for Investment, Credit, and Similar Decisions 551 Securities and Exchange Commission 553 Ethical Responsibilities 560 International Accounting Standards 569 Cases 571 FASB ASC Research 575 Room for Debate 576 Index 577.