中级财务会计英文ch14

Chapter14-1AccountingChangesandErrorAnalysisChapter14IntermediateAccounting12thEditionKieso,Weygandt,andWarfieldPreparedbyCobyHarmon,UniversityofCalifornia,SantaBarbaraChapter14-21.Identifythetypesofaccountingchanges.2.Describetheaccountingforchangesinaccountingprinciples.3.Understandhowtoaccountforretrospectiveaccountingchanges.4.Understandhowtoaccountforimpracticablechanges.5.Describetheaccountingforchangesinestimates.6.Identifychangesinareportingentity.7.Describetheaccountingforcorrectionoferrors.8.Identifyeconomicmotivesforchangingaccountingmethods.9.Analyzetheeffectoferrors.LearningObjectivesChapter14-3Whyareaccountingchangesmade?NewFASBpronouncementsChangingeconomicconditionsChanginginternalcircumstancesAccountingChangesReportingIssues&ApproachesChapter14-4Essentialissuesinreportingaccountingchanges:Whetheranaccountingchangeisallowed.Whethertorestateprioryears?financialstatements.Whethertorecognizetheeffectofthechangeinthecurrentyear’snetincomeorinthebeginningretainedearningsbalance.AccountingChangesReportingIssues&ApproachesChapter14-5TypeofAccountingChangeDefinitionChangeinAccountingPrincipleReplacesoneGAAPwithanotherChangeinAccountingEstimateSubstitutesonegood-faithestimateforanother,accordingtonewinformationorconditionsChangeinReportingEntityResultsinfinancialstatementsofadifferentreportingentityAccountingChangesChapter14-6TypeofAccountingChangeDefinitionChangeinAccountingPrincipleReplacesoneGAAPwithanotherChangeinAccountingEstimateSubstitutesonegood-faithestimateforanother,accordingtonewinformationorconditionsChangeinReportingEntityResultsinfinancialstatementsofadifferentreportingentityErrorcorrections...•Arenotclassifiedasaccountingchanges.•Doaffecttheincomeofpriorperiodsandrequirespecialtreatment.AccountingChangesChapter14-7RelevanceConsistencyPublicConfidenceObjectivesofReportingAccountingChangesChapter14-8TypesofAccountingChangesorReportingApproachErrorCorrectionsRequiredAccountingChanges:1.Changesinaccountingprinciplea.MostprinciplechangesRetroactiveApproachb.SpecifiedexceptionsRetroactiveApproach2.ChangesinaccountingestimatesProspectiveApproach3.ChangesinreportingentityRetroactiveApproach*ErrorCorrections:CorrectionsofaccountingerrorsRetroactiveApproachaffectingincomeofprioryearsAccountingPrincipleChangesChapter14-9Thefollowingarenotaccountingprinciplechanges:InitialadoptionofanaccountingprincipleAdoptinganaccountingprincipleforanewgroupofassetsorliabilitiesChangefrominappropriateaccountingprincipletoGAAPPlannedchangetostraight-linedepreciationChangeinaccountingprinciplethatcannotbedistinguishedfromachangeinaccountingestimateAccountingPrincipleChangesChapter14-10Threeapproachesforreportingchanges:1)Currently(cumulativeeffect).2)Retrospectively.3)Prospectively(inthefuture).FASBrequiresuseoftheretrospectiveapproach.ChangesinAccountingPrincipleChapter14-11Achangeinanaccountingprincipleisaccountedforbytheretrospectiveapplicationofthenewaccountingprinciple.Achangeinanaccountingestimateisaccountedforprospectively.Achangeinareportingentityisaccountedforbytheretrospectiveapplicationofthenewaccountingprinciple.Amaterialerrorisaccountedforbypriorperiodrestatement(adjustment).AccordingtotheprovisionsofFASBNo.154:BasicPrinciplesChapter14-12Acompanyaccountsforachangeinprinciplebytheretrospectiveapplicationofthenewaccountingprincipleasfollows:1.Thecompanycomputesthecumulativeeffectofthechangetothenewaccountingprincipleasofthebeginningofthefirstperiodpresented.Thatis,itcomputestheamountsthatwouldhavebeeninthefinancialstatementsifithadalwaysusedthenewprinciple.ContinuedRetrospectiveAdjustmentMethodChapter14-132.Thecompanyadjuststhecarryingvaluesofthoseassetsandliabilities(includingincometaxes)thatareaffectedbythechange.Thecompanymakesanoffsettingadjustmenttothebeginningbalanceofretainedearningstoreportthecumulativeeffectofthechange(netoftaxes)foreachperiodpresented.ContinuedRetrospectiveAdjustmentMethodChapter14-143.Thecompanyadjuststhefinancialstatementsofeachpriorperiodtoreflectthespecificeffectsofapplyingthenewaccountingprinciple.Thatis,eachitemineachfinancialstatementthatisaffectedbythechangeisrestatedtotheappropriateamountunderthenewaccountingprinciple.Thecompanyusesthenewaccountingprincipleinitscurrentfinancialstatements.ContinuedRetrospectiveAdjustmentMethodChapter14-154.Thecompany’sdisclosuresinclude(a)thenatureandreasonforthechangeinaccountingprinciple,includinganexplanationofwhythenewprincipleispreferable,(b)adescriptionoftheprior-periodinformationthathasbeenretrospectivelyadjusted,(c)theeffectofthechangeonincome,earningspershare,andanyotherfinancialstatementlineitemforthecurrentperiodandthepriorperiodsretrospectivelyadjusted,and(d)thecumulativeeffectofthechangeonretainedearnings(orotherappropriatecomponentofequity)atthebeginningoftheearliestperiodpresented.RetrospectiveAdjustmentMethodChapter14-16Thefollowingaccountingprinciplechangesaresubjecttotheretroactiveapproach:ChangefromLIFOtoanotherinventorymethodChangeinthemethodofaccountingforlong-termconstructioncontractsChangetoorfrom