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Contents
CHAPTER 1 Financial Reporting and Accounting Standards
CHAPTER 2 Conceptual Framework for Financial Reporting
CHAPTER 3 The Accounting Information System
CHAPTER 4 Income Statement and Related Information
CHAPTER 5 Statement of Financial Position and Statement of Cash Flows
CHAPTER 6 Accounting and the Time Value of Money
CHAPTER 7 Cash and Receivables
CHAPTER 8 Valuation of Inventories: A Cost-Basis Approach
CHAPTER 9 Inventories: Additional Valuation Issues
CHAPTER 10 Acquisition and Disposition of Property, Plant, and Equipment
CHAPTER 11 Depreciation, Impairments, and Depletion
CHAPTER 12 Intangible Assets
CHAPTER 13 Current Liabilities, Provisions, and Contingencies
CHAPTER 14 Non-Current Liabilities
CHAPTER 15 Equity
CHAPTER 16 Dilutive Securities and Earnings per Share
CHAPTER 17 Investments
CHAPTER 18 Revenue Recognition
CHAPTER 19 Accounting for Income Taxes
CHAPTER 20 Accounting for Pensions and Postretirement Benefits
CHAPTER 21 Accounting for Leases
CHAPTER 22 Accounting Changes and Error Analysis
CHAPTER 23 Statement of Cash Flows
CHAPTER 24 Presentation and Disclosure in Financial Reporting
Appendix A Specimen Financial Statements: Marks and Spencer Group plc
Appendix B Specimen Financial Statements: adidas AG
Appendix C Specimen Financial Statements: Puma Group
Index
EULA
From the Authors

Globalization is occurring rapidly. As economic and other interactions increase among

countries, capital markets must provide high-quality financial information. A need therefore
exists for high-quality financial reporting standards that meet this objective. Fortunately,
International Financial Reporting Standards (IFRS) has broad international acceptance,
being used in some form by more than 115 countries around the world. One securities regulator
noted that IFRS is best positioned to serve as the single set of high-quality accounting
standards.

Change Is the Only Constant

Most countries want rapid action related to the acceptance of IFRS. A number of countries have
already switched from their own version of accounting standards to IFRS. Students and
instructors need educational materials related to IFRS in order to meet this new challenge. Our
objective in revising Intermediate Accounting, IFRS Edition, was therefore to continue to provide
the tools needed to understand what IFRS is and how it is applied in practice. The emphasis on
fair value, the proper accounting for financial instruments, and the new developments related to
leasing, revenue recognition, and financial statement presentation are examined in light of
current practice. In addition, given the rapid changes taking place, we provide and discuss the
new Conceptual Framework to understand how these issues will likely be resolved in the future.
“If this textbook helps you appreciate the challenges, worth, and limitations of financial
reporting, if it encourages you to evaluate critically and understand financial accounting
concepts and practice, and if it prepares you for advanced study, professional
examinations, and the successful and ethical pursuit of your career in accounting or
business in a global economy, then we will have attained our objectives.”

A Look at Global Accounting

While IFRS has achieved broad acceptance, not all countries have adopted it. For example,
U.S. companies still follow U.S. generally accepted accounting principles (U.S. GAAP) in
preparing their financial statements. In fact, the differences between IFRS and U.S. GAAP may
provide certain companies with a competitive advantage, so understanding these differences
may be important in analyzing company performance. In addition, the IASB and the FASB are
working together to converge their standards as appropriate. Accordingly, we have included a
Global Accounting Insights section at the end of selected chapters, to highlight the important
differences that remain between IFRS and U.S. GAAP, as well as the ongoing joint convergence
efforts to resolve them. As a result, students truly gain a global accounting education by
studying this textbook.

Intermediate Accounting Works

Intermediate Accounting, Sixteenth Edition (based on U.S. GAAP) is the market-leading

textbook in providing the tools needed to understand what U.S. GAAP is and how it is applied in
practice. With this IFRS Third Edition, we strive to continue to provide the material needed to
understand this subject area using IFRS. The book is comprehensive and up-to-date, and
provides the instructor with flexibility in the topics to cover. We also include proven pedagogical
tools, designed to help students learn more effectively and to answer the changing needs of this
course.
We are excited about Intermediate Accounting, IFRS Third Edition. We believe it meets an
important objective of providing useful information to educators and students interested in
learning about IFRS. Suggestions and comments from users of this textbook will be
appreciated. Please feel free to e-mail any one of us at AccountingAuthors@yahoo.com.
Donald E. Kieso
Somonauk, Illinois

Jerry J. Weygandt
Madison, Wisconsin

Terry D. Warfield
Madison, Wisconsin

Author Commitment

DON KIESO Donald E. Kieso, PhD, CPA, received his bachelor's degree from Aurora University
and his doctorate in accounting from the University of Illinois. He has served as chairman of the
Department of Accountancy and is currently the KPMG Emeritus Professor of Accountancy at
Northern Illinois University. He has public accounting experience with Price Waterhouse & Co.
(San Francisco and Chicago) and Arthur Andersen & Co. (Chicago) and research experience
with the Research Division of the American Institute of Certified Public Accountants (New York).
He has done post-doctorate work as a Visiting Scholar at the University of California at Berkeley
and is a recipient of NIU's Teaching Excellence Award and four Golden Apple Teaching Awards.
Professor Kieso is the author of other accounting and business books and is a member of the
American Accounting Association, the American Institute of Certified Public Accountants, and
the Illinois CPA Society. He has served as a member of the Board of Directors of the Illinois
CPA Society, then AACSB's Accounting Accreditation Committees, the State of Illinois
Comptroller's Commission, as Secretary-Treasurer of the Federation of Schools of
Accountancy, and as Secretary-Treasurer of the American Accounting Association. Professor
Kieso is currently serving on the Board of Trustees and Executive Committee of Aurora
University, as a member of the Board of Directors of Kishwaukee Community Hospital, and as
Treasurer and Director of Valley West Community Hospital. From 1989 to 1993, he served as a
charter member of the National Accounting Education Change Commission. He is the recipient
of the Outstanding Accounting Educator Award from the Illinois CPA Society, the FSA's Joseph
A. Silvoso Award of Merit, the NIU Foundation's Humanitarian Award for Service to Higher
Education, a Distinguished Service Award from the Illinois CPA Society, and in 2003 an
honorary doctorate from Aurora University.
JERRY WEYGANDT Jerry J. Weygandt, PhD, CPA, is Arthur Andersen Alumni Emeritus
Professor of Accounting at the University of Wisconsin—Madison. He holds a Ph.D. in
accounting from the University of Illinois. Articles by Professor Weygandt have appeared in The
Accounting Review, Journal of Accounting Research, Accounting Horizons, Journal of
Accountancy, and other academic and professional journals. These articles have examined
such financial reporting issues as accounting for price-level adjustments, pensions, convertible
securities, stock option contracts, and interim reports. Professor Weygandt is author of other
accounting and financial reporting books and is a member of the American Accounting
Association, the American Institute of Certified Public Accountants, and the Wisconsin Society
of Certified Public Accountants. He has served on numerous committees of the American
Accounting Association and as a member of the editorial board of the Accounting Review; he
also has served as President and Secretary-Treasurer of the American Accounting Association.
In addition, he has been actively involved with the American Institute of Certified Public
Accountants and has been a member of the Accounting Standards Executive Committee
(AcSEC) of that organization. He has served on the FASB task force that examined the
reporting issues related to accounting for income taxes and served as a trustee of the Financial
Accounting Foundation. Professor Weygandt has received the Chancellor's Award for
Excellence in Teaching and the Beta Gamma Sigma Dean's Teaching Award. He is on the
board of directors of M & I Bank of Southern Wisconsin. He is the recipient of the Wisconsin
Institute of CPA's Outstanding Educator's Award and the Lifetime Achievement Award. In 2001,
he received the American Accounting Association's Outstanding Educator Award.

TERRY WARFIELD Terry D. Warfield, PhD, is the PwC Professor in Accounting at the
University of Wisconsin—Madison. He received a B.S. and M.B.A. from Indiana University and
a Ph.D. in accounting from the University of Iowa. Professor Warfield's area of expertise is
financial reporting, and prior to his academic career, he worked for five years in the banking
industry. He served as the Academic Accounting Fellow in the Office of the Chief Accountant at
the U.S. Securities and Exchange Commission in Washington, D.C. from 1995–1996. Professor
Warfield's primary research interests concern financial accounting standards and disclosure
policies. He has published scholarly articles in The Accounting Review, Journal of Accounting
and Economics, Research in Accounting Regulation, and Accounting Horizons, and he has
served on the editorial boards of The Accounting Review, Accounting Horizons, and Issues in
Accounting Education. He has served as president of the Financial Accounting and Reporting
Section, the Financial Accounting Standards Committee of the American Accounting
Association (Chair 1995–1996), and on the AAA-FASB Research Conference Committee. He
also served on the Financial Accounting Standards Advisory Council of the Financial
Accounting Standards Board, and he currently serves as a trustee of the Financial Accounting
Foundation. Professor Warfield has received teaching awards at both the University of Iowa and
the University of Wisconsin, and he was named to the Teaching Academy at the University of
Wisconsin in 1995. Professor Warfield has developed and published several case studies based
on his research for use in accounting classes. These cases have been selected for the AICPA
Professor-Practitioner Case Development Program and have been published in Issues in
Accounting Education.

What's New?

This IFRS Third Edition expands our emphasis on student learning and improves upon a
teaching and learning package that instructors and students have rated the highest in customer
satisfaction. Based on extensive reviews, focus groups, and interactions with other intermediate
accounting instructors and students, we have developed a number of new pedagogical features
and content changes, designed both to help students learn more effectively and to answer the
changing needs of the course.

Wiley Engage

Wiley Engage for Intermediate Accounting: IFRS Third Edition is an innovative, dynamic online
environment—designed to help you administer your course in a personalized way. Utilizing
Wiley Engage in your course provides you with the following tools and resources to create and
manage effective activities and assessment strategies:
Complete online version of the textbook for seamless integration of all content. This content
can be fully customized, curated, or rearranged to better support your course, and local
content can be easily added, including your own assessment questions.
Review and Practice questions and solutions provide new practice opportunities and
 solutions that are integrated throughout.
Solution Walkthrough Videos provide step-by-step guidance for relevant homework
problems and solutions to review important concepts.
Additional relevant student study tools and learning resources ensure positive learning
outcomes.
Please contact your Wiley representative for details about these and other resources, or visit
our website at www.wiley.com.

Review and Practice and Solutions

New practice opportunities with solutions are integrated throughout the textbook and the Wiley
Engage course. Each textbook chapter now provides students with a Review and Practice
section that includes learning objective summaries, a key term listing, and a practice problem
with solution.

Streamlined Learning Objectives and Design

Each chapter now offers a more focused approach within each chapter and a design that
improves compatibility across all media.

Authoritative Literature References

Now placed near the end of each chapter, the Authoritative Literature References include a full
citation as well as a practice Research Case.

Major Content Revisions

In response to the changing environment, we have significantly revised several chapters.

Chapter 2 Conceptual Framework for Financial Reporting

Amendments to current IASB Conceptual Framework are expected later in 2017, so a

revised chapter will likely be available early in 2018 (new Evolving Issue discusses the
IASB's exposure draft on its Conceptual Framework).
Chapter 5 Balance Sheet and Statement of Cash Flows

Opening story reflects update on IASB financial statement project.

New discussion of IBM's financial flexibility within the ‘What Do the Numbers Mean?’ box on
the importance of cash flow information for investors.
Chapter 7 Cash and Receivables

Thoroughly updated discussion of recognition and valuation of accounts receivable, per

latest IASB standards, including deleting percentage-of-sales approach.
Chapter 8 Valuation of Inventories: A Cost-Basis Approach

Updated discussion on ownership of goods and costs to include in inventory, per recent
IASB standard on revenue.
Chapter 13 Current Liabilities and Contingencies

New examples and updated discussion of warranties and consideration payable, per latest
IASB standard on revenue.
 Chapter 17 Investments

Discussion updated throughout to reflect IFRS 9 ruling for accounting for investments,
including the Fair Value Hedge section in Appendix 17A.
Chapter 18 Revenue Recognition

Right of Return section completely rewritten as Sales Returns and Allowances, with more
explanations and examples, per new IASB standard.
Chapter 21 Accounting for Leases

Entire chapter substantially revised per latest standard.

See the following for a complete list of content revisions by chapter.

Content Changes by Chapter

Chapter 1 Financial Accounting and Accounting Standards

• Updated discussion on convergence efforts between IFRS and U.S. GAAP.

• New “What Do the Numbers Mean?” (WDNM) box on how each country's culture and customs
impact convergence efforts.
Chapter 2 Conceptual Framework for Financial Reporting

• Amendments to current IASB Conceptual Framework are expected later in 2017, so a revised
chapter will likely be available early in 2018 (new Evolving Issue discusses the IASB's exposure
draft on its Conceptual Framework).
• New WDNM box on how the use of unconventional financial terms in statements can mislead
investors.
Chapter 3 The Accounting Information System

• Updated discussion to reflect IFRS on revenue recognition.

• New section on the chart of accounts, as well as increased explanation and graphics of the
recording process.
Chapter 5 Balance Sheet and Statement of Cash Flows

• Revised opening story to reflect the update on IASB financial statement project.
• New discussion of IBM's financial flexibility within WDNM box on the importance of cash flow
information for investors.
Chapter 6 Accounting and the Time Value of Money

• Changed interest rates on many of the in-chapter examples to reflect more realistic data.
• Deleted outdated WDNM boxes
Chapter 7 Cash and Receivables

• Updated WDNM box on where companies park their cash

• Thoroughly updated discussion of recognition and valuation of accounts receivable, per latest IASB
standards, including deleting percentage-of-sales approach.
• Deleted Appendix , Impairments of Receivables.
Chapter 8 Valuation of Inventories: A Cost-Basis Approach

• Updated discussion on ownership of goods and costs to include in inventory, per recent IASB
standard.
 • Inventory errors discussion moved to the end of chapter, for improved flow of discussion.
• New WDNM box on operating on lean inventory levels.
Chapter 10 Acquisition and Disposition of Property, Plant, and Equipment

• Updated opening story on importance and capital expenditures (capex) of property, plant, and
equipment to many companies.
Chapter 11 Depreciation, Impairments, and Depletion

• Updated opening story on technical and environmental issues affecting recognition of impaired
assets.
Chapter 12 Intangible Assets

• New WDNM boxes on how companies protect their intangible assets and the many patent battles
between companies.
• Moved up the “Presentation of Intangible Assets” section within chapter for improved flow of topics.
Chapter 13 Current Liabilities and Contingencies

• New examples and updated discussion of warranties and consideration payable, per latest IASB
standard on revenue.
• New WDNM box, on how an increasing liability such as unearned revenues can sometimes provide
a positive signal about a company's sales and profitability.
Chapter 14 Non-Current Liabilities

• Deleted outdated WDNM box on correlations between bond and equity markets.
Chapter 15 Equity

• Moved up discussion of preference shares for improved flow of discussion.

• Updated WDNM box for the recent trends on dividend payouts
Chapter 16 Dilutive Securities and Earnings per Share

• Updated opening story, on increased use of restricted shares versus share options.
• Revised WDNM box on convertible bonds, to include most recent information and trends.
• Updated discussion and added illustration on share-based compensation plans.
Chapter 17 Investments

• Discussion updated throughout to reflect the updated IFRS 9 for accounting for investments,
including the Fair Value Hedge section in Appendix 17A.
• New WDNM boxes on (1) how mutual funds assign a current value to private technology
companies, (2) concerns over accounting rules that delay recognition of losses, and (3) the
expanding global derivatives market.
Chapter 18 Revenue Recognition

• New section on extended example of the basic five-step revenue recognition model, to give
students a better understanding/overview before more advanced issues are discussed.
• Right of Return section completely rewritten as Sales Returns and Allowances, with more
explanations and examples, per new IASB standard.
• End of chapter material includes many new Brief Exercises, Exercises, and Problems, to reflect
new IASB standard and terminology.
Chapter 19 Accounting for Income Taxes

• New section and illustrations on financial statement effects of future taxable amounts and deferred
taxes.
• Completely revised the Financial Statement Presentation section, including new material on note
disclosure.
Chapter 20 Accounting for Pensions and Postretirement Benefits

• Updated the WDNM boxes on defined contribution plans and overall financial health of pension
plans for most recent information.
Chapter 21 Accounting for Leases

• Entire chapter substantially revised per latest standard.

Chapter 22 Accounting Changes and Error Analysis

• New WDNM box on whether changes for accounting estimates are motivated by attempt to provide
more useful information or to make financial results look better.
• Motivations for Change of Accounting Method section now a WDNM box.
Chapter 23 Statement of Cash Flows

• Updated Evolving Issue box, for most recent research on decision-usefulness of direct versus
indirect methods for preparing the statement of cash flows.
• Expanded footnote on reporting of significant non-cash transactions as they can significantly affect
analysts' assessments of capital expenditures and free cash flow.
Chapter 24 Full Disclosure in Financial Reporting

• Updated opening story on most recent IASB actions regarding financial disclosure.
• New Evolving Issue box on pros and cons of short-term interim reporting.
 Key Learning Features
This edition continues to provide numerous key learning aids to help you master the textbook
material and prepare you for a successful career.
Chapter Preview
The Chapter Preview summarizes the major issues discussed in the chapter, and provides
students with a visual outline of the key topics.

Underlying Concepts
The Underlying Concepts highlight and explain major conceptual topics throughout chapter.

What Do the Numbers Mean?

The “What Do the Numbers Mean?” boxes further students' understanding of key concepts with
practical, real-world examples.
Evolving issue

The Evolving Issue feature introduces and discusses a current topic in the accounting industry in
which the profession may be encountering controversy or nearing resolution. The feature shows
how the key standardsetting organizations make decisions to adjust to the changing global
business environment.

Review and Practice

NEW Review and Practice section includes Key Terms Review, Learning Objectives Review, and
a Practice Problem with Solution. In addition, multiple-choice questions with solutions, review
exercises with solutions, and a full glossary of all key terms are available online.
Using Your Judgment

The Using Your Judgment section provides students with real-world homework problems covering
topics such as financial reporting and financial statement analysis.

Bridge to the Profession

NEW to this edition, this section now includes Authoritative Literature References and a Research
Case, all designed to refer students to the relevant IASB literature for key concepts in the textbook
and provide assessment of their understanding.

Global Accounting Insights

Global Accounting Insights offer students a detailed discussion and assessment material of U.S.
accounting standards (U.S. GAAP) at the end of each chapter.
Contents
1. Cover
2. Title Page
3. Dedication
4. Copyright page
5. Brief Contents
6. From the Authors
7. Author Commitment
8. What's New?
9. Content Changes by Chapter
10. Key Learning Features
11. Contents
12. Acknowledgments
13. Chapter 1 Financial Reporting and Accounting Standards
1. Global Markets
2. Objective of Financial Reporting
3. Standard-Setting Organizations
4. Financial Reporting Challenges
5. Global Accounting Insights
6. Notes
14. Chapter 2 Conceptual Framework for Financial Reporting
1. Conceptual Framework
2. Fundamental Concepts
3. Assumptions
4. Measurement, Recognition, and Disclosure Concepts
5. Global Accounting Insights
6. Notes
15. Chapter 3 The Accounting Information System
1. Accounting Information System
2. Record and Summarize Basic Transactions
3. Identify and Prepare Adjusting Entries
4. Preparing Financial Statements
5. Financial Statements for a Merchandising Company
6. Appendix 3A Cash‐Basis Accounting versus Accrual‐Basis Accounting
7. Conversion from Cash Basis to Accrual Basis
8. Theoretical Weaknesses of the Cash Basis
9. Appendix 3B Using Reversing Entries
10. Illustration of Reversing Entries—Accruals
11. Illustration of Reversing Entries—Deferrals
12. Summary of Reversing Entries
13. Appendix 3C Using A Worksheet: The Accounting Cycle Revisited
14. Worksheet Columns
15. Preparing Financial Statements from a Worksheet
16. Global Accounting Insights
17. Notes
16. Chapter 4 Income Statement and Related Information
1. Income Statement
2. Content and Format of the Income Statement
3. Reporting Various Income Items
 4. Accounting Changes and Errors
5. Related Equity Statements
6. Global Accounting Insights
7. Notes
17. Chapter 5 Statement of Financial Position and Statement of Cash Flows
1. Statement of Financial Position
2. Preparation of the Statement of Financial Position
3. Statement of Cash Flows
4. Additional Information
5. Appendix 5A Ratio Analysis—A Reference
6. Using Ratios to Analyze Performance
7. Notes
18. Chapter 6 Accounting and the Time Value of Money
1. Basic Time Value Concepts
2. Single-Sum Problems
3. Annuities (Future Value)
4. Annuities (Present Value)
5. Other Time Value of Money Issues
6. Notes
19. Chapter 7 Cash and Receivables
1. Cash
2. Receivables
3. Valuation of Accounts Receivable
4. Notes Receivable
5. Other Issues Related to Receivables
6. Appendix 7A Cash Controls
7. Using Bank Accounts
8. The Imprest Petty Cash System
9. Physical Protection of Cash Balances
10. Reconciliation of Bank Balances
11. Global Accounting Insights
12. Notes
20. Chapter 8 Valuation of Inventories: A Cost-Basis Approach
1. Inventory Issues
2. Goods and Costs Included in Inventory
3. Which Cost Flow Assumption to Adopt?
4. Effect of Inventory Errors
5. Appendix 8A LIFO Cost Flow Assumption
6. Last-In, First-Out (LIFO)
7. Inventory Valuation Methods—Summary Analysis
8. Notes
21. Chapter 9 Inventories: Additional Valuation Issues
1. Lower-of-Cost-or-Net Realizable Value (LCNRV)
2. Valuation Bases
3. The Gross Profit Method of Estimating Inventory
4. Retail Inventory Method
5. Presentation and Analysis
6. Global Accounting Insights
7. Notes
22. Chapter 10 Acquisition and Disposition of Property, Plant, and Equipment
 1. Property, Plant, and Equipment
2. Interest Costs During Construction
3. Valuation of Property, Plant, and Equipment
4. Costs Subsequent to Acquisition
5. Disposition of Property, Plant, and Equipment
6. Notes
23. Chapter 11 Depreciation, Impairments, and Depletion
1. Depreciation—A Method of Cost Allocation
2. Other Depreciation Issues
3. Impairments
4. Depletion
5. Revaluations
6. Presentation and Analysis
7. Appendix 11A Revaluation of Property, Plant, and Equipment
8. Revaluation of Land
9. Revaluation of Depreciable Assets
10. Global Accounting Insights
11. Notes
24. Chapter 12 Intangible Assets
1. Intangible Asset Issues
2. Types of Intangible Assets
3. Impairment and Presentation of Intangible Assets
4. Research and Development Costs
5. Global Accounting Insights
6. Notes
25. Chapter 13 Current Liabilities, Provisions, and Contingencies
1. Current Liabilities
2. Provisions
3. Contingencies
4. Presentation and Analysis
5. Notes
26. Chapter 14 Non-Current Liabilities
1. Bonds Payable
2. Long-Term Notes Payable
3. Extinguishment of Non-Current Liabilities
4. Presentation and Analysis
5. Global Accounting Insights
6. Notes
27. Chapter 15 Equity
1. Corporate Capital
2. Reacquisition of Shares
3. Dividend Policy
4. Presentation and Analysis of Equity
5. Appendix 15A Dividend Preferences and Book Value per Share
6. Dividend Preferences
7. Book Value per Share
8. Global Accounting Insights
9. Notes
28. Chapter 16 Dilutive Securities and Earnings per Share
1. Dilutive Securities
 2. Share Warrants
3. Share Compensation Plans
4. Basic Earnings per Share
5. Diluted Earnings per Share
6. Appendix 16A Accounting for Share-Appreciation Rights
7. SARS—Share-Based Equity Awards
8. SARS—Share-Based Liability Awards
9. Share-Appreciation Rights Example
10. Appendix 16B Comprehensive Earnings per Share Example
11. Diluted Earnings Per Share
12. Global Accounting Insights
13. Notes
29. Chapter 17 Investments
1. Debt Investments
2. Equity Investments
3. Other Reporting Issues
4. Appendix 17A Accounting for Derivative Instruments
5. Defining Derivatives
6. Who Uses Derivatives, and Why?
7. Basic Principles in Accounting for Derivatives
8. Derivatives Used for Hedging
9. Other Reporting Issues
10. Comprehensive Hedge Accounting Example
11. Controversy and Concluding Remarks
12. Appendix 17B Fair Value Disclosures
13. Disclosure of Fair Value Information: Financial Instruments
14. Disclosure of Fair Values: Impaired Assets or Liabilities
15. Conclusion
16. Global Accounting Insights
17. Notes
30. Chapter 18 Revenue Recognition
1. Fundamentals of Revenue Recognition
2. The Five-Step Process Revisited
3. Accounting for Revenue Recognition Issues
4. Presentation and Disclosure
5. Appendix 18A Long-Term Construction Contracts
6. Revenue Recognition Over Time
7. Appendix 18B Revenue Recognition for Franchises
8. Franchise Accounting
9. Recognition of Franchise Rights Revenue over Time
10. Notes
31. Chapter 19 Accounting for Income Taxes
1. Fundamentals of Accounting for Income Taxes
2. Additional Issues
3. Accounting for Net Operating Losses
4. Financial Statement Presentation
5. Appendix 19A Comprehensive Example of Interperiod Tax Allocation
6. First Year—2018
7. Second Year—2019
8. Global Accounting Insights
 9. Notes
32. Chapter 20 Accounting for Pensions and Postretirement Benefits
1. Fundamentals of Pension Plan Accounting
2. Using a Pension Worksheet
3. Past Service Cost
4. Remeasurements
5. Reporting Pension Plans in Financial Statements
6. Global Accounting Insights
7. Notes
33. Chapter 21 Accounting for Leases
1. The Leasing Environment
2. Lessee Accounting
3. Lessor Accounting
4. Special Lease Accounting Problems
5. Appendix 21A Sale-Leasebacks
6. Accounting Issues in Sale-Leaseback Transactions
7. Sale-Leaseback Example
8. Appendix 21B Comprehensive Example
9. Lease Terms: Scenario 1
10. Lease Terms: Scenario 2
11. Global Accounting Insights
12. Notes
34. Chapter 22 Accounting Changes and Error Analysis
1. Accounting Changes
2. Changes in Accounting Estimates
3. Accounting Errors
4. Error Analysis
5. Global Accounting Insights
6. Notes
35. Chapter 23 Statement of Cash Flows
1. The Statement of Cash Flows
2. Preparing the Statement of Cash Flows
3. Special Problems in Statement Preparation
4. Use of a Worksheet
5. Global Accounting Insights
6. Notes
36. Chapter 24 Presentation and Disclosure in Financial Reporting
1. Full Disclosure Principle
2. Disclosure Issues
3. Auditor's and Management's Reports
4. Current Reporting Issues
5. Appendix 24A Basic Financial Statement Analysis
6. Perspective on Financial Statement Analysis
7. Ratio Analysis
8. Comparative Analysis
9. Percentage (Common-Size) Analysis
10. Appendix 24B First-Time Adoption of IFRS
11. General Guidelines
12. Implementation Steps
13. Summary
 14. Global Accounting Insights
15. Notes
37. Appendix A Specimen Financial Statements: Marks and Spencer Group plc
38. Appendix B Specimen Financial Statements: adidas AG
39. Appendix C Specimen Financial Statements: Puma Group
40. Name Index
41. Subject Index
42. EULA
Acknowledgments
Third Edition Reviewers

Azlina Ahmad, Universiti Kebangsaan Malaysia

Wilfredo Baltazar, De La Salle University
Dennis Chan, Bunda Mulia University
Peng-Chia Chiu, The Chinese University of Hong Kong
Teresa Chu, University of Macau
Kaleed Jaarat, Middle East University
Edmund Keung, National University of Singapore
Kevin Li Chi Keung, The Open University of Hong Kong
Sudheer Kimar, Hurix.com
Paul Kimmel, University of Wisconsin—Milwaukee
Kurniawati, Bunda Mulia University
Raji Lakshmi, Pauls Engineering College, India
Jessica Lee, Hong Kong University of Science and Technology
Vincent Leung, Macao Polytechnic Institute
Tom Linsmeier, University of Wisconsin—Madison
Hsin-Tsai Liu, National Taiwan University
Daphne Main, Loyola University—New Orleans
Kingsley Olibe, Kansas State University
Can Ozturk, Cankaya University
Hannah Pantaran, Silliman University, Philippines
Fernando Penalva, IESE Business School
Nuchjaree Pichetkun, Rajamangala University of Technology, Thanyaburi
Nuraini Sari, Binus University
Dr. Charlie Sohn, University of Macau
Nai Hui Su (Suzanne), National Chung Hsing University
Sukarnen Suwanto, Indonesia
Professor Ting-Wong, National Chengchi University
Rita Yip, Lingnan University
Amy Zang, The Hong Kong University of Science and Technology
Stephen Zeff, Rice University
Ancillary Authors, Contributors, Proofers, and Accuracy Checkers
Ellen Bartley, St. Joseph's College
LuAnn Bean, Florida Institute of Technology
John C. Borke, University of Wisconsin—Platteville
Melodi Bunting, Edgewood College
Jack Cathey, University of North Carolina—Charlotte
Andrew Debbink, FASB
Jim Emig, Villanova University
Larry Falcetto, Emporia State University
Coby Harmon, University of California, Santa Barbara
Kimberly Hurt, Central Community College—Hastings
Mark Kohlbeck, Florida Atlantic University
Steven Lifl and, High Point University
Jill Misuraca, University of Tampa
Barbara Muller, Arizona State University
Yvonne Phang, Borough of Manhattan Community College
Laura Prosser, Black Hills State University
Lynn Stallworth, Appalachian State University
Alice Sineath, Benedictine University
Dick D. Wasson, Southwestern College
Lori Grady Zaher, Bucks County Community College
Practicing Accountants and Business Executives
From the fields of corporate and public accounting, we owe thanks to the following practitioners
for their technical advice and for consenting to interviews.
Tracy Golden, Deloitte LLP
John Gribble, PricewaterhouseCoopers (retired)
Darien Griffin, S.C. Johnson & Son
Michael Lehman, Sun Microsystems, Inc. (retired)
Michele Lippert, Evoke.com
Sue McGrath, Vision Capital Management
David Miniken, Sweeney Conrad
Robert Sack, University of Virginia
Clare Schulte, Deloitte LLP
Willie Sutton, Mutual Community Savings Bank, Durham, NC
Mary Tokar, IASB
Lynn Turner, former SEC Chief Accountant
Finally, we appreciate the exemplary support and professional commitment given us by the
development, marketing, production, and editorial staffs of John Wiley & Sons, including the
following: Michael McDonald, Emily Marcoux, Terry Ann Tatro, Margaret Thompson, Chris
DeJohn, Karolina Zarychta, Courtney Jordan, Anna Durkin, Jane Lee Kaddu, Jenny Welter, and
Maureen Eide. Thanks, too, to Jackie Henry and the staff at Aptara®, Inc. for their work on the
textbook.
Suggestions and comments from users of this book will be appreciated. Please feel free to e-mail
any one of us at AccountingAuthors@yahoo.com.
Donald E. Kieso
Somonauk, Illinois
Jerry J. Weygandt
Madison, Wisconsin
Terry D. Warfield
Madison, Wisconsin