Financial Reporting and Analysis (2nd Edition)

3.47 avg rating
( 43 ratings by GoodReads )
 
9780130323514: Financial Reporting and Analysis (2nd Edition)

Financial Reporting and Analysis, Second Edition reveals the truths hidden behind the numbers and shows the pitfalls to avoid when analyzing financial statements. A focus on core topics allows readers to examine the economic and institutional setting for financial reporting, accrual accounting and income determination, structure of the balance sheet and statement of cash flows, essentials of financial statement analysis, the role of financial information in valuation and contracting, receivables, inventories, long-lived assets and depreciation, financial instruments as liabilities, financial reporting for leases, income tax reporting, pensions and postretirement benefits, financial reporting for owners' equity, intercorporate equity investments, statement of cash flows, and an overview of international financial reporting differences and inflation. For anyone whose job includes preparing and analyzing financial statements.

"synopsis" may belong to another edition of this title.

About the Author:

Lawrence Revsine. John and Norma Darling Distinguished Professor of Financial Accounting. Kellogg Graduatt School of Management, Northwestern University, BS 1963, MBA 1965, Ph.D. 19681 Northwestern University; CPA 1963

Lawrence Revsine joined the Kellogg faculty in 1971 and served as chair of the Accounting Information and Management Department for eight years.

The author of several books on various financial reporting issues, he has had approximately 50 articles published in leading academic journals.

His academic recognitions include participation in three American Accounting Association Doctoral Consortia. He has received both Ford Foundation and Peat Marwick Mitchell Foundation research grants. He was selected the American Accounting Association's; Distinguished Overseas Lecturer, and the AAA named him the 1992 Outstanding Educator.: The Illinois CPA Society designated Revsine its 1993 Outstanding Educator. Professors Revsine received the Alumni Choice Faculty Award from the 1995 Reunion Classes; this award is given to the Kellogg faculty member who has had the greatest impact on their professional and personal lives.

Professor Revsine has been a consultant to the American Institute of Certified Public: Accountants, the Securities and Exchange Commission, and the Financial Accounting; Standards Board and served on the Financial Accounting Standards Advisory Council.

He is a consultant to industry on external reporting issues and regulatory cases and has taught extensively in management development and continuing executive education programs in the United States and abroad. Professor Revsine has received numerous commendations for teaching excellence, including Teacher of the Year from the Kellogg Graduate Management Association student group, and the Sidney J. Levy Teaching Award, presented by the Kellogg Dean's Office.

Daniel W. Collins. Henry B. Tippie Research Chair in Accounting, Tippie College of Business, The University of Iowa. BBA 1968, Ph.D. 1973, The University of Iowa

Winner of the University of Iowa Board of Regents Award for Faculty Excellence in 2000 and the American Accounting Association's Outstanding Educator Award in 2001, Dan currently serves as the Chairman of the Accounting Department at The University G Professor Collins' research focuses on the role of accounting numbers in equity valuation and the pricing implications of alternative accounting measurements.

A prolific writer and frequent contributor to the top academic accounting journals, Collins has been recognized as one of the top ten most highly cited authors in the accounting literature over the last 20 years.

Professor Collins is on the editorial review boards of the Journal of Accounting and Economics, Accounting Horizons, and Review of Quantitative Finance and Accounting. He has also served as Associate Editor of The Accounting Review and as Director of Publications for the American Accounting Association (AAA). Professor Collins has served on numerous AAA committees including the Financial Accounting Standards Committee and has chaired the Publications Committee. He also served on the Financial Accounting Standards Advisory Council from 1994-1997.

W. Bruce Johnson. Arthur Andersen Professor of Accounting, Tippie College of Business, The University of Iowa. BS 1970, University of Oregon, MS 1973, Ph.D. 1975, The Ohio State University

W. Bruce Johnson joined the university of Iowa faculty in 1988 and has served as director of its McGladrey Institute for Accounting Research, accounting group chairman, and associate dean for graduate programs, where he was responsible for Iowa's MBA and Executive MBA programs.

Professor Johnson has previously held faculty appointments at the University of Wisconsin, Northwes

Excerpt. © Reprinted by permission. All rights reserved.:

Consistent with the mandates of the Accounting Education Change Commission (AECC), our objective in writing Financial Reporting & Analysis, Second Edition, is to change the way the second-level course in financial accounting is taught, both to) graduate and undergraduate students. Typically this course—often called Intermediate Accounting—focuses on the details of GAAP with little emphasis on understanding the economics of transactions or how statement readers use the resultant numbers for decision making. Traditional intermediate texts are encyclopedic in nature and approach, emphasizing the accounting process and the myriad of arcane accounting rules and procedures that comprise GAAP.

In contrast, the goal of our book is to develop a "critical thinking" approach to financial) accounting and reporting. We seek to develop students' understanding of the environment: in which financial reporting choices are made, what the options are, how these data are used for various types of decisions, and—most importantly—how to avoid misusing financial statement data. We convey the exciting nature of financial reporting in two stages. First, we provide a framework for understanding management's accounting choices and how the accounting affects reported financial numbers. Business contracts-like debt covenant agreements and management compensation agreements-are usually linked to accounting, numbers. We show how this often creates incentives for managers to exploit the flexibility in GAAP to "manage" reported accounting numbers to benefit themselves as well as shareholders. Second, we use real-world financial reports and events to illustrate vividly how GAAP alternatives and subjective accounting estimates give managers discretion in the timing of earnings and in reporting the components of financial position.

The approach adopted in this book integrates the perspectives of accounting, corporate finance, economics, and critical analysis to help students grasp how business transactions get reported and understand their decision implications. In this approach, we cover all of the core topics of intermediate accounting by first describing the business transactions that affect various accounts, the technical details of GAAP, how these rules are applied in practice, and what the financial statements look like. Then we go a step further and ask: What do the numbers mean? Does the accounting process yield numbers that accurately reflect the underlying economic situation of a company? And, if not, what can statement users do to overcome this limitation in order to make more informed decisions?

Our book is aimed not only at those charged with the responsibility for preparing financial statements, but also at those who will use financial statements for making decisions. Our definition of "users" is broad and includes lenders, equity analysts, investment bankers, boards of directors, and others charged with monitoring corporate performance and the behavior of management. As such, it includes auditors who establish audit scope and conduct analytical review procedures to spot problem areas in external financial statements. Statement of Auditing Procedures (SAS) 82, "Consideration of Fraud in a Financial Statement Audit," stresses that auditors must act as "financial detectives" to uncover financial reporting irregularities. To do this effectively requires an understanding of the incentives of managers, how the flexibility of GAAP can sometimes be exploited to conceal rather than reveal financial truth, and the potential danger signals that should be investigated. Our intent is to help readers learn how to conduct better audits, improve cash flow forecasts, undertake realistic valuations, conduct better comparative analyses and make more informed judgments about the performance of management.

Financial Reporting & Analysis, Second Edition, provides instructors with the teaching/learning approach for achieving many of the goals stressed by the Accounting Education Change Commission. Specifically, our book is designed to instill capacities for: 1) thinking in an abstract, logical manner, 2) solving unstructured problems, 3) understanding the determining forces behind management's accounting choices, and 4) encouraging an integrated, cross-disciplinary view of financial reporting. Text discussions were written, and exercises, problems, and cases were carefully chosen to help achieve these objectives. But the book achieves these AECC goals without sacrificing technical underpinnings. Throughout, we explain in detail where the numbers come from, what measurement rules are used, and how they are entered into the accounting records. We have strived to provide a comprehensive user-oriented focus while simultaneously helping students build a strong technical foundation.

Key Changes from the First Edition

The first edition of our book has been widely adopted in accounting departments at business schools throughout the United States, Canada, Europe, and the Pacific Rim. It has been used successfully at both the graduate and undergraduate levels as well as in investment banking, commercial lending, and other corporate training programs. Many of our colleagues who used the first edition have provided us with valuable feedback. Based on their input, we have made a number of changes in this edition of the book to achieve the objectives outlined above more effectively. Key changes include the following:

  • More international examples and discussion of International Accounting Standards (IAS) are interspersed throughout the book.
  • Special "Getting Behind the Numbers" icons are used to highlight and link discussions in later chapters back to the analysis, valuation, and contracting framework set forth in Chapters 5, 6, and 7.
  • The examples and exhibits from actual company reports have been updated and expanded to illustrate alternative accounting treatments and new disclosures stemming from recent FASB pronouncements.
  • Problems and cases in all chapters have been updated and expanded to provide a larger number of straight-forward application problems as well as "stretch" analysis problems that are designed to test students' reasoning and analytical thinking skills.
  • A new appendix to Chapter 2 reviews the accounting equation, debit-credit procedures, journal entries, the adjusting and closing process, statement preparation, and T-account analysis.
  • A new Chapter 3, "Additional Topics in Income Determination," has been added that contains a discussion of specialized areas of revenue recognition as well as issues covered in SEC Staff Accounting Bulletin (SAB) 101 on "Revenue Recognition:" Prompted by recent concerns raised by former SEC Chairman Arthur Levitt, this chapter also provides an overview of techniques frequently used by firms to manage earnings.
  • Chapter 4, "Structure of the Balance Sheet and Statement of Cash Flows," contains a new section on how financial statement "fingerprints" provide dues about unique industry characteristics (including dot.coms). The balance sheet of Cadbury Schweppes, plc, is used to illustrate international differences in statement format and account terminology.
  • Chapter 5, "Essentials of Financial Statement Analysis," contains a new section on "Cash Earnings and EBITDA" Amazon.com is used as the focal point to illustrate the use—and misuse—of this earnings construct by Wall Street analysts.
  • Chapter 6, "The Role of Financial Information in Valuation;' features a new section on valuing "dot.com" companies and additional end-of-chapter problem material on valuation.
  • Chapter 8, "Receivables," contains an expanded discussion of securitizations and a new Self-Study problem on this topic.
  • Chapter 9, "Inventories," contains a new section on inventory errors and an expanded discussion of how earnings can be managed through inventory (production) decisions.
  • Chapter 10, "Long-Lived Assets and Depreciation;" has an expanded discussion of intangibles that explains how statement readers can overcome some of the limitations of GAAP reporting in this area. We have also expanded our discussion of capitalization of interest and how it affects interperiod analysis.
  • Chapter 11, "Financial Instruments as Liabilities," has undergone extensive revision and now contains a thorough discussion of risk management, derivative securities, hedging transactions, and hedge accounting.
  • Chapter 12, "Financial Reporting for Leases," contains an expanded discussion of leases with up-front payments and is one of the few texts that covers synthetic leases. The illustration of constructive capitalization of operating leases has been expanded and simplified.
  • Chapter 13, "Income Tax Reporting," has been updated with new tax footnote disclosures from Merck. Tax footnote disclosures from Lubrizol and Cambrex are used to illustrate how adjustments can be made to reported earnings to compare firms that use different depreciation methods.
  • Chapter 14, "Pensions and Postretirement Benefits," has been revised to illustrate real companies' SFAS No. 132 pension disclosure requirements and what they mean for informed analysis. We now include a discussion of the controversial "cash balance" pension plans.
  • Chapter 15, "Financial Reporting for Owners' Equity," contains one of the most extensive discussions of employee stock option plans (ESOPs) and related accounting issues in any financial reporting text. We've also expanded our discussion of earnings per share calculations.
  • Chapter 16, "Intercorporate Equity Investments," contains a discussion of the FASB's recently proposed changes for goodwill accounting and new criteria for determining control. Unlike most other texts, this chapter illustrates how purchase accounting for business combinations can distort year-to-year comparisons of sales and earnings growth.
  • Chapter 17, "Statement of Cash Flows," contains an expanded discussion of why changes in working capital balance sheet accounts do not correspond to adjustments to accrual earnings to arrive at operating cash flows shown on the cash flow statement. It also contains a new "Analytical Insights" section that discusses "cash burn rates" and "time to burnout" measures for Internet stocks.
  • Chapter 18, "Overview of International Financial Reporting Differences and Inflation," contains an expanded discussion of the International Accounting Standards Board's activities as well as the SEC's views on accepting IASB standards for Form 20-F filings.

"About this title" may belong to another edition of this title.

Top Search Results from the AbeBooks Marketplace

1.

W. Bruce Johnson Lawrence Revsine
Published by Prentice Hall (2001)
ISBN 10: 0130323519 ISBN 13: 9780130323514
New Quantity Available: 3
Seller
unifachbuch
(Köln, NRW, Germany)
Rating
[?]

Book Description Prentice Hall, 2001. Gebunden. Book Condition: Neu. Gebraucht - Sehr gut Unbenutzt. Schnelle Lieferung, Kartonverpackung. Abzugsfähige Rechnung. Bei Mehrfachbestellung werden die Versandkosten anteilig erstattet. - This book emphasizes both the process of financial reporting and the analysis of financial statements. It also employs a true 'user' perspective by discussing the contracting and decision implications of accounting--and this helps readers understand why accounting choices matter and to whom. The authors train their readers to be good financial detectives, able to read, use, and interpret the statements and-most importantly--understand how and why managers can utilize the flexibility in GAAP to manipulate the numbers for their own purposes. 1006 pp. Englisch. Bookseller Inventory # INF1000001576

More Information About This Seller | Ask Bookseller a Question

Buy New
US$ 6.69
Convert Currency

Add to Basket

Shipping: US$ 27.82
From Germany to U.S.A.
Destination, Rates & Speeds

2.

Daniel W. Collins; Lawrence Revsine; W. Bruce Johnson
Published by Prentice Hall (2001)
ISBN 10: 0130323519 ISBN 13: 9780130323514
New Hardcover Quantity Available: 1
Seller
Irish Booksellers
(Rumford, ME, U.S.A.)
Rating
[?]

Book Description Prentice Hall, 2001. Hardcover. Book Condition: New. book. Bookseller Inventory # 0130323519

More Information About This Seller | Ask Bookseller a Question

Buy New
US$ 35.31
Convert Currency

Add to Basket

Shipping: FREE
Within U.S.A.
Destination, Rates & Speeds

3.

Lawrence Revsine, Daniel W. Collins, W. Bruce Johnson
Published by Prentice Hall (2001)
ISBN 10: 0130323519 ISBN 13: 9780130323514
New Hardcover Quantity Available: 1
Seller
Ergodebooks
(RICHMOND, TX, U.S.A.)
Rating
[?]

Book Description Prentice Hall, 2001. Hardcover. Book Condition: New. 2. Bookseller Inventory # DADAX0130323519

More Information About This Seller | Ask Bookseller a Question

Buy New
US$ 31.48
Convert Currency

Add to Basket

Shipping: US$ 3.99
Within U.S.A.
Destination, Rates & Speeds

4.

Revsine, Lawrence
Published by Prentice Hall (2001)
ISBN 10: 0130323519 ISBN 13: 9780130323514
New Hardcover Quantity Available: 1
Seller
Booked Again
(Summit, NJ, U.S.A.)
Rating
[?]

Book Description Prentice Hall, 2001. Hardcover. Book Condition: New. New item. Bookseller Inventory # QX-005-91-5064105

More Information About This Seller | Ask Bookseller a Question

Buy New
US$ 35.00
Convert Currency

Add to Basket

Shipping: US$ 10.00
Within U.S.A.
Destination, Rates & Speeds

5.

W. Bruce Johnson, Daniel W. Collins and Lawrence R
ISBN 10: 0130323519 ISBN 13: 9780130323514
New Quantity Available: 1
Seller
Castle Rock
(Pittsford, NY, U.S.A.)
Rating
[?]

Book Description Book Condition: Brand New. Book Condition: Brand New. Bookseller Inventory # 97801303235141.0

More Information About This Seller | Ask Bookseller a Question

Buy New
US$ 65.51
Convert Currency

Add to Basket

Shipping: US$ 3.99
Within U.S.A.
Destination, Rates & Speeds