BMIndexes.indd Page 1 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Company Index
Note: All page references to B-x and C-x are to Appendices B and C, which can be found online.
A BBB, 7-32 Canadian Natural Resources Committee of Sponsoring Accounting Standards Advisory BCE Inc., 4-69–4-70, 6-85, 7-33, Limited (CNRL), 4-5–4-6, Organizations of the Forum, 1-15 7-37–7-39, 7-52, 10-42, 12-4, 18-26 Treadway Commission Accounting Standards Board 17-47, 19-6, 19-29–19-33, Canadian Office of the (COSO), 2-33–2-34 (AcSB), 1-12, 1-13, 1-14, 1-21, 19-59, 21-1–21-2, 21-3 Superintendent of Financial Copyright Office, 12-18 2-3, 2-5, 2-8, 2-11, 6-48, 7-42, Becker Milk Company Limited, 7-59 Institutions, 5-67 Corby Spirit and Wine Limited, 16-1, 16-24, 16-38, 18-24, Bedrock Industries, 18-42 Canadian Pacific Railway Limited 22-85 19-11 Bell Aliant, 7-5, 19-29 (CP Railway), 11-16, 11-34, Corus Entertainment Inc., 12-30, Accounting Standards Committee Bell Canada, 12-17 11-70, 14-8, 19-6, 20-7, 20-32, 12-31–12-33, 13-39–13-40, (IASC), 1-14 Bell Media, 19-29 20-34–20-35, 20-87–20-88 13-42 Accounting Standards Oversight Bell Wireless, 21-1 Canadian Public Accountability CP Railway. See Canadian Pacific Council (AcSOC), 1-14 BHP Billiton plc, 10-75 Board (CPAB), 1-20 Railway Limited (CP Railway) AcSB. See Accounting Standards Bitcoin, 16-1 Canadian Radio-television and CPA Canada. See Chartered Board (AcSB) BlackBerry Limited, 12-8, 12-19, Telecommunications Professional Accountants of AcSOC. See Accounting Standards 13-34–13-35, 21-28 Commission (CRTC), 7-1 Canada (CPA Canada) Oversight Council (AcSOC) Boeing, 20-7 Canadian Real Estate Investment CPAB. See Canadian Public Adelphia Communications Corp., Bombardier Inc., 5-69, 6-11–6-12, Trust (CREIT), 15-4 Accountability Board (CPAB) 10-29, 22-38 6-55, 14-1, 15-55, 19-6, 22-85 Canadian Securities Administrators CPPIB. See Canada Pension Plan AEterna Zentaris Inc., 12-69 Boston Pizza, 15-4 (CSA), 1-20, 1-24, 4-69, 5-1, Investment Board (CPPIB) AGF Management Limited, 11-70 BP plc, 10-33–10-34 11-12, 15-1, 17-46 CRA. See Canada Revenue Agency Agrium Inc., 7-19, 8-4, 19-59 Brand Finance plc, 12-17 Canadian Securities Exchange (CRA) Ainsworth Lumber Co., 22-1 Brick Brewing Company Limited, (CSE), 1-1 Crombie Real Estate Investment Air Canada, 2-7, 3-9, 5-9–5-10, 5-25, 4-27–4-28, 4-29 Canadian Tire Bank, 7-30 Trust, 12-69 6-12, 6-45, 9-7, 10-63, 11-5, British Airways plc, 5-9, 11-5, 12-68, Canadian Tire Corporation, CRTC. See Canadian 11-7, 11-72, 13-33, 13-34, 22-33, 23-58 Limited, 5-11, 7-19–7-20, 7-30, Radio-television and 13-37–13-38, 14-55, 16-77, British Columbia Securities 7-32, 7-33, 7-73, 8-18, 8-82, Telecommunications 17-22, 18-19, 18-32, 19-4–19-5, Commission, 1-17 11-70, 13-80–13-81, 14-29–14-30, Commission (CRTC) 19-34, 19-59, 20-7, 20-32, British Sky Broadcasting Group 14-31, 15-56, 16-80, 21-23 CSA. See Canadian Securities 20-88, 23-58, C-13 plc, 17-46 Canadian Utilities Limited, Administrators (CSA) Air Canada Centre, 23-1 Brookfield Asset Management Inc., 7-39–7-40, 10-8–10-9 CSE. See Canadian Securities Air France-KLM Group, 11-72 10-1–10-2, 10-27, 10-75, 11-69, Canopy Growth Corporation, Exchange (CSE) Air Products & Chemicals, 16-6 11-70, 12-17, 14-54–14-55, 16-81 8-39–8-40, 8-44 Airbnb, 4-1 Brookfield Office Properties Inc., 4-68 Carestream Health, 4-20 D Airbus Group S.E., 6-85, 8-4, 14-1 Brookfield Property Partners, CBC, 18-43 Dell, 16-1 Alacer Gold, 11-13 L.P., 5-11 CBS, 15-14 Dental Digital, 4-20 AlarmForce Industries Inc., Burger King, 18-1 Cendant, 1-19 Deutsche Bahn, 18-83 21-20–21-21 Centerra Gold Inc., 7-8–7-9 Deutsche Lufthansa AG, 13-81 Alimentation Couche-Tard Inc., 18-83 C Certified General Accountants Duff & Phelps, 12-27 Alta Vista Ventures Ltd., 1-1 Cameco Corporation, 4-25–4-26, Association of Canada (CGA AltaGas Ltd., 22-85 4-34–4-35, 15-22–15-24, Canada), 15-48 E Amazon.com, 8-1, 12-4, 12-17, 16-26 15-25–15-26 CGI, 6-51 EADS NV. See European Aeronautic American Accounting Association, Canada Goose Holdings Inc., 17-1 Chapters, 8-13 Defence and Space Company 2-33 Canada Life Financial Corporation, Chartered Professional Accountants (EADS NV) American Institute of Certified 9-6–9-7, 9-41–9-43 of Canada (CPA Canada), East Japan Railway Company, 18-83 Public Accountants, 2-33 CanadaCOPYRIGHTED Pension Plan Investment MATERIAL1-13, 2-19, 2-30, 4-38, 10-4, Eastman Kodak Company, 5-5–5-6 Andrew Peller Limited, 7-52, 8-82 Board (CPPIB), 1-8–1-9 15-48, 22-68 Easton, 5-37 ANZ bank, 3-1 Canada Post, 15-3, 19-1, 19-3 Choice Properties Real Estate Eaton’s, 18-27 Apple Inc., 4-1, 12-8, 12-17, 12-34, Canada Revenue Agency (CRA), Investment Trust, 15-4 eBay, 16-1 15-14, 21-28 4-30, 5-67, 8-30, 8-32, 8-48, Chorus Aviation Inc., 20-88 ECT Merchant Investments Arthur Andersen, 1-3 9-10, 11-12, 13-14, 13-15, CIBC, 5-67–5-68, 7-7, 12-17 Corp., 2-11 Atlas Cold Storage Income Trust, 13-17, 15-17, 18-4, 18-27, CICA. See Canadian Institute of EDGAR, 4-70, 23-17 10-29, 22-38 18-35, 18-43, 19-15, 20-9 Chartered Accountants Eli Lilly and Company, 8-5, 12-20 Atmosphere, 7-73 Canadian Derivatives Exchange, (CICA) EMI Music Publishing, 12-18 ATV Music Publishing, 12-18 16-3 Cicis, 4-20 Empire Company Limited, 5-19–5-20, Auditing and Assurance Standards Canadian Institute of Chartered Cinefilm (CF), 15-57–15-58 7-10–7-11, 7-74, 8-47–8-48, Board (Canada), 23-17 Accountants (CICA), 1-13, CIPO. See Canadian Intellectual 8-82–8-83, 9-7, 10-74–10-75, A&W, 15-4 22-68 Property Office (CIPO) 13-41, 13-80, 14-55, 18-83 Canadian Intellectual Property Citicorp, 20-6 Enbridge, 15-4, 22-1 B Office (CIPO), 12-16, 12-18, ClubLink, 9-7 Enron Corporation, 1-3, 1-19, Bank of Canada, 16-5 12-19, 12-20 Coca-Cola Company, 6-86, 12-4, 2-11, 2-21, 2-32, 5-67, 5-68, Bank of Montreal, 4-69, 12-17, Canadian National Railway 12-17, 12-21 14-27, 21-54 15-9, 15-56 Company, 11-70, 18-83, CoinDesk.com, 15-1 Ericsson, 12-8 Bank of Nova Scotia, 15-9 20-87–20-88 Coles, 8-13 Ernst & Young (EY), 16-1 I-1 BMIndexes.indd Page 2 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-2 COMPANY Index
European Aeronautic Defence and I 8-21, 8-82–8-83, 10-74–10-75, OPG. See Ontario Power Generation Space Company (EADS NV), IASB. See International Accounting 11-33, 12-69, 14-55, 18-20, (OPG) 6-85 Standards Board (IASB) 18-40–18-41, 18-83, 19-59, 20-87 Organisation for Economic European Financial Reporting IASC. See Accounting Standards London School of Economics, 20-4 Co-operation and Development Advisory Group, 1-21 Committee (IASC) London Stock Exchange, 17-46 (OECD), 9-1, 18-1, 18-3–18-4 IBI Group Inc., 5-12–5-13 Lord & Taylor, B-1, B-7, B-17 Orphan Well Association, 11-1 F ICBC, 12-17 Lord & Taylor Acquisition Inc., OSB. See Office of the Facebook, 6-1, 12-19, 18-43 IFRIC. See IFRS Interpretations B-7, B-8 Superintendent of Bankruptcy Fairfax Financial Holdings Committee (IFRIC) lululemon athletica inc., 12-3–12-4 (OSB) Limited, 5-37 IFRS Advisory Council, 1-15 Lyft, 4-1 OSC. See Ontario Securities Falconbridge Ltd., 11-20 IFRS DG. See IFRS Discussion Commission (OSC) FASB. See Financial Accounting Group (IFRS DG) M Oxford Industries, 22-38 Maclean’s, 13-33 Standards Board (FASB) IFRS Discussion Group (IFRS DG), Magna International Inc., 7-4, 10-74 FEI Canada, 19-26 1-14, 6-24, 14-24 P Mainstreet Equity Corp., 4-68 Pacific Safety Products Inc. (PSP), FGL Sports, 7-73 IFRS Foundation, 1-15 Management Commentary 13-9, 13-11 Financial Accounting Standards IFRS Interpretations Committee Consultative Group, 23-36 Papa John’s International, Inc., 17-1 Board (FASB), 1-12, 1-13, (IFRIC), 1-15, 1-18 Manufacturers Hanover Trust Patent Office, 12-19 1-16, 1-23, 2-4, 6-1, 7-41, IFRS Taxonomy Consultative Co., 7-42 PayPal, 6-1, 7-42 7-42, 17-28, 18-18, 18-24, Group, 1-24 Manulife Financial Corporation, PCAOB. See Public Company 18-33, 18-45, 19-11, 19-26, IIRC. See International Integrated 19-6 Accounting Oversight Board 20-4, 20-5, 22-10 Reporting Committee (IIRC) Maple Leaf Foods Inc., 3-39–3-40, (PCAOB) Financial Executives Institute IMAX, 12-19 5-69, 7-72, 18-82–18-83 Peekaboo Beans Inc., 23-24 Canada, 19-26 Impak Finance Inc., 15-1 Maple Leaf Sports & Entertainment Pembina Institute, 11-1 Financial Executives International, Imperial Metals Corporation, 10-8 Ltd., 23-1 PepsiCo, 6-86 2-33, 12-27 Indigo, 8-13 Maple Lodge Farms, 15-4 Performance Sports Group, 5-37 Financial Executives Research Indigo Books & Music Inc., 8-13, 9-7 Marks & Spencer Group plc, 13-42 PetroCanada, 7-4, 10-21 Foundation, 12-27 Innovation, Science and Economic Mark’s Work Wearhouse, 7-73 P&G. See The Procter & Gamble Financial Reporting in Canada, Development Canada, 12-16 MasterCard, 7-31, 13-44 Company (P&G) 12-30 Institute of Internal Auditors, 2-33 McCain Foods Limited, 15-4, Pixar Inc., 21-28 Find @ Lord & Taylor, B-7 Institute of Management 16-7, 16-8 Potash Corporation of Saskatchewan Ford Motor Company, 8-57, 23-40 Accountants, 2-33 McDonald’s Corporation, 4-21, Inc., 7-19, 8-4, 9-78, 16-80, International Accounting Standards 16-7, 16-8 19-59 Board (IASB), 1-7, 1-12, 1-13, G Metallgesellschaft, 16-6 PricewaterhouseCoopers (PwC), GALERIA Holding GmbH, B-7 1-14–1-16, 1-18, 1-21, 1-22, Microsoft, 12-8, 12-35 16-1, 19-5, 20-1 Galeria INNO, B-1, B-7 1-23, 1-24, 2-1, 2-4–2-5, 2-7, MiningWatch Canada, 11-1 The Procter & Gamble Company Galeria Kaufhof, B-1, B-7 2-8, 2-11, 2-34–2-35, 3-13, Molson Coors Brewing (P&G), 6-85–6-86, 16-6 Gateway Casino, 15-4 3-28, 4-39, 5-38–5-39, 6-10–6-11, Company, 17-46 Province of Saskatchewan, 15-22 General Electric, 16-54 6-13, 6-14, 7-41, 7-42, 8-38, Moody’s Investor Service, 14-1, 14-6 Public Company Accounting General Mills, 6-42 9-3, 9-32–9-33, 9-48, 10-36, Morningstar Canada, 22-1 Oversight Board (PCAOB), General Motors, 19-26 11-12, 11-36, 12-9, 12-37, 13-4, 1-19 Geodis, 8-1 13-45–13-48, 14-24, 14-27, N Public Sector Accounting Board, Gilt, B-1, B-7, B-8 14-32, 15-23, 15-30, 16-1, 16-6, NASDAQ, 17-1 10-4 Gilt Groupe Holdings Inc., B-7 16-19, 16-38, 16-55, 16-56, National Association of PwC. See PricewaterhouseCoopers Glacier Credit Card Trust, 7-32 17-5, 17-15, 17-28, 18-8, Accountants, 2-33 (PwC) Glencore PLC, 8-36–8-37 18-24, 18-28–18-29, 18-33, Nestlé SA, 23-59 Global UAV Technologies, 1-1 18-39, 18-43, 18-45, 19-9, Netflix, 4-1 Q Goldcorp Inc., 5-70, 15-57 19-11, 20-4, 20-5, 20-9, 20-11, New York Stock Exchange (NYSE), Quebecor Inc., 5-70, 12-35, 12-69 Google, 12-4, 12-8, 12-17, 12-19 21-3, 21-27, 21-70, 22-40, 1-16, 4-22, 19-29 Google Wallet, 6-1 23-4–23-5, 23-10, 23-12–23-13, Newfield Exploration, 10-75 R Government of Alberta, 11-19 23-36, B-17, B-18 Nexfor Inc., 15-14 Rakuten Inc., 8-13 Great Canadian Gaming International Financial Reporting Nike, Inc., 12-68 Raymond James Ltd., 22-1 Corporation, 4-24, 4-25 Standards Foundation Nortel Networks, 12-8, 12-19 Receiver General for Canada, 13-16 (IFRSF), 6-11 NSB Group, 18-83 Reitmans (Canada) Limited, H International Integrated Reporting Nutrien Ltd., 7-19, 8-4, 19-59 13-43–13-45 HBC. See Hudson’s Bay Company Committee (IIRC), 1-24 NYSE. See New York Stock Research In Motion, 21-28 (HBC) Intertape Polymer Group Inc., 11-12 Exchange (NYSE) Rhône Capital LLC, B-7 HBS Global Properties LLC, B-7 iTunes, 4-1 RioCan-HBC Limited Partnership, The Hershey Company, 11-31–11-32 O B-7, B-21 Hilton, 13-30 J OECD. See Organisation for RioCan Real Estate Investment Jazz Aviation LP, 20-88 Hollinger International Inc., 11-12 Economic Co-operation and Trust, 22-1, B-7 The Jean Coutu Group (PJC) Inc., 8-4 Home Outfitters, B-7 Development (OECD) Ripple Brand Collective, LLC, 11-31 JELD-WEN, 4-20 Honda Canada Finance Inc., 20-36 Office of the Superintendent of Rite-Aid, 1-19 Honeywell Inc., 15-13 K Bankruptcy (OSB), 23-25, Rockstar, 12-8 HTC, 12-8 Kirkland Lake Gold Ltd., 4-68 23-26 Rogers Centre, 23-1 Huawei, 12-8 Kobo Inc., 8-13 Onex Corporation, 4-17–4-20, Rogers Communications Inc., 6-13, Hudson’s Bay Company (HBC), KPMG, 6-12–6-13, 18-1 4-22, 4-23 12-17, 23-1, 23-7–23-9 3-39, 4-6, 4-8, 5-69, 6-85, 7-4, KraussMaffei, 4-20 Ontario Power Generation Rogers Media Inc., 13-33 8-4, 8-45, 8-47, 8-81, 9-77–9-78, (OPG), 11-4 Rogers Sugar Inc., 15-57 13-30, 15-56, 17-46, 21-69, L Ontario Securities Commission Roots Canada, 12-3 22-84, 23-7, B-1–B-21, C-28 Linamar Corporation, 5-13–5-14 (OSC), 1-12, 1-13, 1-17, 4-36, Royal Bank of Canada (RBC), 4-68, Hudson’s Bay Europe, B-7, B-8 Livent Inc., 1-19, 2-22, 10-29 4-37, 15-1, 23-3–23-4, 23-17 4-69, 9-5–9-6, 9-78, 12-17, Husky Energy Inc., 11-14, 11-20, Loblaw Companies Limited, 2-10, Open Media, 18-43 15-56, 19-15 18-26 5-28–5-29, 5-40, 6-42, 7-74, Open Text Corporation, 11-33–11-34 RPX, 12-8–12-9 BMIndexes.indd Page 3 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-3
S Simon HBC Opportunities LLC, B-7 Thomson Reuters Corporation, 5-70, U.S. Federal Reserve, 5-67 Sagard Holdings Inc., 5-37 Simon Property Group Inc., B-7 12-28, 13-35, 21-69–21-70, U.S. Justice Department, 5-67 Saks, 3-39, B-8, B-16, B-17 Sitel Worldwide, 4-20 23-59 U.S. Steel Canada Inc., 18-42 Saks Fifth Avenue, B-1, B-7 Sky plc, 17-46 Tim Hortons, 12-14, 12-17, 13-31, U.S. Steel Corporation, 18-42 Saks Fifth Avenue OFF 5TH, B-7 SmithBooks, 8-13 18-1 USI, 4-20 Saks Fifth Avenue OFF 5TH Sobeys Inc., 5-20, 9-7 TokenFunder Inc., 15-1 Europe, B-7 Sony/ATV Music Publishing, Toronto Blue Jays Baseball Club, V Saks Incorporated, B-7 12-18 23-1 Valeant Pharmaceuticals Saks OFF 5TH, B-1 Sony Corporation, 12-8, 12-18 Toronto FC, 23-1 International, 5-17 Samsung, 12-8, 12-17 Sport Chek, 7-73 Toronto Maple Leafs, 23-1 VIA Rail Canada Inc., 13-31 Scotiabank, 12-17 Sportarena, B-7 Toronto Raptors, 23-1 Visa, 7-31, 13-44 Sears Canada Inc., 18-27 Sports Experts, 7-73 Toronto Stock Exchange (TSX), SEC. See Securities and Exchange Standard & Poor’s, 4-31, 14-6 1-1, 1-17, 3-11, 3-12, 4-22, 7-8, W Standards Interpretation 12-13, 15-1, 15-4, 17-1, 18-42, Commission (SEC) W Network, 12-31 Committee (SIC), 1-18 19-29, 20-88, 22-1, B-7 Securities and Exchange Wall Street Journal, 7-42, 23-16 Stantec Inc., 7-19, 22-34–22-35, Torstar Corporation, 4-29–4-30, Commission (SEC), 1-12, 1-16, Walmart Stores Inc., 2-10, 3-1, 4-5, 22-36, 22-37 15-10, 23-13–23-14 1-23, 2-34, 3-1, 4-70, 5-6, 5-67, 4-6, 8-1, 8-47, 8-57, 13-37 The Stars Group Inc., 11-70 Toyota Motor Corporation, 3-40, 8-4 15-11, 23-16, 23-17 WestJet Airlines Ltd., 13-34, 14-55, Stelco Inc., 18-42 TransAlta Corporation, 10-8, 11-19 SEDAR, 4-69, 4-70, 5-69, 5-70, 6-85, 20-1, 20-7, 20-32, 21-70, C-13 Stora Enso Oyj, 8-81–8-82, 10-74 TransAlta Renewables Inc., 23-23 7-72, 7-73, 7-74, 8-82, 9-78, Whitewing, 2-11 Sunbeam, 1-19 Treehouse, 12-31 10-75, 11-69, 11-70, 12-69, 14-54, WorldCom Inc., 1-3, 10-29, 22-38 14-55, 15-55, 15-56, 15-57, Suncor Energy Inc., 7-4–7-5, 19-6 TripAdvisor Inc., 3-40 16-80, 16-81, 18-82, 18-83, Swiss Water Decaffeinated, 15-4 TSX. See Toronto Stock Exchange 19-60, 20-87, 20-88, 21-69, 21-70, (TSX) X Xerox, 16-54 22-85, 23-17, 23-58, 23-59, B-1 T TSX Venture Exchange, 15-4 Shopify Inc., 5-20–5-21 Tax Foundation, 18-1 TWC Enterprises Limited, 5-16, 9-7 Shoppers Drug Mart, 11-33, 13-30 TD Bank, 12-17 Twitter, 18-43 Y Shortcovers, 8-13 TELETOON, 12-31 Yellow Pages Ltd., 12-1, 15-4 Showa Shell Sekiyu, 16-6 TELUS Corporation, 4-22, 4-23–4-24, U YTV, 12-31 SHOWCASE, 12-31 6-85, 7-1, 7-3, 7-70, 12-17 Uber, 4-1 Simmons & Company Tesla Motors, 13-1, 13-4, Union Pacific Railroad Corp., 18-83 Z International, 11-14 13-26–13-27 U.S. Congress, 20-5 Zynga Inc., 6-1 Subject Index
Note: All page references to B-x and C-x are to Appendices B and C, which can be found online.
A accounting changes retrospective restatement, accounting income, 18-5–18-6 abnormal shortages, 8-50 accounting standards, 21-9–21-10 21-14–21-21 accounting information system, abnormal terms, 6-7 alternative accounting methods, summary of, 21-24 1-24, C-2 accelerated amortization, 11-10 21-8–21-9 transitional provisions, 21-9 see also accounting cycle account, C-3 analysis, 21-24–21-26 types of accounting changes, accounting equation, C-4–C-5 see also specific types of approaches, 21-8–21-9 21-4–21-7 basic terminology, C-2–C-4 accounts change in accounting estimate, voluntary change, 21-5 accounting oversight board, 1-19 contra account, 7-12 21-4 accounting cycle, C-5, C-6 accounting policies, 4-35, 5-23, crediting the account, C-3 change in accounting policy, adjusting entries, C-8–C-19 21-26, 23-6–23-7, 23-35 debiting the account, C-3 21-3–21-7 see also adjusting entries see also change in accounting writing off an account, 7-18 correction of a prior period error, adjustments. See adjusting entries policy account sales, 6-41 21-4, 21-7–21-8 closing process, C-20–C-23 accounting policy changes, 4-33 accountants’ role, 2-33 current approach, 21-9 financial statements, C-19–C-20 accounting profit, 18-5 accounting disclosure, 21-14, 21-20–21-21, identification of transactions and accounting standards, 1-12 accrual-basis accounting, 1-8, 21-22–21-23, 21-27 other events, C-5 see also Accounting Standards for 2-23, 4-39–4-44 IFRS-ASPE comparison, journalizing, C-5–C-6 Private Enterprises (ASPE); aggressive accounting, 1-11 21-26–21-27 ownership structure, C-19–C-20 International Financial and capital allocation, 1-4–1-5 and interim reporting, 23-15–23-16 posting, C-7 Reporting Standards (IFRS); challenges and opportunities, interpretation of, 21-26 recording transactions and other standard setting 1-19–1-25 motivations for change, 21-24–21-26 events, C-5 Accounting Standards Board conservative accounting, 1-11 presentation, 21-27 reversing entries, C-22–C-23 (AcSB), 1-12, 1-13–1-14, 1-18, defined, 1-3 prospective application, 21-9, trial balance, C-8 1-21–1-22, 7-42 essential characteristics of, 1-3 21-21–21-24 accounting equation, C-4–C-5 conceptual framework, 2-5 financial accounting, 1-3 reasons for, 21-3 basic accounting equation, C-4 private entities, 2-11–2-12 goals and purposes, 2-4 restatement, 21-10 expanded basic equation, C-4 projected benefit method, 19-11 language of, 2-12 retrospective application, 21-8, accounting errors, 23-7 redeemable preferred shares, managerial accounting, 1-3 21-9, 21-10–21-21, 21-24 accounting guidelines, 1-18 16-38 BMIndexes.indd Page 4 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-4 Subject Index
Accounting Standards for Private earnings per share (EPS), non-financial obligations, 13-23 accounts receivable, 5-7, 7-9–7-11 Enterprises (ASPE), 1-13, 21-4 17-3–17-4 off–balance sheet financing, 14-27 see also receivables see also generally accepted effective interest method, operating leases, 20-31–20-32, aging method, 7-15 accounting principles 14-12–14-13 20-34, 20-37–20-38, 20-53 aging schedule, 7-15 (GAAP); IFRS-ASPE equity instruments, 16-22 other comprehensive income allowance method, 7-16–7-18 comparison equity valuation at zero, 16-25 items, 4-13, 15-23, 16-45 analysis of, using work sheet, 22-44 accounting changes, 21-4, 21-24 expense-based approach, past service costs, 19-8, 19-13 cash discounts, 7-12 accounting income, 18-5 13-27, 13-30 pension plan, disclosure, direct and indirect method, 22-26 accounting policies, 21-26, 23-7 expenses, 4-28–4-29 19-28–19-29 direct method, 22-14 accounting policy changes, 4-33 fair value, 2-28–2-29 post-employment benefits, direct write off method, 7-20 amortization method not fair value option, 2-28–2-29, 14-19 19-8, 19-27 effects on accounts, 7-18–7-20 specified, 7-23 financial assets, 7-14 premiums and coupons, 13-32 estimating uncollectible trade asset retirement costs, 10-9 financial instruments, 5-8 primary sources of GAAP, 21-4 accounts receivable, 7-14–7-16 associates, investments in, financial liabilities, 13-6, 16-22 principles-based approach, expected credit losses, 7-41 9-32–9-38, 9-43–9-44 financial statements, names 1-23, 2-32 extensive accounts receivable, 7-4 assurance-type warranty, 13-27 of, C-3 “probable,” 2-18 gross average accounts receivable bank overdrafts, 7-8 forfeitures, 16-35 product costs, 8-18 (GAAR), 7-19 basic presentation requirements, full cost method, 10-22 professional judgement, 1-19 impairment, 7-14–7-20 4-21 future income tax assets, 5-18 projected benefit method prorated indirect method, 22-18 biological assets and agricultural future income tax method, on services, 19-12n lifetime expected credit losses, 7-14 produce, 8-37–8-38 18-10, 18-40 purchase commitments, 16-9 management of, 7-5 book value method, 16-27–16-28 future tax expense or benefit, reacquisition of shares, 15-14 measurement, 7-11–7-14 borrowing costs, 8-19, 10-8 18-25 rearrangement and reinstallation measurement after acquisition, buildings, 10-20 FV-OCI investments, 18-39 costs, 10-33 7-14 callable debt, 13-11 goodwill, 12-28–12-30, 12-30–12-31 receivables, 7-33–7-34, 7-35, 7-37 monitoring, 7-5 capital leases, 20-31–20-32, guaranteed residual value, 20-25 reclassification of debt as net realizable value (NVR), 7-15 20-37–20-38 hedge accounting, 16-42, 16-44, current, 13-11 nonrecognition of interest capitalization of costs, 10-7 16-45–16-48, 16-49 recoverability test, 11-22 element, 7-13–7-14 cash equivalents, 7-8 held for sale, 4-16, 11-27–11-28 related-party transactions, percentage-of-receivables cash flows, classification of, 22-6 immediate recognition approach, 23-18, 23-19 approach, 7-15 change in accounting estimate, 19-17 replacements, major overhauls, percentage-of-sales approach, 7-17 21-22–21-23 impairment, 9-26–9-27, 9-31, and inspections, 10-32 previously written off account, 7-18 collectibility, 6-14 11-21 residual value method, 16-25 provision matrix, 7-15 commodities contracts, 16-9 impracticable, 21-10 retained earnings statement, recognition, 7-11–7-14 completed-contract method, income, 4-12 4-32–4-34 sales discounts, 7-12 6-49, 6-56 income statement, 4-22 retrospective application, 21-14 sales returns and allowances, components, 10-6, 11-5 income statement approach, 2-21 retrospective restatement, 21-14 7-12–7-13 comprehensive income and other incurred loss impairment revenue approach, 13-30 securitization, 7-1 comprehensive income, 2-16 model, 9-26 revenue recognition, 6-20 trade discounts, 7-12 comprehensive revaluation, 15-33 indefinite life, 12-15 revenues, 2-15 types of, 7-4 contingencies, 5-19, 5-22, indefinite-life intangibles, 12-23 sales returns and allowances, written off, 7-18 13-41–13-42 intangible assets, 12-30–12-31 7-12–7-13 accretion, 13-25 contingent liability, 13-35 interest, and defined benefit sales revenues, and returns, 6-23 accrual basis, 4-39 contingent loss, 13-35–13-36 plan, 19-12 service-type warranty, 13-27 see also accrual-basis accounting contract criteria, 6-14 interest rate swap, 16-46, settlement rate, 19-12 accrual-basis accounting, 1-8, 2-23 contract modification, 6-15 16-47–16-48 share appreciation rights accrued expenses, C-15–C-17 control, 2-20, 9-38, 9-40 interim reporting, 23-13 plans, 16-51 conversion from cash basis, convertible debt at time of inventory, 8-7 share-based payments, 10-13 4-41–4-43 conversion, 16-28 inventory cost, 8-17 short-term liability expected to be equity method, 9-33 cost model, 9-9–9-10, 10-23, 12-13 investment measurement refinanced, 13-12–13-13 and estimates, 4-8 cost recovery impairment model, models, 9-47 significant influence, 9-33, expense calculation, 4-42–4-43 11-21–11-22, 11-25, 11-26, investment property, 10-21 9-37, 9-40 revenue calculation, 4-41–4-42 12-21 investments, 9-8, 9-15 statement of cash flows, 22-9, vs. cash basis accounting, current assets, 9-40 issued but unpaid-for shares, 22-30 4-39–4-41 current liabilities, 13-8 15-11 straight-line method, 7-26–7-27, accruals, C-9 and customer loyalty programs, and large stock dividend, 15-21 7-28, 9-13, 14-11 accrued expenses, C-9, C-15–C-17 13-31 leases, 20-8–20-9, 20-9–20-10, subsequent events, 23-22–23-23 accrued liabilities, 22-29, 22-46 decommissioning and restoration 20-13–20-15, 20-31–20-32, subsidiaries, investments in, accrued revenues, C-9, C-14–C-15 obligations, 13-23, 13-26 20-34, 20-46, 20-48, 20-49–20-51, 9-38–9-39 adjusting entries, C-14–C-17 deferred tax assets and liabilities, 20-53–20-55 tax basis, 18-11 reversing entries, C-22–C-23 18-36 lessees, 20-11–20-35 taxable income, 18-5 accrued expenses, C-9, C-15 defined benefit obligation, 19-18 lessors, 20-36–20-49 taxes payable method, 18-39 accrued interest, C-15–C-16 defined benefit plan, 19-8, 19-15, levels of GAAP, 21-4 transaction costs, 6-21, 7-23 accrued salaries, C-16–C-17 19-16–19-17, 19-25 liabilities, definition of, 13-5 unincorporated businesses, adjusting entries, C-15–C-17 depreciation, 11-5 liabilities, essential 23-24–23-25 accrued interest, C-15–C-16 derecognition of receivables, characteristics, 13-5 valuation allowance, 19-25 accrued liabilities, 22-29, 22-46 7-33–7-34, 7-35, 7-41 liabilities, recognition of, 5-23 voluntary change, 21-5 accrued revenues, C-9, C-14 derivatives, 16-19 limited-life intangibles, 12-21 warranties, 13-27–13-28 accrued salaries, C-16–C-17 direct method, 22-9 long-term contracts, 6-49 Accounting Standards Oversight accumulated benefit method, 19-10 disclosure, 12-30–12-31, 23-6 measurement uncertainty, 21-23 Council (AcSOC), 1-14 accumulated depreciation, 22-19, disclosure, long-term debt, 14-29 mixed measurement model, 16-39 accounting theory, 1-10 22-28, 22-45 earnings approach, 6-11, 6-35–6-36, non-consolidated entities, 14-27 accounts payable, 13-9, 22-19, Accumulated Depreciation account, 6-47–6-48 and non-financial liabilities, 13-7 22-29, 22-46 10-24–10-25 BMIndexes.indd Page 5 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-5
accumulated other comprehensive common-size analysis, 23-32–23-34 identification of separate on statement of financial income, 4-32, 5-20, 15-22, comparison of operating performance obligations, position, 5-8 15-25, C-20 results, 12-35 6-16–6-20 tangible capital assets, 3-5, 10-4 Accumulated Other Comprehensive current liabilities, 13-42–13-45 identification of contract with tax base of an asset, 18-11 Income account, 4-14, C-21 defined benefit plan, 19-34 customers, 6-13–6-16 that become liabilities, 11-1 accumulated rights, 13-19–13-21 earnings per share (EPS), 17-5 recognition of revenue when useful life, C-11 acid test ratio, 5-5, 5-41, 13-43, 23-31 error analysis, 21-27–21-38 each performance obligation wasting assets, 10-21 acquirer, 12-4 financial statement analysis, satisfied, 6-32–6-35 assets test, 23-11 acquisition cost, 2-26, 10-19 23-29–23-35 summary of process, 6-35 associates, 9-32–9-38, 9-43–9-44, AcSB. See Accounting Standards financial statements, 4-36 asset-linked debt, 14-4 22-27, 22-44 Board (AcSB) goodwill, 12-34–12-35 asset retirement costs, 8-18, 10-9 assurance-type warranty, 6-18, 6-48, active market, 12-13 horizontal analysis, 23-32–23-33 asset retirement obligation (ARO), 13-27, 13-28–13-29 activity methods of depreciation, income statement, 4-36, 23-34 13-22–13-26 asymmetric prudence, 2-1 11-11–11-12 income taxes, 18-42–18-43 asset retirement obligations, 11-1 attribution period, 19-12 activity ratios, 5-5, 5-40, 5-41, 23-31 information-rich analysis, 5-40 asset turnover, 5-41, 23-31 audit, 1-5 actual return on plan assets, 19-15 intangible assets, 12-34–12-35 assets, 2-12–2-13 audit committees, 1-20 actual use, C-11 investments, 9-44 see also specific types of assets auditing standards, 2-7 actuarial assumptions, 19-9 long-term debt, 14-30–14-31 biological assets, 6-48, 8-37–8-40, auditors, 1-5, 2-7, 23-16–23-17 actuarial gains and losses, 19-13, measurement uncertainty, 4-36 8-52, 10-22, 10-27 auditor’s report, 23-26–23-29 19-17, 19-22–19-25, 19-35 missing values, 12-34–12-35 capital asset, 18-11 authorized plan to sell, 4-15–4-16 actuaries, 19-9 multiple differences, income classes, 10-23 available for sale investments, additions, 10-29, 10-30 taxes, 18-20–18-23 classification in statement of 9-7, 9-20 adjunct account, 5-26 notes to financial statements, 4-36 financial position, 5-7 see also fair value through other adjusted market assessment pension plan, 19-34 contingent assets, 13-4, 13-35 comprehensive income approach, 6-29 property, plant, and equipment, contract assets, 6-42–6-44 (FV-OCI) adjusted trial balance, C-3 11-32–11-35 contractual rights, 2-12–2-13 average days to sell inventory, 8-45 adjusting entries, C-3, C-8–C-19 ratio analysis. See ratio analysis contractual rights to receive avoidable borrowing costs, 10-8, accruals, C-9, C-14–C-17 receivables, 7-39–7-40 cash, 5-8 10-38, 10-39–10-40 estimated items, C-9, C-17–C-18 sensitivity analysis, 22-38 contributed assets, 10-18–10-19 prepayments, C-9, C-10–C-13 shareholders’ equity, 15-26–15-29 current assets, 5-10–5-15, 11-20 B types of, C-9 statement of cash flows, current vs. non-current bad debt expense, 7-17–7-18 when required, C-9 22-36–22-39 classification, 2-26 bad debts, 7-14, C-9, C-17–C-18 work sheet, C-24–C-25 statement of financial position, deferred income tax assets, 5-18 balance sheet, 1-3, 5-4, 13-41, C-3 advances, 7-10 4-36, 5-4 deferred tax assets, 18-10, see also statement of financial adverse opinion, 23-29 of transactions, 22-41–22-47, C-5 18-15–18-19, 18-36–18-37, position (balance sheet) adverse selection, 1-10–1-11, 2-5 trend analysis, 23-30, 23-34 18-43, 18-47–18-48, 18-52 balance sheet approach, 2-21 affirmative judgement approach, vertical analysis, 23-33–23-34 definition, 2-12–2-13 bank accounts, 7-42–7-43 18-33 annual information forms, 23-3 disposal of assets. See disposition bank charges, 7-45 aggressive accounting, 1-11 annuities, 3-20–3-22 exploration and evaluation assets, bank credits, 7-45 aging method, 7-15 annuity due, 20-32, 20-40–20-42 11-14 bank drafts, 7-6 aging schedule, 7-15 anticipated purchases, 16-48–16-50 financial assets, 5-8, 5-13, 7-6 bank errors, 7-45 agricultural produce, 8-37–8-40, antidilutive securities, 17-12, fixed assets, 10-4 bank indebtedness, 13-8–13-9, 13-41 8-52 17-20–17-21 function, 5-7 bank loans, 13-41 all-inclusive approach, 4-12 arbitrageurs, 16-8 future income tax assets, 5-18, see also bank indebtedness allocation, 13-24–13-26 arm’s-length reciprocal transaction, 18-10, 18-15 bank overdrafts, 7-7–7-8, 7-9, 22-5 allocation technique, 2-22 14-17 held for sale, 4-15–4-16 bank reconciliation, 7-45–7-47 allowance account, 7-17–7-18 arm’s-length transaction, historical cost, 5-6 bankruptcy, 23-25–23-26 allowance for doubtful accounts, 2-26, 6-5 identifiable, 12-5 bargain purchase, 12-26–12-27 22-26, 22-45 ARO. See asset retirement identifiable net assets, 12-4 bargain purchase option, 20-9–20-10, allowance for loans receivable, 7-20 obligation (ARO) impairment, 3-7 20-13, 20-46 allowance method, 7-16–7-18, 8-33 articles, 1-18 intangible assets. See intangible bargain renewal option, 20-13–20-14 amortization, 10-5, 11-4, C-11 artificial time periods, 2-25 assets barter transactions, 2-26–2-27, 6-6 see also depreciation artistic-related intangible assets, knowledge assets, 12-34 basic elements, 2-12 accelerated amortization, 11-10 12-18 liquidation approach, 2-26 basic EPS, 17-3, 17-5–17-11, 17-23 accumulated amortization, 12-15 ASPE. See Accounting Standards for long-lived assets, 11-27–11-28 capital structure, 17-5–17-6 expenses, 12-15 Private Enterprises (ASPE) monetary assets, 5-7–5-8, comprehensive illustration, finite or limited life, 12-14 asset account, C-3 10-14, 12-5 17-10–17-11 intangible assets, 11-5, 12-14 asset adjustment method, 12-13 net assets, 5-8 income available to common/ lease amortization schedule, asset-backed financing, 7-31 nonmonetary assets, 5-7–5-8, ordinary shareholders, 20-22, 20-41–20-42, 20-45 asset-backed securities, 7-32 10-14, 12-5 17-6–17-7 prepaid expenses, C-11 asset-based financing, 20-4 other assets, 5-17–5-18 weighted average common/ amortization approach, 19-17 asset ceiling test, 19-25 pension plan assets, 19-14–19-16 ordinary shares, 17-8–17-10 amortized cost, 7-23, 13-6 asset class, 11-39–11-41 plant assets, 10-4 basic or inherent rights, 15-5 amortized cost model, 9-9–9-15, asset exchanges, 10-14–10-18 property, plant, and equipment. basic terminology, C-2–C-4 9-47 asset groups, 11-25–11-27 See property, plant, and basket purchase, 8-19, 12-7 debt instruments of other entities, asset-liability approach, 6-10–6-13, equipment bearer bonds, 14-4 9-11–9-15 6-47–6-48, 10-33 qualifying assets, 10-37 beginning inventory, C-22 income under, 9-11–9-14 allocation of transaction price recognized from costs incurred to beneficial interests, 7-36 sale of investments, 9-14–9-15 to separate performance fulfill a contract, 6-44 benefits, 2-12 analysis obligations, 6-28–6-31 right, vs. physical asset, 2-12–2-13 benefits of ownership, 6-36 accounting changes, 21-24–21-26 determination of transaction right-of-use asset, 20-15–20-17 best efforts underwriting, 14-3 accounting policies, 4-35 price, 6-21–6-28 securitization, 14-27 best estimate method, 13-36 cash flow statement, 4-36 example, 6-11–6-12 selling price of asset, 20-43 best-quality fair value measure, 3-12 BMIndexes.indd Page 6 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-6 Subject Index
bias C capital markets, 1-10, 14-30, cash flow uncertainty, 16-45 in financial reporting, 1-11, 4-8, call option, 16-11–16-14, 17-15 15-3, 16-4 cash flows, 22-4 6-10 call provisions, 14-3 capital shares, 5-20 see also statement of cash flows management bias, 1-11, 1-20–1-21 callable bonds and notes, capital structure, 17-5–17-6, cash flow patterns, 5-35–5-36 motivation to bias information, 1-11 14-4, 14-12 17-12, 21-25 classification of, 22-5–22-8 revenue numbers, biased, 6-10 callable debt, 13-12 capitalization of costs, 10-6–10-7, discounting future cash bifurcation, 13-27 callable/redeemable shares, 15-7 10-37–10-42 flows, 3-16 “big bath” writedown, 12-35 Canada Business Corporations Act capitalization period, 10-38 estimates, 3-5 Big Data, 3-1 (CBCA), 15-4 capitalization rate, 10-39 from financing activities. See bill-and-hold arrangement, 6-7, 6-42 dividend distribution, 15-8 capitalized, 10-5 financing activities binomial tree options pricing repurchased shares, 15-14 capitalized leases, 20-7–20-8 free cash flow, 5-36–5-37, model, 16-54 stock dividends, 15-17 captive leasing companies, 20-36 22-38–22-39 biological assets, 6-48, 8-37–8-40, Canada Pension Plan (CPP), 13-18 carrying amount, 9-18, 9-40, 23-19, future cash flows, 22-4 8-52, 10-22, 10-27 Canadian Accounting Standards C-12 importance, 22-3–22-5 Bitcoin, 15-1, 16-1 Board (AcSB). See Accounting carrying value, 14-12 interest cash flows, 7-27 Black-Scholes options pricing Standards Board (AcSB) cash, 5-11–5-12, 5-34, 7-6–7-7, from investing activities. See model, 16-54 Canadian Auditing Standard 250 22-4–22-5 investing activities blockchain, 15-1 (CAS 250), 23-7 bank overdrafts, 7-7–7-8, 7-9 and life-cycle development bona fide, 6-6 Canadian Auditing Standards, changes in cash, 22-14 stages, 22-8 bond indenture, 14-3 23-26–23-27 classification, 7-9 normalized cash flow, 17-5 bond ratings, 14-5–14-7 Canadian dollar, 7-7 compensating balances, 7-9 from operating activities. See bonds, 5-18 Canadian Institute of Chartered control of, 7-4 operating activities see also specific types of bonds Accountants (CICA), 1-13 see also cash controls predictions of future cash flows, bond interest expense, 14-12 Canadian Intellectual Property definition, 22-4–22-5 18-42–18-43 bond ratings, 14-5–14-7 Office (CIPO), 12-18 as financial asset, 5-8 prospects, 1-8 bonds payable, 22-19, 22-46 Canadian Public Accountability in foreign currencies, 7-7 purpose, 22-3–22-5 characteristics, 14-3–14-4 Board (CPAB), 1-20 IFRS-ASPE comparison, 7-41 sustainable cash flow, 17-5 discount, 14-9–14-10, 14-11, Canadian Securities Administrators, management, 2-5, 7-4 uses, 22-3–22-5 14-13–14-14 1-20, 5-1 see also cash controls cash-generating unit (CGU), effective interest method, Canadian Securities Exchange measurement, 7-6–7-9 11-25–11-27, 12-27–12-28 14-12–14-15 (CSE), 1-1, 1-2 net cash provided by operating cash gushers, 22-1 interest rates, 14-9 cannabis industry, 1-1 activities, 5-32 cash inflows, 5-27 issued at par, 14-8–14-9 capital and operations, 4-7 cash outflows, 5-27 measurement, 14-8–14-19 allocation of, 1-4–1-5 recognition, 7-6–7-9 cash payments premium, 14-9–14-10, 14-14–14-15 disclosures, 15-25–15-26 and recurring obligations, 7-7 ending prepaid expenses, 4-42 straight-line method, 14-11–14-12 and financial reporting, 1-1–1-2 reporting cash, 7-7–7-9 expenses, conversion to accrual types of bonds, 14-4–14-5 sources of capital, 1-4–1-5 restricted cash, 7-7 basis, 4-42–4-43 bonus, 13-22, 21-25 Capital account, C-20, C-21 summary of cash-related revenue, conversion to accrual bonuses, 1-20 capital allocation, 1-4–1-5 items, 7-9 basis, 4-41–4-42 book value, C-12 capital allocation process, 1-4–1-5 cash and cash equivalents, cash price equivalent, 10-11 book value method, 16-27–16-28 capital approach, 10-18 5-11–5-12 cash-settled plans, 16-38 book value per share, 5-41, capital asset, 18-11 see also cash; cash equivalents cashier’s cheques, 7-6 15-28–15-29, 23-32 capital cost allowance (CCA), cash basis accounting catastrophe bonds (“cat” bonds), boot, 10-15 11-37, 18-7 conversion to accrual basis, 14-5 borrowing. See debt; long-term debt capital cost allowance method, 4-41–4-43 catch-up adjustment, 21-9 borrowing costs, 8-19, 10-8–10-9, 11-37–11-41 modified cash basis, 4-41 cause and effect relationship, 2-22 10-37–10-42 additions to an asset class, strict cash basis, 4-39 CBCA. See Canada Business brand, 12-16 11-39–11-40 theoretical weaknesses of, 4-44 Corporations Act (CBCA) brand name, 12-16 basic CCA and UCC example, vs. accrual basis accounting, CCA rate, 11-37 bright-line tests, 1-23 11-38–11-39 4-39–4-41 CCAA. See Companies’ Creditors brokerage commissions, 9-8 half-year rule, 11-38 warranty costs, 13-29 Arrangement Act (CCAA) budgets, 2-33 recapture, 11-40 cash controls, 7-42–7-47 centrally incurred costs, 23-12 buildings, 10-20, 22-18–22-19, retirements from asset class, bank accounts, 7-42–7-43 certificates of deposit, 7-6 22-28, 22-45–22-46 continuation of class, 11-40 imprest petty cash system, certified cheques, 7-6 bundled sales, 6-4–6-5, 13-29 retirements from asset class, 7-43–7-44 challenges for accounting burden, 10-7 elimination of class, internal control, 7-42 profession, 1-19–1-25 business combination, 12-7 11-40–11-41 physical protection of cash change funds, 7-6 business environment, 2-33 terminal loss, 11-40–11-41 balances, 7-44 change in accounting estimate, business models, 4-3–4-7, 4-20, 5-39 undepreciated capital cost (UCC), reconciliation of bank balances, 6-53, 21-4, 21-7 business organization, primary 11-38, 11-39 7-45–7-47 disclosure, 21-22–21-23 forms of, 15-3 capital expenditure, 10-29 cash cost, 10-10 illustration, 21-23 business perspective, 6-4 capital gain, 11-40 cash crunch, 5-35 normal recurring corrections and depreciation, 11-3–11-4 capital-intensive, 5-16 cash debt coverage ratio, 5-35, adjustments, 21-21 disposition, 11-3–11-4 capital-intensive industries, 5-41, 23-32 prospective application, impairment, 11-3–11-4 14-1, 14-8 cash discounts, 6-24, 7-12, 10-10 21-21–21-24 property, plant, and equipment, capital lease method, 20-20–20-23 cash dividends, 15-16–15-17 change in accounting policy, 10-4 capital leases, 20-8, 20-18, 20-31–20-32, see also dividends 21-3–21-7, 21-26 sales transaction, 6-4 20-34, 20-37–20-38 cash equivalents, 7-8–7-9, 22-4–22-5 choices of accounting policies, statement of cash flows, 5-3–5-4 capital maintenance, 11-28 cash flow hedge, 16-42, 16-44–16-50 21-4–21-5 statement of financial position capital market risks, 5-40 cash flow management, 13-4 disclosure, 21-14 (balance sheet), 5-3–5-4 capital marketplace cash flow per share, 5-38 GAAP requirements, 21-5–21-7 business risks, 5-39–5-40 oversight in, 1-19–1-20 cash flow statement, 1-3, 4-36 “reliable and more relevant” buyback agreements, 8-9 signals to, 2-29 see also statement of cash flows test, 21-5 BMIndexes.indd Page 7 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-7
retrospective application, completeness, 2-8 consigned goods, 8-9 at time of conversion, 16-27–16-28 21-10–21-21 complex capital structure, consignee, 6-40 at time of issuance, 16-26–16-27 voluntary changes in policy, 21-5 17-6, 17-12 consignments, 6-40–6-41, 6-42 convertible securities, 17-12–17-15 changes in accounting principle, 4-33 complex financial instruments consignor, 6-40 convertible shares, 15-7 Chartered Professional Accountants convertible debt, 16-25–16-29 consistency, 2-11, 2-32, 4-33, 21-3 copyright, 12-18 Canada (CPA Canada), 1-13, debt vs. equity, issuer perspective, consolidation, 2-20, 9-39 Copyright Office, 12-18 2-19, 2-30, 8-45, 8-50, 10-4 16-20–16-29 constructive obligations, 2-14, corporate capital. See shareholders’ checks and balances, 1-6 derivatives. See derivatives 6-9–6-10, 13-5, 13-23 equity cheques economics of, 16-20–16-21 consumers, as derivative users, corporate law, and share capital not-sufficient-funds (NSF) hybrid/compound instruments, 16-7–16-8 system, 15-4–15-5 cheques, 7-45 16-21, 16-22–16-25 contests, 13-31 corporate scandals, 1-19 outstanding cheques, 7-45 IFRS-ASPE comparison, contingencies, 5-19, 5-22–5-23, corporate strategy, 9-5 postdated cheques, 7-6, 7-9 16-36–16-38 13-34–13-38, 13-41–13-42, 13-46 corporate tax rate, ideal, 18-1 chief operating decision-maker, share-based compensation, contingent assets, 13-4, 13-35 corporation, 2-19, 15-3 23-10 16-29–16-36 contingent gains, 5-23, 13-47 classification of, 15-3–15-4 classification approach, 20-7, 20-13 component of an enterprise, contingent liability, 13-4, 13-35 corporate law, and share capital classified statement of financial 4-14–4-15 contingent loss, 13-35–13-36 system, 15-4–15-5 position (balance sheet), componentization, 10-6, 11-5 contingently issuable shares, 17-6, equity section accounts, C-20 5-9–5-10, 5-10–5-22 compound instruments. See hybrid/ 17-10, 17-19 formality of profit distribution, see also statement of financial compound instruments contra account, 5-26, 7-12 15-8–15-10 position (balance sheet) compound interest, 3-15–3-16 contra asset account, C-12 head offices, 18-1 clearing account, C-21 comprehensive income, 2-16, contra items, 5-25–5-26 limited liability of shareholders, closing entries, C-3, C-21–C-22 4-12, 4-38 contract, 6-13 15-7–15-8 closing process, C-20–C-23 comprehensive revaluation, basic accounting, 6-14–6-15 not-for-profit corporations, 15-3 inventory and cost of goods 15-33–15-34 consideration. See consideration private sector corporation, sold, C-22 computer software costs, 12-21 contract modification, 6-15–6-16 15-3–15-4 post-closing trial balance, C-22 conceptual framework, 1-18, 1-19, contractual rights, 2-12–2-13 public sector corporations, 15-3 preparation of closing entries, 2-3, 4-14 costs to obtain and/or fulfill a separate legal entity, 15-3 C-21–C-22 assets, 2-12–2-13 contract, 6-44–6-45 shareholders’ equity account, C-21 code of ethics, 1-20 current values, 2-24 criteria for revenue guidance, 6-14 shares. See shares codification project, 1-23 definitions, 13-6 with customers, 6-46 correction of a prior period error, collateral trust bonds or notes, 14-4 development of, 2-3–2-5 executory contract, 8-10 21-4, 21-7–21-8 collectibility, 6-14, 6-38 elements of financial statements, financing component, 6-26 cost-based measures, 3-3, 13-6 collection float, 7-42 2-4, 2-12–2-16 long-term contracts, 6-49–6-54 cost-benefit constraint, 21-10, 23-5 collections received in advance, 5-18 expanded conceptual framework, new and separate contract, cost-benefit relationship, 2-11 combination plans, 16-53 2-31 6-15–6-16 cost formulas, 5-13, 8-23–8-30 combined statement of income/ Exposure Drafts (EDs), 2-34, 4-39 non-cancellable purchase choice of, 8-6, 8-29 comprehensive income, foundational principles, 2-16–2-31 contracts, 8-10 first-in, first-out (FIFO) cost 4-22–4-24 historical costs, 2-24 onerous contract, 8-10 formula, 8-27–8-29, 8-50 commercial paper, 7-8, 13-41 objective of financial reporting, performance, need for, 6-14 last-in, first-out (LIFO) cost commercial substance, 6-6, 2-4, 2-5 profitable contracts, 6-57–6-58 formula, 2-10, 8-29–8-30 10-14–10-15, 10-16, 12-7, 23-19 overview of, 2-4 unprofitable contract, 6-58–6-59 moving-average cost formula, 8-26 commissions, 6-41 prudence, 2-1 contract assets, 6-42–6-44 specific identification, 8-24–8-25 commitments, 13-40, 13-41–13-42 qualitative characteristics, contract-based approach, 20-7, weighted average cost, 8-26–8-27 commodity-backed debt, 14-4 2-6–2-12, 4-8 20-15–20-18 cost management, 16-4 commodity broker-traders, 8-52 rationale for, 2-3 see also asset-liability approach cost model, 9-9–9-15, 9-47, 10-23, common costs, 23-9 universally accepted conceptual contract-based intangible assets, 11-20, 12-13 common shares, 15-5–15-6, 15-22, framework, 2-3 12-18–12-19 cost of goods available for sale or 15-31, 22-14, 22-20, 22-30, “Conceptual Framework for contract law, 6-9 use, 8-6 22-46–22-47 Financial Accounting and contract liability, 6-43 cost of goods manufactured, Common Shares account, C-20 Reporting: Elements of contract modification, 6-15–6-16 8-12–8-13 common-size analysis, 23-34 Financial Statements and Their contractual commitments, 13-40 cost of goods sold, 8-6 communication of information Measurement” (FASB), 2-4 contractual obligations, 13-40 cost recovery impairment model, about performance, 4-7 concessionary terms, 6-7–6-8 contractual obligations to pay, 5-8 11-21–11-22, 11-24–11-25, Companies’ Creditors Arrangement condensed financial statements, contractual right to use, 20-8–20-9 12-21–12-22 Act (CCAA), 15-32, 23-26 4-27–4-28 contractual rights to receive cost reduction method, 10-19 comparability, 2-10, 2-32, 21-3 conditional right to receive cash, 5-8 cost-to-cost basis, 6-34, 6-51 comparative financial statements, consideration, 6-43 contractual situations, 5-23–5-24 cost-to-retail ratio, 8-47 21-36–21-38 confirmatory value, 2-6 contractual yield basis, 7-23 costs, 10-6 comparatives, 23-15 see also feedback contributed assets, 10-18–10-19 acquisition cost, 2-26, 10-21 compensated absences, 13-19–13-21 conservatism, 2-1, 2-27 contributed (paid-in) capital, 15-23 amortized cost, 13-6 accumulated rights, 13-19–13-21 conservative accounting, 1-11 contributed surplus, 5-20, 15-14–15-15, asset retirement costs, 8-18, 10-9 non-accumulating compensated consideration, 6-5, 6-15 15-22, 15-31 bankruptcy costs, 23-26 absences, 13-21 conditional right to receive Contributed Surplus account, C-20 borrowing costs, 8-19, 10-8–10-9, compensating balances, 7-7, 7-9 consideration, 6-43 contributory plans, 19-6 10-37–10-42 compensation expense, 16-33–16-35 noncash consideration, 6-27 control, 2-12, 2-18–2-21, 6-12, 6-32, capitalization of, 6-45, 10-6–10-7 compensation plans. See share- paid or payable to customers, 6-36, 9-38 cash cost, 10-10 based compensation 6-27–6-28 control of cash. See cash controls centrally incurred costs, 23-12 compensatory stock option plans present value of, 10-11 conversion costs, 8-18 change in estimated costs, 6-53 (CSOPs), 16-30–16-32, unconditional right to receive conversion of shares, 15-13–15-15 common costs, 23-9 16-32–16-35 consideration, 6-42 convertible bond, 16-25–16-26 computer software costs, 12-21 completed-contract method, 6-48, variable consideration, convertible debt, 14-4, 16-25–16-29 conversion costs, 8-18 6-56, 18-6 6-21–6-25, 6-48 retirement of, 16-29 current costs, 2-24 BMIndexes.indd Page 8 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-8 Subject Index
costs (continued) CPA Canada Handbook— customer advances, 13-14 deferred income tax liabilities, 5-19 current service cost, 19-7, Assurance, 23-17, 23-27 customer loyalty programs, deferred payment terms, 10-11–10-12 19-11–19-12, 19-36–19-37 credible financial statements, 2-9 13-30–13-31 deferred tax asset account, deferred development costs, credit, C-3 customer program obligations, 18-33–18-35 22-27, 22-45 credit facilities, 13-8–13-9 13-30–13-33 deferred tax assets, 18-10, of defined benefit plan, 19-16–19-17 credit policy, 6-7 see also warranties 18-15–18-19, 18-36–18-37, demolition cost, 10-20 credit rating agencies, 1-5 customer-related intangible assets, 18-43, 18-47–18-48, 18-52 derivatives, 16-4 credit ratings, 14-5–14-7 12-17–12-18 deferred tax expense, 18-10, 18-14, development phase costs, credit risk, 6-6, 7-1, 7-14, 7-23, 16-6, cut-off schedule, 8-9 18-47–18-48, 18-52 12-10–12-11 16-7, 16-14–16-15 deferred tax liabilities, 18-10, direct costs, 16-4 crediting the account, C-3 D 18-13–18-15, 18-47–18-48, directly attributable costs, creditors, 1-6, 5-34, 23-26 data analytics, 3-1, 7-17, 8-5, 11-9, 18-52, 22-29–22-30, 22-46 10-7–10-8 creditworthiness, 5-4 12-4, 13-27 deficit, 5-20, 19-15–19-16 dismantling costs, 10-9–10-10 critical event, 6-36 days payable outstanding, 13-43 defined benefit obligation (DBO), disposal costs, 11-23 cross-references, 5-25–5-26 debenture bonds, 14-4 19-10, 19-35, 19-37–19-38 excluded from inventory, 8-19 crowdfunding, 15-1 debit, 13-12, C-3 defined benefit obligation (DBO) for executory costs, 20-14 cryptocurrencies, 15-1, 16-1 debit/credit rules and effects, C-4 accounting purposes, 19-11, flow of costs, 8-12–8-13 CSOPs. See compensatory stock debiting the account, C-3 19-18 freight costs, 8-50 option plans (CSOPs) debt defined benefit obligation (DBO) general and administrative cumulative shares, 15-6–15-7 asset-linked debt, 14-4 for funding purposes, 19-11, costs, 6-44 currency risk, 16-6, 16-7, 16-14, bank indebtedness, 13-8–13-9, 13-41 19-18 historical cost principle, 2-24, 16-40, 16-41 callable debt, 13-12 defined benefit plan, 19-8–19-9, 2-26–2-27, 23-26, 23-35, C-11 current assets, 5-10–5-15, 11-20 commodity-backed debt, 14-4 19-9–19-13 historical costs, 10-23 cash, 5-11–5-12 convertible debt, 14-4, 16-25–16-29 accounting for, 19-9–19-13 IAS 16 definition, 10-11 inventories, 5-13–5-14 debt covenants, 5-19 actual return on plan assets, 19-15 incremental costs, 6-44 prepaid expenses, 5-15 with detachable warrants, 16-28 actuarial gains and losses, 19-13, indirect costs, 16-4 receivables, 5-12–5-13 due on demand, 13-11 19-17, 19-22–19-25, 19-35 initial direct costs, 20-48 short-term investments, 5-12 extinguishment of debt, 14-20 actuarial present value of benefits, inventory costs. See inventory costs current cash debt coverage ratio, long-term debt, 5-18–5-20 19-11n of issuing shares, 15-13 5-5, 5-35, 5-41, 23-31 see also long-term debt alternative measures of pension joint cost, 8-19–8-20 current cost, 2-24 plain vanilla debt, 16-21 obligation, 19-10–19-11 kinds of costs, 2-11 current liabilities, 5-18, 13-7–13-8 secured debt, 14-4 analysis, 19-34 laid-down costs, 2-26 accounts payable, 13-9 short-term obligations expected to benefits paid, 19-15 of leased asset being sold, 20-43 analysis, 13-42–13-45 be refinanced, 13-12–13-13 benefits paid to retirees, 19-12 to obtain and/or fulfill a contract, on balance sheet, 13-41 troubled debt restructuring, 14-21 changes in defined benefit 6-44–6-45, 6-46 bank indebtedness, 13-8–13-9 unsecured debt, 14-4 obligation, 19-11–19-13 opportunity costs, 16-4 common current liabilities, vs. equity, issuer perspective, contributions, 19-14–19-15 organization costs, 12-11 13-7–13-17 16-20–16-29 cost of, 19-16–19-17 past service costs, 19-8, 19-13, credit facilities, 13-8–13-9 debt instruments, 9-4, 9-11–9-15 current service cost, 19-11–19-12, 19-17, 19-21–19-22, 19-35, current maturities of long-term debt market, 1-4 19-36–19-37 19-38–19-39 debt, 13-11 debt ratings, 14-5–14-7 curtailments, 19-17 period costs, 2-22, 8-19 customer advances, 13-14 debt securities, 9-4 defined benefit cost components, political costs, 21-25 definition of, 13-8 debt settlement, 14-21–14-24 19-16–19-17 product costs, 2-22, 8-18–8-20 deposits, 13-14 debt to equity ratios, 5-9 defined benefit obligation (DBO), property, plant, and equipment, disclosure, 13-40–13-41 debt to total assets, 5-41 19-10, 19-35, 19-37–19-38 10-6–10-10 dividend payable, 13-13 debt to total assets ratio, 14-31, 23-32 defined benefit obligation (DBO) rearrangement and reinstallation interest-bearing note issued, 13-10 decision usefulness, 2-6 for accounting purposes, 19-11 costs, 10-29, 10-33 notes payable, 13-9–13-11 decision-usefulness approach, 1-7 defined benefit obligation (DBO) replacement cost, 8-30–8-31 presentation, 13-40–13-41 declining-balance method, 11-10 for funding purposes, 19-11 research phase costs, 12-10 rents payable, 13-13–13-14 decommissioning obligations, disclosure, 19-28–19-34 restoration costs, 10-9–10-10 royalties payable, 13-13–13-14 13-22–13-26, 13-46 discount rate, 19-35 of service providers’ work in short-term obligations expected to decreasing charge methods, 11-10 employer’s obligation, 19-10–19-13 progress, 8-19 be refinanced, 13-12–13-13 deductible temporary difference, interest cost, 19-12 that expire with passage of time, C-9 taxes payable, 13-14–13-17 18-12, 18-15–18-16 limit on carrying amount of net transaction costs, 7-23, 9-8 trade accounts payable, 13-9 deep discount bonds or notes, 14-4 defined benefit asset, 19-25 warranty costs, 18-17–18-18 trade notes payable, 13-9 defaulted subscription accounts, measurement, 19-35 counterbalancing errors, understanding, 13-3–13-4 15-12 other defined benefit plans, 21-30–21-32 vs. long-term debt, 14-28 defeasance, 14-7, 14-26 19-26–19-27 counterparty, 16-7 zero-interest-bearing note issued, deferral method, 10-19, 19-17 overfunded, 19-15 coupon bonds, 14-4 13-10–13-11 deferred development costs, 22-27, past service costs, 19-13, 19-17, coupon rate, 7-23, 14-9 current market rate, 19-12 22-45 19-21–19-22, 19-35, 19-38–19-39 coupons, 6-27, 13-31 current maturities of long-term deferred/future income taxes, plan assets, 19-10, 19-14–19-16 covenants, 5-19, 14-31 debt, 13-11 18-10–18-19 present value of benefits, 19-11, coverage ratios, 5-5, 5-40, 5-41, current operating performance deferred tax asset account, 19-11n 23-31, 23-32 approach, 4-12 18-33–18-35 presentation, 19-28 CPA Canada. See Chartered current ratio, 5-5, 5-9, 5-41, 8-14, deferred tax assets, 18-15–18-19, projected benefit method prorated Professional Accountants 8-15, 13-42–13-43, 23-31 18-36–18-37, 18-43, 18-47–18-48, on services, 19-12n Canada (CPA Canada) current service cost, 19-7, 18-52 recognition, 19-35 CPA Canada Handbook, 1-13, 1-18, 19-11–19-12, 19-17 deferred tax expense, 18-47–18-48 return on plan assets, 19-14, 19-15 8-7, 10-5, 12-9, 18-11, 19-6, current tax expense, 18-11, 18-47, deferred tax liabilities, 18-13–18-15, settlements, 19-17 19-17, 21-26–21-27 18-51–18-52 18-47–18-48, 18-52 surplus or deficit, 19-14–19-16 see also Accounting Standards for current values, 2-24 discounting and, 18-24 underfunded, 19-15 Private Enterprises (ASPE) customer acceptance conditions, 6-7 deferred income tax assets, 5-18 defined benefit trust, 19-8 BMIndexes.indd Page 9 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-9
defined contribution plan, 19-7–19-8, costs, 16-4 cross-references, 5-25–5-26 selective disclosure, 23-4 19-35 definition, 16-3–16-4 current liabilities, 13-40–13-41 share-based compensation, defined contribution trust, 19-8 embedded derivatives, 16-4 of date financial statement 16-35–16-36 deflation, 2-25 executory contracts, 16-8–16-10 authorized for issue, 5-38 short-term leases, 20-34 delayed payment terms, 7-10, 12-6 financial risks, 16-6 defined benefit plan, 19-28–19-34 significant judgements, 6-46 demolition cost, 10-20 fixed for fixed override, 16-19 disaggregation of revenue, 6-46 statement of cash flows, depletion, 10-5, 11-5, 11-13 forwards, 16-4, 16-10, 16-14–16-16, disclosure problem, 2-34–2-35 22-32–22-33, 22-39 estimate of recoverable reserves, 16-18 discontinued operations, per supporting schedule, 5-26 11-14–11-15 futures, 16-4, 16-10, 16-16–16-18 share amount for, 17-11 taxes payable method, 18-39 liquidating dividend, 11-15 for hedging, 16-39–16-40 earnings per share (EPS), 17-3–17-5, techniques, 5-24–5-26 pattern of depletion, 11-13–11-14 involving entity’s own shares, 17-21–17-22 untimely disclosure, 23-4 depletion base, 10-22 16-18–16-20 equity, 15-30 discontinued operations, 4-14–4-20 depletion expense, 11-13 markets, 16-3 error correction, 21-20 assets held for sale, 4-15–4-16 depositor errors, 7-45 non-financial derivatives, estimates, use of, 5-23 component of an enterprise, deposits, 13-14 16-8–16-10 fair value information, 16-55–16-58 4-14–4-15 deposits in transit, 7-45 options, 16-4, 16-10–16-14, 16-18 financial guarantees, 13-41–13-42 disclosure of per share amount, depreciable amount, 11-6 producers, as derivative users, financial reorganization, 15-34 17-11 depreciation, 3-3, 10-5, 11-4, C-11 16-7–16-8 full disclosure principle, 2-29–2-31, measurement, 4-16–4-20 see also amortization risk management, 16-4–16-8 4-21, 5-19, 6-9, 14-4, 23-4–23-5 presentation, 4-16–4-20 activity methods, 11-11–11-12 settlement options, 16-19 future income tax method, separate component, 4-14 allocation methods, 11-7–11-12 speculators, as derivative users, 18-40–18-41 discount, 6-27, 6-31, 7-28, 14-10 asset components, 11-5 16-8 goodwill, 12-30–12-33 bonds and notes, 14-9–14-14 assets held for sale, 11-27 the underlying, 16-3, 16-10 greater disclosures, 1-20 cash discounts, 6-24, 7-12, 10-10 business perspective, 11-3–11-4 warrants, 16-10–16-14 guarantees, 13-39–13-40 employee discounts, 8-50 calculation, 11-7–11-12 deterioration due to elements, C-11 IASB research project, 2-34–2-35 prompt settlement discounts, 6-24 declining-balance method, 11-10 development, 12-10 IFRS-ASPE comparison, purchase discounts, 8-50 depreciable amount, 11-6 development phase, 12-9–12-11 23-35–23-36 sales discounts, 7-12, 8-50 depreciation period, 11-7 differentiation strategy, 4-7 IFRS Practice Statement, 23-4–23-5 trade discounts, 7-12 diminishing balance methods, digital economy, 6-1 illegal acts, 23-7 volume discounts, 6-23–6-24 11-10–11-11 diluted EPS, 17-3, 17-12–17-27, importance of, from business volume rebates, 8-17–8-18 double-declining-balance method, 17-23–17-24 perspective, 23-3–23-4 discount period, 12-41 11-11, 11-19 antidilutive securities, 17-12, income taxes, 18-39–18-41, 18-44 discount rate, 3-6, 6-48, 12-40, 20-14 estimate, 11-5 17-20–17-21 increase in disclosure discounted cash flow model, 3-6 factors considered in depreciation complex capital structure, 17-12 requirements, 23-6 discounted free cash flow method, process, 11-5–11-7 contingently issuable shares, increased disclosure under 12-42 IFRS-ASPE comparison, 17-19 IFRS, 2-30 discounting, 18-43 11-35–11-36 convertible securities, 17-12–17-15 insider trading, 23-4 discounting future cash and income tax, 11-37–11-41 options, 17-15–17-19 intangible assets, 12-30–12-33 flows, 3-16 leases, 20-19–20-20 reverse treasury stock method, interim reporting, 23-13–23-18, discrete earnings process, 6-36 as means of cost allocation, 11-4 17-18–17-19 23-36 discrete view, 23-14 partial periods, 11-16–11-17 treasury stock method, 17-17–17-18 inventories, 8-43–8-44 discussion papers (DPs), 1-16 prepaid expenses, C-11 warrants, 17-15–17-19 investments, 9-39–9-43 dismantling costs, 10-9–10-10 and replacement of assets, diminishing balance methods, key disclosure documents for disposal costs, 11-23 11-32–11-33 11-10–11-11 public companies, 23-3–23-4 disposition, 4-14 residual value, 11-6 direct awards of stock, 16-30, 16-35 leases, 20-34–20-35, 20-48–20-49, see also sale of retirement cost, 13-25 direct costs, 16-4 20-50 business perspective, 11-3–11-4 revalued amount, 10-24, 10-42 direct financing lease, 20-38 liabilities, 13-48 derecognition, 11-28–11-30 revision of depreciation rates, direct method, 5-33, 8-33, 22-9, long-term debt, 14-28–14-30 donations of capital assets, 11-29 11-18–11-19 22-10, 22-12–22-15, 22-17, low-value leases, 20-34 held for sale, 11-27–11-28, 11-29 salvage value, 11-6 22-21–22-32, 22-47 Management Discussion and IFRS-ASPE comparison, straight-line method, 11-9–11-10 direct write off method, 7-20 Analysis (MD&A), 2-30 11-35–11-36 sum-of-the-years’-digits method, directly attributable costs, 10-7–10-8 measurement, 3-9 involuntary conversion, 11-29 11-10 disclosure measurement uncertainty, 21-23 long-lived assets to be disposed of tax purposes, 11-12 accounting changes, 21-14, misleading disclosure, 23-4 by sale, 11-27–11-28 units of production method, 11-11 21-20–21-21, 21-22–21-23, 21-27 note disclosures, 1-4, 14-28 other issues, 11-30 derecognition, 2-18 accounting errors, 23-7 notes to financial statements, sale of property, plant, and see also recognition accounting methods, 4-8 4-36, 5-25, 23-6 equipment, 11-28–11-29 disposition, 11-28–11-30 accounting policies, 23-6–23-7, operations income, 4-26 dividend payable, 13-13 IFRS-ASPE comparison, 7-41 23-35 parenthetical explanations, dividends, 11-15, 15-6, 15-8, intangible assets, 12-24 assets recognized from costs 5-24–5-25 15-16–15-21 long-term debt, 14-20–14-27 incurred to fulfill a contract, pension plan, 19-28–19-34, 19-35 cash dividends, 15-16–15-17 receivables, 7-30–7-37 6-46 property, plant, and equipment, consistent treatment, 16-29 derivative instruments, 16-3 borrowing costs, 10-42 11-30–11-32 date of declaration, 15-16 see also derivatives capital disclosures, 15-25–15-26 receivables, 7-37–7-39 date of payment, 15-16 derivatives, 3-5, 5-18, 16-3–16-20 change in accounting estimate, reconciliation of contract date of record, 15-16 accounting for derivatives, 21-22–21-23 balances, 6-46 dividend preferences, 15-19–15-20 16-8–16-20 change in accounting policy, remaining performance dividends in kind, 15-17 arbitrageurs, as derivative 21-14 obligations, 6-46 financial conditions, and dividend users, 16-8 commitments, 13-39–13-40, restatement of, 1-20 distribution, 15-8–15-10 Bank of Canada report, 16-5–16-6 13-41–13-42 revenue recognition, 6-45–6-46 large stock dividend, 15-21 characteristics, 16-4 contingencies, 13-41–13-42 sale of receivables, 7-36–7-37 legality of dividend distribution, consumers, as derivative users, contra items, 5-25–5-26 segmented reporting, 23-7–23-13, 15-8 16-7–16-8 contract with customers, 6-46 23-35 and liability, 13-13 BMIndexes.indd Page 10 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-10 Subject Index
dividends (continued) economic environment, 2-33 error earnings quality, 5-4 liquidating dividends, 15-16, economic factors, 11-7 bank or depositor errors, 7-45 economic or business 15-18–15-19 economic life test, 20-13–20-14 freedom from material error, 2-9 environment, 2-33 non-payment of dividends, 15-10 economic obligation, 13-5 inventory errors, 8-14–8-16 ethical dilemmas, 1-20–1-21 preferred dividends in arrears, 13-13 economic resources, 2-15, 5-8 error correction, 21-27 ethical sensitivity, 1-21 property dividend, 15-17 economic substance, 2-8 accounting methods, 21-24 fair values, ability to measure, 10-15 reduction of shareholders’ equity, economic theory, 1-10 correcting entries, 21-33–21-34 financial engineering, 2-32 15-16 economics of sales transactions, correction of a prior period error, fraudulent financial accounting, stock dividend, 15-17–15-18, 6-4–6-8 21-4, 21-7–21-8 2-33 15-21, 17-8–17-10 effective (economic) hedge, 16-40 disclosure, 21-20–21-21 Livent Inc., 2-22 on term preferred shares, 22-29, effective interest method, 3-3, presentation on comparative principles-based GAAP, 2-32 22-46 7-25–7-26, 9-12, 9-13, financial statements, and professional judgement, Dividends account, C-20 14-12–14-15, 20-16, 20-20 21-36–21-38 5-23–5-24 dividends in kind, 15-17 effective interest rate, 7-23 retrospective restatement, revenue recognition, 6-10 dividends receivable, 7-10 effective tax rate, 18-23 21-14–21-21 European Financial Reporting Division I proposals, 23-26 effective yield, 14-10 errors Advisory Group, 1-21 donations of capital assets, 11-29 efficiency of asset use, 11-33–11-35 accounting errors, 23-7 event, C-3 double-declining-balance method, efficient markets hypothesis, 1-10 correction of. See error correction see also transaction 11-11, 11-19 efficient use of resources, 1-4 counterbalancing errors, event accrual method, 13-21 double-entry accounting, C-3 elements of financial statements, 21-30–21-32 excess-earnings approach, double-entry bookkeeping, C-3 2-4, 2-12–2-16, C-5 error analysis, 21-27–21-38 12-37–12-41 due date, 14-3 assets, 2-12–2-13 in income statement, 21-29–21-34 exchange of debt instruments, 14-21 due on demand, 13-11 basic elements, 2-12 income tax effects, 21-33–21-34 exchange price, 7-12, 10-11 due process, 1-14 equity, 2-15 non-counterbalancing errors, exchange rate risk, 16-39 expenses, 2-15 21-30, 21-32–21-33 exchange-traded options, 16-30 E fair value, measurement of, numerous errors, comprehensive executory contract, 8-10 earned capital, 15-23 3-9–3-13 illustration, 21-34–21-36 executory contracts, 13-40, earnings gains, 2-15 prior period errors, 21-4, 16-8–16-10, 20-7 all-inclusive approach, 4-12 liabilities, 2-13–2-15 21-7–21-8 executory costs, 20-14 announced earnings, 17-1 losses, 2-16 in statement of financial position, exercise period, 16-10 earnings process, 2-21 measurement of, 3-2–3-9 21-29–21-34 exercise price, 16-10, 17-15 higher-quality earnings, 4-9 present value–based accounting in statement of financial position existence uncertainty, 2-18, 2-23 non-GAAP earnings, 4-36 measurements, 3-5 and income statement, exit price, 2-27 normalized earnings, 12-38, 17-5 recognition, 2-17–2-22 21-29–21-34 expansion expenses, 5-16 presentation, 4-9 revenues, 2-15 estimated items, C-9 expected cash flow approach, 3-6 quality of, 4-7–4-12, 5-4, 18-42 valuation techniques, 3-3–3-7 adjusting entries, C-17–C-18 expected cost plus a margin, 6-29 retained earnings, 5-20 value in use measurements, bad debts, C-9, C-17–C-18 expected credit losses, 7-41 smoothing earnings, 21-25 3-7–3-8 unrealized holding gain or loss, expected loss impairment model, sustainability of, 4-9, 17-5 embedded derivatives, 16-4 C-18–C-19 9-27–9-31, 9-31 earnings approach, 6-11, 6-35–6-38, emerging fields, 1-1 estimates expected present value technique, 3-7 6-47–6-48 employee discounts, 8-50 accounting items requiring expected return, 19-15 earnings before interest, employee-related liabilities, estimates, 21-7 expected value, 6-21 taxes, depreciation, and 13-17–13-22 and accrual accounting, 4-8 expected value method, 13-36 amortization (EBITDA), 11-12 bonus, 13-22 cash flow estimates, 3-5 expenditures, major types of, earnings management, 4-10–4-11, payroll deductions, 13-17–13-19 change in. See change in 10-29–10-34 10-29 profit-sharing plan, 13-22 accounting estimate expense account, C-3 earnings multiple, 4-37–4-38 short-term compensated depreciation, 11-5 expense approach, 13-27, 13-30, earnings per share (EPS), 4-12, 4-14, absences, 13-19–13-21 disclosure of use of, 5-23 13-32–13-33 4-31–4-32, 5-41, 23-32 employee stock option or purchase for income measurement, 4-8 expenses, 2-15 additional disclosures, 17-21–17-22 plans (ESOPs), 16-30–16-32 inventories, 8-40–8-43 see also specific expenses analysis, 17-5 Employment Insurance (EI), 13-18 recoverable reserves, 11-14–11-15 accrued expenses, C-9, C-15–C-17 basic EPS, 17-3, 17-5–17-11, 17-23 enforceable promise, 6-9 significant estimates, and ratios, calculation of, 4-42–4-43 comprehensive exercise, enhancing qualitative 23-35 current tax expense, 18-47, 17-22–17-27 characteristics, 2-10–2-11 in statement of financial 18-51–18-52 diluted EPS, 17-3, 17-5, 17-12–17-27, entity concept, 2-18 position, 5-6 deductible for tax purposes, 17-23–17-24 entity perspective, 1-7 uncollectible trade accounts 18-7–18-8 disclosure, 17-3–17-5 entity-specific measure, 2-27, 3-7 receivable, 7-14–7-16 deferred income tax expense, 18-14 IFRS-ASPE comparison, environmental liabilities, 3-5, 11-1 for unperformed work, 6-56 deferred tax expense, 18-10, 17-27–17-28 E.O.M. (end of the month), 7-12 useful life, 11-7 18-47–18-48, 18-52 interim reporting, 23-15, 23-16 equipment, 10-21, 22-19, 22-28, variable consideration, 6-21–6-25 expansion expenses, 5-16 multiplier, 17-5 22-45 ethical dilemmas, 1-20–1-21 function, 4-28–4-30 objective of, 17-3 equitable obligations, 2-14–2-15 ethical sensitivity, 1-21 future income tax expense, 18-10, presentation, 17-3–17-5 equity, 2-15, 5-8, 14-28 ethics 18-14 earnings process, 6-36 see also shares accountant’s judgement, IFRS-ASPE comparison, 4-38–4-39 earnings surprise, 17-1 equity claims, 9-39 5-23–5-24 nature, 4-28–4-30 economic activity, 2-18–2-19 equity instruments, 5-7, 5-8, 9-4, biased information, 2-9, 6-10 non–tax-deductible expenses, 18-8 economic benefits, 2-13, 12-5 16-3, 16-22–16-23 centrality of ethics, 1-20–1-21 operating expenses, 5-16 economic conditions, 15-9 equity investments, 7-8 code of ethics, 1-20 prepaid expenses, 5-15, C-9, economic consequences argument, equity market, 1-4 correct amounts, determination C-10–C-13 2-9, 21-25 equity method, 9-33–9-37, 9-38 of, 8-16 presentation, 4-28–4-30 economic entity, 2-20, 9-39 equity securities, 9-18 cost deferrals, 2-22 in single-step income statements, economic entity assumption, equity vs. debt, issuer perspective, earnings management, 4-10, 4-24 2-18–2-21 16-20–16-29 10-29 supplementary schedules, 4-27 BMIndexes.indd Page 11 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-11
experience adjustment, 19-13 investments in shares of other well-reasoned and supported fixed assets, 10-4 experience gain or loss, 19-13 entities, 9-21–9-23 analysis, 2-33 see also property, plant, and expiration, 16-34 with recycling, 9-21 financial risks, 5-40, 9-41, 16-6 equipment exploration and evaluation assets, sale of FV-OCI investments (debt financial statement analysis flexibility, 2-32, 20-6 11-14 instruments), 9-25–9-26 common-size analysis, 23-34 FOB destination, 6-9, 8-8 Exposure Drafts (EDs), 1-16 sale of FV-OCI investments horizontal analysis, 23-32–23-33 FOB shipping point, 6-9, 8-8 conceptual framework, 2-34, (shares), 9-22–9-23 limitations, 23-30, 23-34–23-35 for-profit companies, 15-4 4-39, 13-4 without recycling, 9-21 overview, 23-29–23-30 foreign currencies, 7-7 income taxes, 18-45 FASB. See Financial Accounting ratio analysis. See ratio analysis foreign currency risk, 16-40 provisions vs. liabilities, 13-41 Standards Board (FASB) techniques of, 23-30–23-34 forfeitures, 16-35 extended payment terms, 6-26 favourable lease, 12-19 trend analysis, 23-30, 23-34 formal plan to sell, 4-16 extended warranties, 6-19 feedback, 2-6, 4-7 vertical analysis, 23-33–23-34 forms of organization, 2-19 extensible business reporting feedback value, 4-12, 4-26 financial statements, 1-3, 2-29, forward contract, 16-4, 16-7, language (XBRL), 1-24 finance leases, 20-8, 20-37, 20-38, C-3, C-20 16-10, 16-14–16-16, 16-18, external users, 1-3 20-40–20-42, 20-44–20-45 see also specific types of financial 17-16 extinguishment of debt, 14-20 financial accounting, 1-3 statements forward purchase contracts, 17-16 extractive industries, 10-37, 11-36 Financial Accounting Standards analysis. See analysis forward sales contract, 17-16 Board (FASB), 1-12, 1-16 basic elements, 2-12 foundational principles, 2-16–2-31 F conceptual framework, 2-4 basic presentation requirements, measurement, 2-23–2-29 face rate, 7-23 derecognition of receivables, 4-21–4-22 presentation and disclosure, face value, 7-23–7-24, 14-9 7-41–7-42 comparative financial statements, 2-29–2-31 factoring receivables, 7-31 financial statement presentation, 21-36–21-38 recognition and derecognition, fair value, 2-24, 10-24, 11-21 22-4, 22-39 condensed financial statements, 2-17–2-22 advanced models for impairment approach, 18-33 4-27–4-28 franchise, 12-19 measurement of, 16-54–16-58 leases, 20-4 consolidation, 2-20, 9-39 fraud, financial, 21-28–21-29 best-quality fair value measure, nonmonetary exchange, 10-14 credible financial statements, 2-9 fraudulent financial reporting, 3-12 performance reporting disclosure, 23-3 2-33–2-34 “cost” on books, 10-18 project, 4-39 discounting, 18-43 Fraudulent Financial Reporting: disclosure, 16-55–16-58 post-retirement benefits other elements of financial statements, 1998-2007, 2-33–2-34 estimate of, 2-26 than pensions, 19-26 2-4, 2-12–2-16, 3-2–3-9, C-5 Freakonomics (Levitt and Dubner), less costs of disposal, 11-23 projected benefit method, 19-11 general-purpose financial 1-10 less costs to sell, 10-22, 10-27 financial assets, 5-8, 5-12–5-13, statements, 1-7, 2-4 free cash flow, 5-36–5-37, 22-38–22-39 loans receivable, 7-23, 7-30 7-6, 7-14 measurement of financial free cash flow to operating cash marketable securities, 14-16 financial calculators, 3-19–3-20, 3-23 statement elements, 3-2–3-9 flow, 23-32 measurement, using IFRS 13, financial components approach, 7-35 note disclosures, 1-4 freedom from material error, 2-9 3-9–3-13 financial crisis, 1-7, 1-19 notes to financial statements, freight costs, 8-50 measurement of, 16-54–16-58 financial engineering, 2-32 2-29–2-30, 4-36, 23-6 fresh start accounting, 15-32 nonmonetary transactions, 10-15 financial flexibility, 5-5, 5-7, 5-19, 5-35 as point estimates, 4-8 fulfilment value, 2-24 not equal to cash consideration, financial fraud, 21-28–21-29 preparation from work sheet, full cost method, 10-22 7-30 financial guarantees, 13-38–13-40, C-27–C-30 full disclosure principle, 2-29–2-31, notes receivable, 7-23 13-41–13-42 presentation. See presentation 4-21, 5-19, 6-9, 14-4, 23-4–23-5 property, plant, and equipment, financial institutions, 1-4, 1-7 Primary Financial Statements full retrospective application, 10-24 financial instruments, 5-8, 8-52, Project, 15-30 21-10–21-14, 21-24 relative fair value, 6-48, 15-13 13-6, 16-3 specimen financial statements, function, 4-28–4-30, 5-7 and revenue recognition, 6-27 financial liabilities, 13-6–13-7, B-1–B-21 fundamental qualitative fair value hedge, 16-42–16-44 16-3, 20-52 supplementary information, 2-30 characteristics, 2-6–2-9 fair value hierarchy, 3-11 definition, 16-22 users, 1-3, 1-5, 2-5, 6-4 funded, 19-6 fair value less costs to sell, 8-38–8-39 long-term financial liabilities. See financial technology industry, 1-1 future income tax assets, 5-18, fair value loss impairment model, 9-31 long-term debt financing activities, 4-3, 5-27, 5-32, 18-10, 18-15 fair value model (FVM), 10-23, measurement, 13-6–13-7 13-42, 22-6, 22-19, 22-37–22-38 future income tax expense, 10-27–10-28, 10-32 recognition at fair value, 14-16 finished goods inventory, 8-5 18-10, 18-14 fair value option, 2-28, 5-8, 9-47, 14-19 financial ratios. See ratio analysis finite life, 5-17, 12-14 future income tax liabilities, 5-19, fair value principle, 2-27–2-29 financial reorganization, 15-32–15-34 firm underwriting, 14-3 18-10, 18-13–18-15 fair value standard, 10-14–10-15 financial reporting, 1-3 first-in, first-out (FIFO) cost future income tax method, 18-10, fair value test, 12-23 bias in, 1-11, 4-8, 6-10 formula, 8-27–8-29, 8-50 18-19, 18-40–18-41 fair value through net income conceptual framework. See first principles, 2-32 future income taxes. See deferred/ (FV-NI), 9-15–9-19, 9-47, conceptual framework five-step revenue recognition future income taxes 14-22, 16-40, 16-41, decision-usefulness approach, 1-7 process future tax rates, 18-23–18-24 16-43–16-44, C-19 economic or business allocation of transaction price future value, A-1, A-3 analysis of, using work sheet, 22-44 environment, 2-33 to separate performance futures contract, 16-4, 16-10, direct and indirect method, 22-25 entity perspective, 1-7 obligations, 6-28–6-31 16-16–16-18 fair value through other financial engineering, 2-32 determination of transaction FV-NI. See fair value through net comprehensive income fraudulent financial reporting, price, 6-21–6-28 income (FV-NI) (FV-OCI), 4-13, 9-20–9-26, 2-33–2-34 example, 6-11–6-12 FV-OCI. See fair value through 9-47, 16-41, 16-43–16-44, integrated reporting, 1-24 identification of separate other comprehensive income 18-39, C-19 issues, 2-31–2-34 performance obligations, (FV-OCI) analysis of, using work sheet, 22-44 objective of financial reporting, 6-16–6-20 income from FV-OCI investments 1-7–1-9, 2-31–2-32 identification of contract with G (debt instruments), 9-23–9-25 other pressures, 2-33–2-34 customers, 6-13–6-16 GAAP. See generally accepted income from FV-OCI investments proprietary perspective, 1-7 recognition of revenue when accounting principles (shares), 9-21–9-22 “prudent” approach, 2-1 each performance obligation (GAAP) investments in debt instruments and raising capital, 1-1–1-2 satisfied, 6-32–6-35 GAAP hierarchy, 1-17–1-18, 21-4 of other entities, 9-23–9-26 stakeholders, 1-5–1-7 summary of, 6-35 gain contingencies, 13-35 BMIndexes.indd Page 12 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-12 Subject Index
gains, 2-15 Goods and Services Tax (GST), general hedge accounting, 16-38 current/non-current actuarial gains and losses, 19-13, 13-14–13-16 hedge accounting, 16-6, 16-8, classification, 13-47 19-17, 19-22–19-25, 19-35 goods in transit, 8-8–8-9 16-38, 16-39, 16-41–16-50 current vs. non-current liabilities, consistent treatment, 16-29 goodwill, 5-17, 12-4–12-5 hedge accounting standards, need 5-38 contingent gains, 5-23 after mergers and acquisitions, 5-1 for, 16-39–16-40 decommissioning and restoration experience gain or loss, 19-13 analysis, 12-34–12-35, 22-45 hedged item, 16-39 obligations, 13-46 realized, 9-8, 18-6 bargain purchase, 12-26–12-27 hedging item, 16-39 depreciation, 11-35–11-36 taxation of, 18-6–18-7 business importance, 12-3–12-4 interest rate swaps, 16-45–16-48 derecognition, 7-41 unrealized holding gains or losses, characteristics, 12-3–12-4 macro hedging, 16-38 disclosure, 23-35 9-8, 18-6–18-7, C-9 direct and indirect method, no symmetry in accounting, disclosure, liabilities, 13-48 unusual gains, 4-21 22-28–22-29 and need for special hedge disclosure, property, plant, and vs. revenues, 4-21 disclosure, 12-30–12-33 accounting, 16-41 equipment, 11-36 general and administrative costs, 6-44 discounted free cash flow method, purchase commitments, 16-44 disclosure of date financial general and administrative 12-42 recognized assets as hedged items, statement authorized for expenses, 8-19 excess-earnings approach, 16-42–16-44 issue, 5-38 general chequing account, 7-43 12-37–12-41 symmetry in accounting, and discontinued operations, 4-38 general hedge accounting, 16-38 IFRS, effects of, 12-1 no need for special hedge earnings per share (EPS), 4-38, general journal, C-6, C-8 IFRS-ASPE comparison, 12-36 accounting, 16-40 17-27–17-28 general ledger, C-3, C-5 impairment, 12-27–12-30 hedging item, 16-39, 16-42–16-43 equity, accounting for, general-purpose financial internally generated goodwill, 12-24 held for sale, 4-15–4-16, 11-27–11-28, 15-29–15-30 statements, 1-7, 2-4 measurement, 12-4, 12-24–12-27 11-29, 11-36 expenses, 4-38 generally accepted accounting negative goodwill, 12-26 held for trading instruments, 9-7 fundamental similarities, principles (GAAP), 1-6, number of years method, 12-42 held to maturity instruments, 9-11 2-34–2-35 1-12–1-13 present value–based accounting high/low preferred shares, goodwill, 12-36 see also Accounting Standards for measurements, 3-5 16-23–16-24 held for sale, 11-36 Private Enterprises (ASPE); presentation, 12-30–12-33 highest and best use, 3-10 impairment, 7-41, 9-46, International Financial purchased goodwill, 12-24–12-26 historical cost-based model, 2-27 11-35–11-36 Reporting Standards (IFRS) recognition, 12-24–12-27 historical cost measures, 3-3 income taxes, 18-44 in absence of specific GAAP total-earnings approach, historical cost principle, 2-24, intangible assets, 12-35–12-37 guidance, 2-32 12-41–12-42 2-26–2-27, 23-26, 23-35 inventories, 8-45–8-46 changes in accounting principle, valuation after acquisition, 12-27 depreciable assets, C-11 investments, 9-44–9-47 21-5–21-7 valuation of goodwill, 12-27, on statement of financial leases, 20-18–20-20, 20-49–20-51 comprehensive income, 4-12 12-37–12-42 position, 5-6 liabilities, 13-45–13-48 conceptual framework, 1-18 government business enterprises, historical costs, 10-23 long-term debt, 14-32 consolidated statements, 2-20 15-3 holder, 7-31 measurement, 23-35–23-36 CPA Canada Handbook, government grants, 10-18–10-19 horizontal analysis, 23-32–23-33 measurement issues, 3-27–3-28, 1-13, 1-18 government units, 15-3 human behaviour, 1-10 9-46 disclosure of accounting grant date, 16-33, 16-34 hybrid/compound instruments, non-financial liabilities, 13-47 methods, 4-8 Great Depression, 1-12 16-21, 16-22–16-25 non-financial obligations, 13-23 entities responsible for GAAP, 1-13 gross average accounts receivable examples of, 16-23 other comprehensive income/ GAAP hierarchy, 1-17–1-18 (GAAR), 7-19 measurement, 16-25 comprehensive income, under IFRS, 1-18 gross investment in lease, 20-39 presentation, 16-21–16-25 4-38, 9-46 levels of GAAP, 21-4 gross margin percentage, 8-42 hyperinflation, 2-25 pension plan, 19-35 non-consolidated entities, 14-27 gross method, 7-12 post-employment benefits, not always optimal, 4-8 gross profit margin, 4-28, 23-31 I 19-34–19-35 other sources of GAAP, 1-18 gross profit method, 8-41–8-43 IAS. See International Accounting premium offers, 13-32–13-33 primary sources, 1-18, 2-16, gross profit percentage, 8-42–8-43 Standards (IAS) “probable,” and recognition of 21-4, 21-6 guaranteed residual value, 20-14, IASB. See International Accounting losses and liabilities, 2-18 principles-based approach, 20-16, 20-24, 20-25, 20-30 Standards Board (IASB) property, plant, and equipment, 1-23, 2-32 guarantees identifiable, 12-5 10-34–10-37 principles vs. rules, 1-22 financial guarantees, 13-38–13-40, identifiable net assets, 12-4 receivables, 7-41 professional judgement, 1-19 13-41–13-42 if-converted method, 17-13–17-14 revenue recognition, 6-47–6-48 rational and systematic allocation product guarantees, 13-26–13-30 IFRIC. See International Financial significant influence investments, policy, 2-22 see also warranties Reporting Interpretation 9-47 rules-based approach, 1-22 Committee (IFRIC) statement of cash flows, 5-38, 22-39 sources of GAAP, 1-18 H IFRIC 1, 13-26 statement of changes in stock dividends, 15-17 half-year rule, 11-38 IFRS. See International Financial shareholders’ equity, 4-39 taxable income, 13-17 hard numbers, 2-10, 4-8, 5-6 Reporting Standards (IFRS) statement of financial position U.S. GAAP, 1-16, 1-23, 8-30 Harmonized Sales Tax (HST), 13-14 IFRS Advisory Council, 1-15 (balance sheet), 5-38 see also Financial Accounting head offices, 18-1 IFRS-ASPE comparison, statement of income/ Standards Board (FASB) hedge accounting, 16-6, 16-8, 16-38, 21-26–21-27 comprehensive income gift cards, 6-27–6-28 16-39, 16-41–16-50 see also Accounting Standards for (income statement), 4-38–4-39 going concern assumption, see also hedging Private Enterprises (ASPE); statement of retained earnings, 4-39 2-25–2-26 hedged item, 16-39, 16-42–16-43 International Financial uncertain commitments, goods, 6-4 hedging, 16-6, 16-39 Reporting Standards (IFRS) 13-46, 13-47 consigned goods, 8-9 act of hedging, 16-39 accounting changes, 4-39 IFRS Foundation, 1-15 distinct goods, 6-15 anticipated purchases, cash and cash equivalents, 7-41 illegal acts, 23-7 included in inventory, 8-8–8-13 16-48–16-50 cash flow per share information, immediate recognition approach, notes issued for, 14-18–14-19 cash flow hedge, 16-42, 5-38 19-17 sale of goods, 6-36–6-37 16-44–16-50 complex financial instruments, impaired, 11-20 see also sales transaction derivatives used for, 16-39–16-40 16-36–16-38 impairment, 11-19–11-27, 20-17 substantially the same, 6-20 effective (economic) hedge, 16-40 contingencies, 13-46–13-47 accounts receivable, 7-14–7-20 vs. sales of services, 6-4 fair value hedge, 16-42–16-44 contingent gains, 13-47 asset groups, 11-25–11-27 BMIndexes.indd Page 13 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-13
business perspective, 11-3–11-4 income bonds, 14-4 loss carryback, 18-26, 18-27–18-28 at acquisition, 12-6–12-7 cash-generating unit (CGU), income models, 3-3–3-4 loss carryforward, 18-26, after acquisition, 12-12–12-16 11-25–11-27 income statement, 1-3, 4-3, 4-36, 18-28–18-33, 18-32–18-33 after mergers and acquisitions, 5-1 cost recovery impairment model, 18-4, 18-37–18-39, 19-28, loss for income tax purposes, amortization, 11-5, 12-14 11-21–11-22, 11-24–11-25, 21-29–21-34, 23-15, 23-34, C-3 18-26–18-33 analysis, 12-34–12-35 12-21–12-22 see also statement of income/ multiple differences, 18-8–18-9, artistic-related intangible assets, goodwill, 12-27–12-30 comprehensive income 18-20–18-23 12-18 IFRS-ASPE comparison, 7-41, (income statement) originating difference, 18-8 business combination, 12-7 9-46, 11-35–11-36 Income Summary account, C-21 permanent differences, 18-6–18-8 business importance, 12-3–12-4 indefinite-life intangibles, 12-23 Income Tax Act, 11-37 presentation, 18-35–18-39, 18-44, characteristics, 12-5–12-6 indicators of impairment, income tax benefit, 18-15 18-49–18-50, 18-53–18-54 contract-based intangible assets, 11-20–11-21 income taxes, 13-16–13-17, recognition, 18-44 12-18–12-19 intangible assets. See intangible C-25–C-26 reversible differences, 18-6–18-8 customer-related intangible assets analysis, 18-42–18-43 statement of financial position assets, 12-17–12-18 limited-life intangibles, from a business perspective, presentation, 18-35–18-37 derecognition, 12-24 12-21–12-22 18-3–18-5 substantively enacted rate, 18-24 development phase, 12-9–12-11 rational entity impairment model, calculation of current income tax rate change, 18-51 disclosure, 5-1, 12-30–12-33 12-21–12-22 taxes, 18-9–18-10 tax rate considerations, 18-23–18-26 finite life, 5-17 rational entity model, 11-21, capital cost allowance (CCA), 18-7 taxable income, 13-16–13-17, IFRS-ASPE comparison, 11-22–11-25 capital cost allowance method, 18-5–18-9, 18-47, 18-51–18-52 12-35–12-37 recognition and measurement 11-37–11-41 taxable temporary difference, impairment, generally, 12-1 models, 11-21–11-25 comprehensive illustration, 18-12, 18-13, 18-24 impairment of indefinite-life recoverable amount, 11-22 18-45–18-54 taxes payable, 13-16–13-17, 18-47, intangibles, 12-23 in value, equity method, 9-37 current income taxes, 18-5–18-10 18-51–18-52, 22-19, 22-29, impairment of limited-life impairment approach, 18-33 current tax expense, 18-11, 18-47, 22-46 intangibles, 12-21–12-22 impairment loss, 9-27, 11-21–11-22, 18-51–18-52 taxes payable method, 18-10, indefinite life, 5-17, 12-14, 11-24, 11-26–11-27 deductible temporary difference, 18-39 12-15–12-16, 12-23 impairment models, 9-26–9-31 18-12, 18-15–18-16 temporary difference, 18-8, internally developed intangible expected loss impairment model, deferred/future income taxes, 18-12 assets, 5-17, 12-6 9-27–9-31 18-10–18-19 temporary difference approach, limited-life intangibles, 12-14–12-15, fair value loss impairment model, deferred tax asset account, 18-10, 18-19, 18-43 12-21–12-22 9-31 18-33–18-35 timing differences, 18-8 marketing-related intangible incurred loss impairment model, deferred tax assets, 18-11, work sheet, C-25–C-26 assets, 12-16–12-17 9-26–9-27, 9-31 18-15–18-19, 18-36–18-37, incremental borrowing rate, 20-14 measurement, 12-6–12-16 summary of, 9-31 18-43, 18-47–18-48, 18-52 incremental costs, 6-44 measurement difficulties, 5-17 implicit interest rate, 7-24, 14-16 deferred tax expense, 18-11, 18-14, incremental method, 16-25 prepayments, 12-7–12-9 impracticable, 21-10, 21-13–21-14 18-47–18-48, 18-52 incurred loss impairment model, presentation, 12-30–12-33 imprest bank accounts, 7-43 deferred tax liabilities, 18-11, 9-26–9-27, 9-31 purchased intangibles, 12-6–12-7 imprest system, 7-43–7-44 18-13–18-15, 18-47–18-48, indefinite life, 5-17, 12-14, recognition, 12-6–12-16 imputation, 7-29 18-52, 22-29–22-30, 22-46 12-15–12-16, 12-19, research phase, 12-9–12-10 imputed interest rate, 7-29, 14-16 depreciation, 11-37–11-41 12-23, 12-27 technology-based intangible in-process research and disclosure, 18-39–18-41, 18-44 independent finance company, 20-36 assets, 12-19–12-21 development (R&D), 12-7 disclosure requirements, indirect costs, 16-4 useful life, 5-17 in-substance common shares, 15-6 18-39–18-41 indirect method, 5-32–5-33, 8-33, valuation difficulties, 5-17 in-substance defeasance, 14-26 discounting of deferred tax assets 22-9, 22-10, 22-15–22-21 integral view, 23-14 in the money, 16-13, 17-15 and liabilities, 18-24 induced conversion, 16-28 integrated reporting, 1-24 incidental transactions, 2-15, discrete view, 23-14 industries, 4-3–4-7 intellectual capital, 12-34 2-16, 4-26 effective tax rate, 18-23 industry practice, 1-18 interest, 10-11 income errors, income tax effects of, inflation, 2-25 accrued interest, C-15–C-16 accounting income, 18-5–18-6 21-33–21-34 inflation accounting, 2-25 capitalization of interest, 10-8 all-inclusive approach, 4-12 future income tax assets, information compound interest, 3-15–3-16 under amortized cost model, 18-10, 18-15 integrity of, 4-9 consistent treatment, 16-29 9-11–9-14 future income tax expense, quality of, 4-7–4-12 costs, and defined benefit plan, comprehensive income, 2-16, 4-12 18-10, 18-14 useful information, 2-18 19-12 leases, 20-39, 20-44 future income tax liabilities, information asymmetry, 1-9–1-11, nature of, 3-13–3-14 measurement, 4-8, 4-12–4-14 18-10, 18-13–18-15 2-5, 17-1 nonrecognition of interest multiple view of income, 4-14 future income tax method, 18-10, adverse selection, 1-10–1-11, 2-5 element, 7-13–7-14 net income. See net income 18-19, 18-40–18-41 moral hazard, 1-11, 2-5 notes receivable, 7-21 nonrecurring income or losses, 4-26 future tax rates, 18-23–18-24 information overload, 2-29 simple interest, 3-15 numbers, and accounting future taxable income not information symmetry, 1-9 interest-bearing investment, 9-11 methods, 4-8 probable, 18-30–18-32 initial direct costs, 20-48 interest-bearing note issued, 13-10 operating income, 4-7, 4-12 future taxable income probable, initial token offering, 15-1 interest-bearing notes, 7-21, operations income, 4-26 18-29–18-30 input measures, 6-33, 6-50 7-27–7-29 other comprehensive income. See ideal corporate tax rate, 18-1 input tax credit, 13-14 interest rate implicit in lease, other comprehensive income IFRS-ASPE comparison, 18-44 insider trading, 23-4 20-14 (OCI) income statement presentation, insolvency, 23-25 interest rate risk, 16-6, 16-7, 16-39 sustainability of, 4-9 18-37–18-39 inspections, 10-29, 10-30–10-32 interest rate swaps, 16-45–16-48 tax income, 18-15 income tax accounting objectives, instalment purchases, 20-7 interest rates taxable income, 13-16–13-17, 18-19–18-20 institutional investors, 1-8–1-9, bonds, 14-9–14-10 18-5–18-9, 18-47, 18-51–18-52 income tax withholding, 9-1–9-2 calculation of, 3-25–3-26 income approach, 10-18 13-18–13-19 insurance, 5-15, C-11 current market rate, 19-12 income available to common interperiod tax allocation, 18-19 insurance claims, 7-10 effective interest rate, 7-23 shareholders, 17-6–17-7 intraperiod tax allocation, 18-37 intangible assets, 5-17, 12-5 implicit interest rate, 7-24, 14-16 BMIndexes.indd Page 14 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-14 Subject Index
interest rates (continued) International Accounting Standards assurance-type warranty, 13-27, goodwill, 12-1, 12-28–12-30, imputed interest rate, 7-29, 14-16 Board (IASB), 1-12, 1-14–1-15, 13-28, 13-30 12-30–12-31 incremental borrowing rate, 20-14 1-16, 1-21, 1-22 balance sheet approach, 2-21 hedge accounting, 16-42, 16-44, interest rate implicit in see also International Financial bank overdrafts, 7-8 16-47, 16-49 lease, 20-14 Reporting Standards (IFRS) basic presentation requirements, held for sale, 4-16, 11-27–11-28 long-term debt, 14-3 accounting policies and estimates, 4-21 impairment, 7-41, 9-26, 9-27, market rate, 7-23, 7-27, 7-29 21-27 biological assets and agricultural 9-28–9-29, 9-31, 9-41, 11-21 non-market interest rates, adoption date for IFRS 15, 6-48 produce, 8-38 income, 2-15, 4-12 14-16–14-17 conceptual framework, 2-4–2-5, bonus, 13-22 increased disclosure, 2-30 present value calculations, 3-24 2-34, 3-28, 4-14 book value method, 16-27–16-28 indefinite life, 12-15 stated interest rate, 7-23, 7-27, 7-29 derecognition of receivables, 7-42 borrowing costs, 8-19, 10-8 indefinite-life intangibles, 12-23 yield rate, 7-23 disclosures, 2-34–2-35, 15-30, callable debt, 13-12 intangible assets, 12-9, 12-11–12-12, interest receivable, 7-10 23-4–23-5 capital disclosures, 15-25–15-26 12-30–12-31 interim reporting, 23-13–23-18, 23-36 estimation uncertainty, 21-27 capitalization of costs, 10-7 interest, and defined benefit plan, changes in accounting, extractive industries, 10-36–10-37 cash equivalents, 7-8 19-12 23-15–23-16 fair value disclosure, 16-55–16-56 cash flow hedge accounting, 16-47 interest rate swap, 16-46, continuing controversy, financial instruments with cash flows, classification of, 22-6 16-47–16-48 23-16–23-17 characteristics of equity, change in accounting estimate, interim reporting, 23-13 and continuous disclosures, 14-32, 15-30 21-22–21-23 inventory, 2-10, 8-7, 8-44 23-17–23-18 financial statement presentation, combined statement of income/ inventory cost, 8-17 discrete view, 23-14 5-38, 15-30, 22-4, 22-40 comprehensive income, investment measurement models, earnings per share, 23-16 hedge accounting, 16-38 4-22–4-24 9-47–9-48 integral view, 23-14 income taxes, 18-45 components, 10-6, 11-6 investment property, 10-21, 10-23 requirements, 23-14–23-15 intangible assets, 12-37 comprehensive income, 2-16 investments, 9-8, 9-15, 9-23 seasonality, 23-16 leases, 20-4, 21-3 contingencies, 13-36, 13-42 issued but unpaid-for shares, 15-11 tax expense, calculation of, 23-14 liabilities, 13-48 control, 2-20, 9-38, 9-40 and large stock dividend, 15-21 unique problems in, 23-15–23-17 long-term debt, 14-32 convertible debt at time of leases, 20-4, 20-8, 20-9, 20-11–20-13, interim reports, 23-13 materiality, 2-34 conversion, 16-28 20-15–20-23, 20-31, 20-34, internal control, 7-42 performance reporting project, cost model, 10-23 20-46, 20-48, 20-49–20-51, internal control systems, 1-20 4-39, 15-30 current assets, 9-40 20-52–20-53, 20-55 internal users, 1-3 post-employment benefits, current liabilities, 13-8 lessees, 20-11–20-35 International Accounting Standards 19-9–19-10 customer loyalty programs, 13-30 lessors, 20-36–20-49 (IAS), 1-18 Primary Financial Statements decommissioning and restoration liabilities, definition of, 13-5 see also International Financial Project, 15-30 obligations, 13-23, 13-26 liabilities, recognition of, 5-23 Reporting Standards (IFRS) projected benefit method, 19-11 deferred tax assets and liabilities, lifetime expected credit losses, accounting policies, changes in revenue recognition, 6-10–6-11 18-36 7-14, 9-29 accounting estimates and revised definitions of terms, 13-4 defined benefit obligation, 19-18 limited-life intangibles, 12-21–12-22 errors, 21-20 segmented reporting, 23-10 defined benefit plan, 19-8, 19-15, long-term contracts, 6-49–6-50 agriculture, 8-37, 10-22 temporary difference approach, 19-16–19-17, 19-25 low-value leases, 20-31–20-35 biological assets and agricultural 18-43 defined contribution plan, 19-7 measurability and, 2-18 produce, 6-48, 8-46 International Accounting Standards depreciation, 11-6, 11-18 measurement uncertainty, 21-23 borrowing costs, 10-8 Committee (IASC), 1-14 derecognition, 7-33–7-34, 7-35 mineral resources, 10-36–10-37 contingencies, 13-36 International Financial Reporting derivatives, 16-19–16-20 mixed measurement model, 16-39 cost, 10-11 Interpretation Committee direct method, 22-9 monetary unit, stability of, 2-25 depreciation, 11-12 (IFRIC), 1-15, 1-18, 18-45 disclosure, 12-30–12-31, 23-5 non-consolidated entities, 14-27 disclosure, 8-44, 23-5 International Financial Reporting disclosure, long-term debt, 14-29 non-financial liabilities, 13-7 employee benefits, 19-7 Standards (IFRS), 1-13, earnings per share (EPS), non-financial obligations, 13-23 fair value through other 21-4–21-5 17-4–17-5 off–balance sheet financing, 14-27 comprehensive income, 4-13 see also generally accepted effective interest method, 7-23, other comprehensive income, hyperinflation, 2-25, 10-23 accounting principles 7-25, 9-12, 14-12–14-13 2-16, 4-12–4-14, 4-31, 5-20, impairment of assets, 12-36, 20-17 (GAAP); IFRS-ASPE equity instruments, 16-22–16-23 9-20, 10-24 impracticable, 21-10 comparison; International evolution of a new or revised own equity instruments, income taxes, 18-5, 18-11, 18-32, Accounting Standards (IAS); IFRS, 1-15 16-19–16-20 18-40 International Accounting existence uncertainty, 2-18, 2-23 past service costs, 19-13 intangible assets, 12-9, 12-14, Standards Board (IASB) expected loss impairment model, pension plan, disclosure, 19-29 12-37 accounting changes, 21-3–21-4 9-27 post-employment benefits, 19-27 inventories, 8-38, 8-45–8-46 accounting income, 18-5 expense approach, 13-30 premiums and coupons, 13-32, investment classifications, 15-24 accounting policies, 21-26, 23-7 expenses, 4-28, 4-29 13-33 investment property, 10-21, 10-28 accounts receivable, 7-14 fair value, 2-27, 3-7, 3-9–3-13, price-level change, 2-25 leases, 20-49 accumulated other comprehensive 10-24, 10-27, 11-22–11-23, primary sources of GAAP, markdowns, 8-50 income, 5-20, 9-20 12-36, 14-19 21-4–21-5 pension plans, 19-6, 19-36 affirmative judgement approach, fair value option, 2-28–2-29, 14-19 principles-based approach, presentation of financial 18-33 finance lease, 20-37 1-23, 2-32 statements, 13-40–13-41, 21-7, aggregated segments, 23-10 financial assets, 7-14, 9-47–9-48 probability and, 2-18 21-20, 22-39 all-inclusive approach, 4-12 financial instruments, 5-8, 20-52 “probable,” 2-18 property, plant, and equipment, amounts payable under residual financial liabilities, 13-6, 16-22, product costs, 8-18 10-5, 10-21, 11-28 value guarantee, 20-25 20-52 professional judgement, 1-19 provisions, contingent liabilities, asset impairment, 3-7 financial risks, 16-6 profit-sharing payments, 13-22 and contingent assets, 8-10, asset-liability approach, 6-10–6-11, forfeitures, 16-35 property, plant, and equipment, 13-4, 13-41, 13-48–13-49 6-35, 6-47–6-48 future income tax method, 18-40 5-15 statement of cash flows, 5-38, asset retirement costs, 10-9–10-10 future tax expense or benefit, provisions, 5-19, 5-23 22-5, 22-40 associates, investments in, 9-33, 18-25 prudence, 2-1 taxable profit, 18-5 9-43 GAAP under IFRS, 1-18 purchase commitments, 16-9 BMIndexes.indd Page 15 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-15
rational entity impairment model, direct and indirect method, 22-26 investment property, 10-21, 10-23 junk bonds, 14-4 11-22, 11-23, 11-26, 12-21–12-22 disclosure, 8-43–8-44 investments just-in-time inventory ordering, 16-7 reacquisition of shares, 15-15 ending inventory, 8-14–8-15, C-22 amortized cost model, 9-11–9-15 receivables, 7-33–7-34, 7-35, estimates, 8-40–8-43 analysis, 9-44 K 7-37, 7-41 finished goods inventory, 8-5 application of accounting knowledge assets, 12-34 reclassification of debt as current, goods in transit, 8-8–8-9 models, 9-9 13-12 goods included in inventory, associates, investments in, L refund liability, 7-13 8-8–8-13 9-32–9-38, 9-43–9-44, laid-down costs, 2-26 related-party transactions, 23-18 IFRS-ASPE comparison, 8-45–8-46 22-27, 22-44 land, 20-55, 22-18–22-19, 22-28, replacements, major overhauls, indirect method, 22-18 available for sale, 9-7 22-45 and inspections, 10-32 information for decision-making, cost model, 9-9–9-15 land and building, 20-55 residual value method, 16-25 8-5–8-6 in debt instruments of other language of accounting and retirement of shares, 15-15 inventory cost formulas, and entities, 9-23–9-26 business, 2-12 retrospective application, interim reports, 23-14–23-15 disclosure, 9-39–9-43 large stock dividend, 15-21 21-13, 21-14 inventory errors, 8-14–8-16 equity investments, 7-8 last-in, first-out (LIFO) cost retrospective restatement, 21-14 inventory tracking, 8-1 expected loss impairment model, formula, 2-10, 8-29–8-30 revaluation model, 10-42, last-in, first-out (LIFO) cost 9-27–9-31 law, corporate, 15-4–15-5 12-13–12-14 formula, 2-10 fair value loss impairment model, lawsuits, 13-37 revenue approach, 13-30, 13-33 manufacturing inventory, 5-13 9-31 lease payments, 20-5, 20-9–20-10, 20-19 revenue from contracts with measurement, 8-6, 8-16–8-20 fair value model, 10-28 lease term, 20-13, 20-16 customers, 2-21, 6-10, 20-52 merchandise inventory, 8-4 fair value through net income leased asset, 20-24–20-30 revenue recognition, 6-32, physical count, C-22 (FV-NI), 9-15–9-19 leasehold, 12-19 6-38, 6-45 planning and control, 8-5 fair value through other leasehold improvements, 10-20 sales revenue, 7-12 presentation, 8-43–8-44 comprehensive income leases, 12-19, 20-5 service-type warranty, 13-27–13-28, purchase commitments, 8-10–8-11 (FV-OCI), 9-20–9-26 see also lessee; lessor 13-30 purchases and inventory held for trading, 9-7 advantages of leasing, 20-5–20-7 share appreciation rights plans, misstated, 8-15–8-16 held to maturity investments, 9-11 under ASPE, 20-8–20-9, 16-51 raw materials inventory, 8-5 IFRS-ASPE comparison, 9-44–9-47 20-9–20-10, 20-12, 20-13–20-15, share-based payment, 10-13 recognition of physical goods impairment models, 9-26–9-31 20-18–20-23, 20-31–20-35, short-term leases, 20-31–20-35 included in inventory, 8-7–8-13 incurred loss impairment model, 20-36–20-38, 20-46, 20-48, short-term liability expected to be repurchase agreements, 8-9–8-10 9-26–9-27, 9-31 20-49–20-51, 20-53–20-55 refinanced, 13-12, 13-13 risks and rewards, 8-11–8-12 information for decision- asset recognition, 20-18 significant influence, 9-37, 9-40 types of inventory, 8-51–8-52 making, 9-7 bargain purchase option, statement of cash flows, 22-9, understatement of, 8-9 long-term investments, 5-15 20-9–20-10, 20-46 22-32–22-33, 22-34 vendor rebate, 8-18 on margin, 9-8 bargain renewal option, statement of changes in equity, volume rebates, 8-17–8-18 measurement, overview, 9-7–9-9 20-13–20-14 4-32, 4-34–4-35 vs. property, plant, and non-current investments, 5-15 business perspective, 20-4–20-5 statement of income/ equipment, 10-5 non-equity investments, 22-5 capital lease method, 20-20–20-23 comprehensive income, work-in-process inventory, 8-5 present value–based accounting capital leases, 20-8, 20-18, 4-22–4-24, 4-28, 4-29 inventory accounting systems measurements, 3-5 20-31–20-32, 20-34, 20-37–20-38 subsequent events, 23-22–23-23 periodic inventory system, 8-21, presentation, 9-39–9-43 capitalized leases, 20-7–20-8 subsidiaries, investments in, 8-28, 8-33, C-22 recoverable amount, 9-37 classification approach, 20-7, 20-13 9-38–9-39 perpetual inventory system, 8-21, returns, 9-5 conceptual nature of a lease, tax base, 18-11 8-26, 8-28, 8-33, C-22 in shares of other entities, 9-21–9-23 20-7–20-8 transaction costs, 7-23 quantities only system, 8-23 short-term investments, 5-12, 7-6 contract-based approach, United States, and IFRS, 1-23 inventory costs, 8-16–8-20, 8-47–8-51 significant influence investments, 20-8–20-9, 20-15–20-18 upside-down presentation, borrowing costs, 8-19 9-32 current and non-current lease 13-40–13-41 cost formula. See cost formulas strategic investments, 9-32–9-39 liabilities, 20-23 voluntary change, 21-5 cost of service providers’ work in subsidiaries, investments in, definitions, importance of, 20-13 vs. U.S. GAAP, 1-23 progress, 8-19 9-38–9-39 depreciable amount, period, and warranties, 13-27–13-28 costs excluded from inventory, 8-19 types of companies, 9-5–9-7 method, 20-19–20-20 zero-profit method, 6-49, 6-55 exceptions to lower of cost and types of investments, 9-3–9-5 depreciation expense, 20-17 International Integrated Reporting net realizable value model, without significant influence or direct financing lease, 20-38 Committee (IIRC), 1-24 8-35–8-40 control, 9-40–9-43 disclosure, 20-34–20-35, Internet, 1-10, 1-24, 15-1, 16-1 fair value less costs to sell, investors, 1-6, 1-8–1-9, 9-5 20-48–20-49, 20-50 interperiod tax allocation, 18-19 8-38–8-39 involuntary conversion, 11-29 discount rate, 20-14 intraperiod tax allocation, 4-30–4-31, flow of costs, 8-12–8-13 IOUs, 7-6, 7-9 “double dipping” at international 18-37 lower of cost and market (LCM), irregular activities, 4-26 level, 20-6 intrinsic value, 16-12, 16-55 8-30 irregular items, 4-12, 4-30 economic life test, 20-13–20-14 intrinsic value method, 16-51 lower of cost and net realizable item-by-item approach, 8-33 effective interest method, 20-20 inventories, 8-7–8-8 value, 8-30–8-35 executory contract approach, 20-7 accounting definition, 8-7–8-8 net realizable value, 8-35–8-36 J favourable lease, 12-19 analysis, 8-44–8-45, 22-44 product costs, 8-18–8-20 Japan, 13-22 finance leases, 20-9, 20-37, 20-38, basket purchases and joint retail inventory method, 8-47–8-51 joint cost, 8-19–8-20 20-40–20-42, 20-44–20-45 product costs, 8-19–8-20 standard cost system, 8-19 joint venture, 9-33 flexibility, 20-6 beginning inventory, C-22 inventory errors, 8-14–8-16 journal entries, C-3 gross investment in lease, 20-39 categories, 8-4–8-5 inventory turnover ratio, 5-41, see also specific journal entries guaranteed residual value, 20-14, change in control, 8-11–8-12 8-44, 23-31 journalizing, C-5–C-6 20-16, 20-24, 20-30 companies with inventory, 8-4 investee, 9-5 journals, 1-18, C-3 under IFRS 16, 20-4, 20-9, consigned goods, 8-9 investing activities, 4-4, 5-27, general journal, C-6, C-8 20-11–20-13, 20-15–20-23, and cost of goods sold, C-22 5-33, 5-36, 22-5–22-6, special journal, C-6 20-31–20-35, 20-36–20-38, costs. See inventory costs 22-19, 22-37 judgement. See professional 20-46, 20-48, 20-49–20-51, as current asset, 5-13–5-14 investment grade securities, 14-5 judgement 20-52–20-53, 20-55 BMIndexes.indd Page 16 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-16 Subject Index
leases (continued) legal entity, 2-19–2-20 sale-leaseback transactions, 20-52, liquidity, 1-12, 5-4, 5-5, 5-9, 5-35, IFRS-ASPE comparison, legal life, 11-7 20-53–20-55 13-42, 14-19, 22-4 20-18–20-20, 20-49–20-51 legal obligations, 13-23 sales-type lease, 20-43–20-44, liquidity ratios, 5-5, 5-6, 5-40, importance of leases, 20-4–20-5 legal title, 6-4, 6-7, 6-9, 6-37, 8-9 20-46–20-47 5-41, 23-31 initial direct costs, 20-48 lenient return or payment policy, 6-7 selling price of asset, 20-43 liquidity risk, 5-6, 16-6, 16-7, interest rate implicit in lessee, 20-5 tax incentives, 20-6 16-14–16-15, 16-39 lease, 20-14 see also leases terminology, 20-39, 20-43 litigation, 13-37 land, 20-55 ASPE approach, 20-11–20-35 types of, 20-36 loan foreclosure, 14-21 land and building, 20-55 current standards, 20-8–20-9 unearned finance or interest loans, 7-10, 7-23 lease amortization schedule, 20-22 disclosure, 20-50 income, 20-39 loans receivable, 7-4, 7-10 lease criteria, 20-11–20-15 discount rate, 20-14 leverage, 15-27 see also notes receivable lease term, 20-13, 20-16 executory costs, 20-14 leveraged buyouts, 14-4, 14-7, 15-14 fair value, 7-23, 7-30 leased asset, 20-24–20-30 under IFRS 16, 20-15–20-18 liabilities, 2-13–2-15, 13-4 long-term loans receivable, leasing environment, 20-5 IFRS approach, 20-11–20-35 accrued liabilities, 22-29 7-22–7-30 liability recognition, 20-18 incremental borrowing rate, 20-14 assets that become liabilities, 11-1 short-term loans receivable, low-value leases, 20-30–20-35 initial measurement, 20-15–20-16 characteristics, 13-4–13-6 7-21–7-22 low-value leases and lease land, 20-55 classification, importance transaction costs, 7-23 portfolios, 20-12–20-13 lease amortization schedule, 20-22 of, 13-6 lockbox accounts, 7-43 manufacturer or dealer lease, lease disclosure, illustration of, classification in statement of long-lived assets, 11-27–11-28 20-38, 20-43–20-44, 20-34–20-35 financial position, 5-7 long-term compensation plans, 16-30 20-46–20-47 less costly financing, 20-6 contingent liability, 13-4, 13-35 long-term contracts, 6-49–6-54 measurement, 20-50 liability to make lease payments, contract liability, 6-43 completed-contract method, 6-56 minimum lease payments, 20-15–20-16 contractual obligations to pay, 5-8 examples of, 6-49–6-50 20-14, 20-18, 20-21, 20-25 measurement after recognition, current liabilities, 5-18 loss in current period, 6-57–6-58 net investment in lease, 20-39 20-16–20-18 see also current liabilities loss on unprofitable contract, non-capitalization method, 20-30 minimum lease payments, current vs. non-current 6-58–6-59 obsolescence, protection against, 20-14, 20-25 classification, 2-26 losses on, 6-57–6-59 20-6 purchase option, 20-29–20-30 deferred income tax liabilities, 5-19 percentage-of-completion off–balance sheet financing, recognition, 20-50 deferred tax liabilities, 18-10, method, 6-49–6-54 20-6–20-7, 20-9 recovery of investment by lessor 18-13–18-15, 18-47–18-48, 18-52 progress billings, 6-49 100% financing at fixed rates, test, 20-14–20-15 definition, 13-4–13-6 treatment under IFRS 15, 6-49–6-50 20-6 residual value, 20-25–20-26, due on demand, 13-11 long-term debt, 5-18–5-20, 14-3 operating leases, 14-27, 20-9, 20-28–20-29 employee-related liabilities, analysis, 14-30–14-31 20-30–20-35, 20-37–20-38, right-of-use asset, accounting for, 13-17–13-22 continuation, with modifications, 20-48–20-49, 20-53 20-15–20-17 environmental liabilities, 3-5, 11-1 14-21, 14-23 present value–based accounting risks and benefits of ownership, and financial flexibility, 5-7 credit ratings, 14-5–14-7 measurements, 3-5 transfer of, 20-13 financial liabilities, 13-6–13-7 debt settlement, 14-21–14-24 presentation, 20-32–20-33 sale-leaseback transactions, 20-52 future income tax liabilities, 5-19, as decision-making information, purchase options, 20-10, unguaranteed residual value, 18-10, 18-13–18-15 14-8 20-24–20-30, 20-44–20-48 20-26–20-29 historical cost, 5-6 defeasance, 14-7, 14-26 real estate leases, 20-51, 20-55 lessor, 20-5 IFRS-ASPE comparison, derecognition, 14-20–14-27 recognition, 20-50 see also leases 13-45–13-48 disclosures, 14-28–14-30 recovery of investment by lessor under ASPE, 20-13–20-15, liquidation approach, 2-26 early retirements and test, 20-14–20-15 20-36–20-38 long-term financial liabilities.See modifications of debt, 14-26 as rent expense, 20-5 ASPE approach, 20-36–20-49 long-term debt exchange of debt instruments, 14-21 residual value, 20-10, 20-14, 20-16, classification criteria, 20-36–20-38 monetary liabilities, 5-7–5-8 extinguishment of debt, 14-20 20-24–20-30, 20-44–20-48 cost of leased asset being non-current liabilities, 13-7 fair value option, 14-19 right-of-use approach, 20-9, sold, 20-43 non-financial liabilities.See non- IFRS-ASPE comparison, 14-32 20-20–20-23 current standards, 20-8–20-9 financial liabilities measurement, 14-8–14-19 right-of-use asset, 20-15–20-17 determination of rental payments, nonmonetary liabilities, 5-7–5-8 non-market interest rates, right-of-use leases, 20-34 20-9–20-10 potential liability, 2-13–2-14 marketable securities, sale-leaseback transactions, 20-51, disclosure, 20-48–20-49, 20-50 recognition, 5-23 14-16–14-17 20-52–20-55 financing-type lease, 20-40–20-42, short-term liabilities, 13-7 non-market interest rates, sales-type lease, 20-38, 20-43–20-44, 20-44–20-45 on statement of financial non-marketable instruments, 20-46–20-47 gross investment in lease, 20-39 position, 5-8 14-17–14-18 short-term leases, 20-30–20-35 gross profit from sale, 20-44 tax base of a liability, 18-12 non-substantial modification of standards under transition, under IFRS 16, 20-36–20-38 types of liabilities, 13-4 terms, 14-24–14-26 20-8–20-9 IFRS approach, 20-36–20-49 liability account, C-3 notes issued for property, goods, substance vs. form, 20-7 initial direct costs, 20-48 licences, 12-19 and services, 14-18–14-19 transfer of ownership test, 20-13 interest or finance income, 20-44 licensing agreements, 6-34, 12-19 off–balance sheet financing, transparency, lack of, 20-4 land, 20-55 life-cycle development stages, 22-8 14-26–14-27 unearned finance or interest lease amortization schedule, lifetime expected credit losses, presentation, 14-28 income, 20-39 20-41–20-42, 20-45 7-14, 9-29 recognition, 14-20–14-27 unguaranteed residual value, manufacturer or dealer lease, limited liability, 15-7 refunding, 14-21 20-14, 20-24, 20-26–20-29, 20-43–20-44, 20-46–20-47 limited liability partnerships repayment before maturity date, 20-46, 20-47 net investment in lease, 20-39 (LLPs), 2-19 14-20–14-21 variable payments, 20-16 operating lease, 20-48–20-49 limited life, 12-14–12-15, 12-19, special situations, 14-16–14-19 ledger, C-3 purchase options, 20-10, 12-21–12-22 troubled debt restructuring, 14-21 general ledger, C-3, C-5 20-44–20-48 limited resources, 1-4 types of companies with subsidiary ledger, C-3 recognition, 20-50 line of credit, 13-8 significant debt financing, legal capital, 15-8 residual value, 20-10 liquidating dividends, 11-15, 15-16, 14-7–14-8 legal control, 9-32 risks and benefits of ownership, 15-18–15-19 understanding debt instruments, legal defeasance, 14-7, 14-26 20-13 liquidation approach, 2-26 14-3–14-8 BMIndexes.indd Page 17 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-17
vs. current liability, 14-28 mandatorily convertible fair value through net income shares, 15-10–15-15 vs. equity, 14-28 instruments, 17-10 (FV-NI), 9-15–9-19 short-term loans receivable, long-term employee benefit plans, manufacturer finance companies, fair value through other 7-21–7-22 19-26–19-27 20-36 comprehensive income short-term notes receivable, long-term financial liabilities manufacturer or dealer lease, 20-38, (FV-OCI), 9-20–9-26 7-21–7-22 bonds payable, 14-3–14-5 20-43–20-44, 20-46–20-47 of fair value using IFRS 13, subsequent events, 23-22–23-24, notes payable, 14-3–14-5 manufacturer’s or dealer’s profit, 20-38 3-9–3-13 23-36 long-term investments, 5-15 manufacturing inventory, 5-13 financial assets, 7-14 tools, 2-23 long-term liabilities, 5-18–5-20 markdown cancellations, 8-48 financial liabilities, 13-6–13-7 transactions, at contract long-term loans receivable, markdowns, 8-48 going concern assumption, inception, 6-38 7-22–7-30 market, 8-30 2-25–2-26 and uncertainty, 2-24–2-25 long-term notes receivable, capital markets, 1-10 goodwill, 12-4, 12-24–12-27 unincorporated businesses, 7-22–7-30 debt market, 1-4 hedge accounting, 16-38 23-24–23-25, 23-36 long-term solvency, 15-26 efficient markets hypothesis, 1-10 historical cost principle, 2-26–2-27 value in use measurements, 3-7–3-8 longer term returns, 9-5 equity market, 1-4 hybrid/compound instruments, measurement date, 16-33 loss carryback, 18-26–18-27, most advantageous market, 3-10 16-25 measurement uncertainty, 2-23, 18-27–18-28 principal market, 3-10–3-11 hybrid measures, 3-3 2-27, 4-36 loss carryforward, 18-26, 18-28–18-33 market-based measure, 2-27 IFRS-ASPE comparison, memo accounts, 19-18 loss events, 9-26–9-27 market models, 3-4 3-27–3-28, 9-46, 23-35–23-36 merchandise inventory, 8-4 loss for income tax purposes, market participant view, 3-7 impairment, 11-21–11-25 mineral resource properties, 18-26–18-33 market rate, 7-23, 7-27, 7-29, 14-10 impairment models, 9-26–9-31 10-21–10-22, 10-36–10-37 losses, 2-16 market risk, 16-6, 16-7–16-8, of income, 4-12–4-14 see also depletion actuarial gains and losses, 19-13, 16-12, 16-16 income measurement, 4-8 mineral resources, 10-21 19-17, 19-22–19-25, 19-35 market valuation model, 2-27 intangible assets, 5-17, 12-6–12-16 see also depletion allowance for loans receivable, market value, C-12 inventory, 8-6 minimum lease payments, 20-14, 7-20 marketable securities, 14-16–14-17 of inventory, 8-16–8-20 20-18, 20-21, 20-25 consistent treatment, 16-29 marketing expenses, 13-33 and inventory accounting minority interest, 9-39 contingent loss, 13-35–13-36 marketing-related intangible assets, systems, 8-20–8-23 misleading disclosure, 23-4 in current period, on profitable 12-16–12-17 investments, 9-7–9-31 mixed measurement model, 16-39 contract, 6-57–6-58 markup, 8-48 items recognized in financial mixed valuation model, 2-27 in current period, on unprofitable markup cancellations, 8-48 statements, C-5 modified cash basis, 4-41 contract, 6-58–6-59 markup on cost, 8-42 leases, 20-50 modified opinion, 23-28–23-29 deductible for tax purposes, matching, 2-21–2-22 long-term loans receivable, monetary assets, 5-7–5-8, 18-7–18-8 and adjusting entries, C-9 7-22–7-30 10-14, 12-5 experience gain or loss, 19-13 depreciable assets, C-11 long-term notes receivable, monetary liabilities, 5-7–5-8 on long-term contracts, 6-57–6-59 depreciation, 11-7 7-22–7-30 monetary unit assumption, 2-25 nonrecurring income or estimate of bad debts, C-17 and lower of cost and net money, 5-12 losses, 4-26 percentage-of-sales approach, 7-17 realizable value, 8-30–8-35 money-market funds, 7-6, 7-8 on profitable contract, 6-57–6-58 material change reports, 23-4 market-based measure, 2-27 money orders, 7-6 realized, 9-8 material right, 6-17–6-18 measurement uncertainty, 2-23, moral hazard, 1-11, 2-5 tax loss, 18-26–18-33 materiality, 2-6–2-7, 2-34, 4-21, 2-27, 21-23 more likely than not, 18-28–18-29 terminal loss, 11-40–11-41 6-9, 10-29 monetary unit assumption, 2-25 mortgage bonds or notes, 14-4 on unprofitable contract, maturity value, 14-9 non-financial liabilities, 13-7 mortgage payable, 22-19 6-58–6-59 MD&A: Guidance on Preparation non-GAAP measures, 4-36–4-37 most advantageous market, 3-10 unrealized holding gains or losses, and Disclosure (CICA), 2-30 non-market interest rates, most likely amount, 6-21 9-8, C-9 measurement, 2-23–2-29 marketable securities, moving-average cost formula, 8-26 unusual losses, 4-21 accounts receivable, 7-11–7-14 14-16–14-17 multiple deliverables, 6-4 low-cost/high-volume strategy, 4-6 bankruptcy, 23-25–23-26 non-market interest rates, multiple performance obligations, lower of cost and market (LCM), cash, 7-6–7-9 non-marketable instruments, 6-17, 6-29–6-31 8-30 cash-settled and other stock 14-17–14-18 multiple-step income statement, lower of cost and net realizable compensation plans, 16-38 notes issued for property, goods, 4-24–4-27 value, 8-30–8-35, 8-50, choice of tool used, 2-24 and services, 14-18–14-19 multiplier, 17-5 8-51–8-52, 11-20 of company performance, 1-4 other key measures, 4-37–4-38 lower of cost and net realizable compound instruments, pension plan, 19-35 N value (LC&NRV) principle, components of, 16-37 periodicity assumption, 2-25 natural resources, 10-21–10-22 8-31–8-35 at cost, 12-6 present value–based accounting see also mineral resources loyalty programs, 13-30–13-31 cost/amortized cost model, measurements, 3-5 nature, 4-28–4-30 lump-sum price, 10-12 9-9–9-15 property, plant, and equipment— negative goodwill, 12-26 lump-sum sales, 15-13 cost-based measures, 3-3, 13-6 after acquisition, 10-23–10-28 negotiable instruments, 7-6 and cost formulas, 8-23–8-30 property, plant, and equipment— net assets, 5-8 M current value measures, 3-3 cost, 10-10–10-19 net carrying amount, 11-6 macro hedging, 16-38 decommissioning and restoration receivables, 7-11–7-14 net cash inflows, 4-7 major overhauls, 10-29, 10-30–10-32 obligations, 13-23, 13-26 receivership, 23-25–23-26 net income, 2-25, 4-12, 5-34 maker, 7-21 defined benefit plan, 19-35 and recognition, 2-23–2-29 accrual-based net income, 4-44 management approach, 23-10 disclosures, 3-9 related-party transactions, analysis of, using work management best estimate, 2-9 discontinued operations, 4-16–4-20 23-18–23-22, 23-36 sheet, 22-44 management bias, 1-11, 1-20–1-21 dividends, 15-16–15-21 remeasurement, 4-16 income approach, 10-18 Management Discussion and Analysis entity-specific measure, 2-27, 3-7 of revenue, 6-10–6-11 losses, C-9 (MD&A), 2-30, 13-34, 23-4 equity, accounting for, 15-30 right-of-use assets, and leases, significantly higher than cash management information circulars, ESOP when using options pricing 20-15–20-18 flows from operations, 5-4 23-3 model, 16-37 segmented reporting, 23-11–23-12 vs. cash flow from operating management intent, 13-12 fair value, 16-54–16-58 share-based compensation, activities, 22-4 managerial accounting, 1-3 fair value principle, 2-27–2-29 16-32–16-36 work sheet, C-27 BMIndexes.indd Page 18 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-18 Subject Index
net income per share. See earnings nonmonetary reciprocal operating segments, 5-1, 23-10–23-11 payment policy, 6-7 per share (EPS) transactions, 16-35 operating transactions, 4-25 payout ratio, 5-41, 15-27, 23-32 net investment in lease, 20-39 nonmonetary transactions, 2-26, operations income, 4-26 payroll deductions, 13-17–13-19 net markdowns, 8-48 6-6, 10-14–10-18 opportunities, 4-4 payroll taxes, 23-14 net markups, 8-48 nonrecurring income or losses, 4-26 opportunities for accounting pension expense, 19-16–19-17 net method, 7-12 nontrade receivables, 7-4, 7-10 profession, 1-19–1-25 pension obligation, 19-10 net realizable value (NVR), 2-26, normal business practices, 6-8 opportunity costs, 16-4 pension plan, 3-5, 19-5 7-15, 8-30–8-35, 8-35–8-36 normal production capacity, 8-18 options, 16-4, 16-10–16-14, 16-18, analysis, 19-34 net working capital, 5-18 normal selling terms, 6-7–6-8 17-15–17-19 contributory plans, 19-6 neutrality, 2-8, 2-32, 11-8, 21-25 normal shortages, 8-50 options pricing model, 16-33, 16-37, current service cost, 19-7, 19-17, news releases, 23-4 normalized cash flow, 17-5 16-54–16-55 19-36–19-37 nominal rate, 14-9 normalized earnings, 12-38, 17-5 ordinary activities, 2-15, 4-21 defined benefit obligation, 19-10, non-accumulating compensated Norwalk Agreement, 1-16 ordinary annuity, 20-33 19-37–19-38 absences, 13-21 not-for-profit corporations, 15-3 ordinary enterprise operations, 5-19 defined benefit plan. See defined non-cancellable purchase contracts, not-sufficient-funds (NSF) cheques, ordinary repairs, 10-33 benefit plan 8-10 7-45 ordinary revenue-generating defined contribution plan, non-consolidated entities, 14-27 note disclosures, 1-4, 14-28 activities, 2-15 19-7–19-8, 19-35 non-contingent obligations, 13-49 notes issued for property, goods, ordinary trade accounts, 5-12 disclosure, 19-28–19-34, 19-35 non-contributory plans, 19-6 and services, 14-18–14-19 organization costs, 12-11 funded, 19-6 non-counterbalancing errors, 21-30, notes payable, 13-9, 14-4 original oil in place, 11-14 IFRS-ASPE comparison, 21-32–21-33 see also bonds originating difference, 18-8 19-34–19-35 non-current investments, 5-15 notes receivable, 5-7, 7-10 other assets, 5-17–5-18 illustration of pension non-current liabilities, 13-8 face value, 7-23–7-24 other comprehensive income (OCI), accounting, 19-18–19-25 non-equity investments, 22-5 fair value, 7-23 2-16, 4-12–4-14 importance, from business non-financial derivatives, 16-8–16-10 interest-bearing notes, 7-21, accumulated other perspective, 19-4–19-6 non-financial liabilities 7-27–7-29 comprehensive income, C-20 measurement, 19-35 commitments, 13-40, 13-41–13-42 long-term notes receivable, IFRS-ASPE comparison, 4-38, 9-46 non-contributory plans, 19-6 contingencies, 13-34–13-38, 7-22–7-30 unrealized holding gain or loss, C-9 one-person plan, example, 13-41–13-42 non–interest-bearing notes, other price risk, 16-6 19-36–19-39 customer loyalty programs, 7-21–7-22 outcome uncertainty, 2-23 overview, 19-4–19-6 13-30–13-31 received for property, goods, or output measures, 6-50 past service costs, 19-8, 19-38–19-39 decommissioning obligations, services, 7-29–7-30 outstanding cheques, 7-45 pension accounting, 19-5 13-22–13-26 short-term notes receivable, over-the-counter markets, 16-3 pension solvency deficit, 19-1 financial guarantees, 13-38–13-40, 7-21–7-22 overfunded, 19-16 pension work sheet, 19-18–19-25 13-41–13-42 transaction costs, 7-23 overhead, 10-7 presentation, 19-28 IFRS-ASPE comparison, 13-47 zero-interest-bearing notes, 7-21, oversight in capital marketplace, public sector organizations, 19-1 measurement, 13-7, 13-47 7-24–7-27 1-19–1-20 types of pension plans, 19-7–19-9 premiums, 13-31–13-33 notes to financial statements, own equity instruments, 16-18–16-20, vesting, 19-8 product guarantees, 13-26–13-30 2-29–2-30, 4-36, 5-25, 23-7 16-37 pensions. See pension plan rebates, 13-31–13-33 present value–based accounting Owners’ Drawings account, C-20 percentage markup, 8-42 recognition, 13-6 measurements, 3-5 owners’ equity, 5-20–5-21, C-20, C-21 percentage-of-completion method, restoration obligations, 13-22–13-26 number of years method, 12-42 ownership 6-48, 6-49–6-54, 18-6 uncertain commitments, leases and, 20-13 percentage-of-receivables 13-34–13-38 O ownership interest, 2-15 approach, 7-15 understanding, 13-3–13-4 objective of financial reporting, ownership structure, C-19–C-20 percentage-of-sales approach, 7-17 unearned revenue, 13-33–13-34 1-7–1-9, 2-4, 2-5, 2-31–2-32 risk of, 6-36 performance vs. financial liabilities, 13-6–13-7 obsolescence, 11-7, 11-20, 20-6, C-11 share ownership, 15-6 business models, 4-3–4-7 non-GAAP earnings, 4-36 OECD countries, 18-3–18-4 substantive change in, 23-20 communication of information non-GAAP measures, 4-36–4-37 off–balance sheet, 5-6 transfer of ownership test, 20-13 about performance, 4-7 non–interest-bearing investment, off–balance sheet accounts, 19-18 industries, 4-3–4-7 9-11, 9-17 off–balance sheet financing, P quality of earnings/information, non–interest-bearing notes, 14-26–14-27, 20-4, 20-6–20-7, P/E ratio. See price earnings ratio 4-7–4-12 7-21–7-22 20-9 paid-in capital, 15-23 performance obligations, 2-21, 6-16, non-market interest rates oil and gas properties, 10-22, paid-in capital in excess of par, 15-31 20-52 marketable securities, 14-16–14-17 10-36–10-37 par value, 14-9 allocation of transaction price, non-marketable instruments, on margin, 9-8 par value shares, 15-8, 15-31 6-28–6-31 14-17–14-18 one-line consolidation, 9-37 parent corporation, 9-38 identification of, 6-16–6-20 non-marketable instruments, one-person pension plan, 19-36–19-39 parenthetical explanations, multiple performance obligations, 14-17–14-18 onerous contract, 8-10, 13-30 5-24–5-25 6-17, 6-29–6-31 non-operating transactions, 4-25 online coupons, 13-31 parking transactions, 8-9 remaining performance non-reciprocal transfers, 10-18 Ontario Securities Commission partial periods, and depreciation, obligations, 6-46 non-substantial modification of (OSC), 1-12, 1-17, 4-36–4-37 11-16–11-17 satisfaction of, 6-32–6-35 terms, 14-24–14-26 operating activities, 4-4, 5-27, partial retrospective application, single performance obligation, 6-17 non–tax-deductible expenses, 18-8 5-31–5-33, 5-34, 13-42, 22-4, 21-13, 21-24 performance-type plans, 16-30, non-taxable revenue, 18-8 22-5, 22-6, 22-36–22-37 participating shares, 15-7 16-53–16-54 noncash consideration, 6-27 operating cycle, 13-8 partnership, 2-19, 15-3, C-20, C-21 period costs, 2-25, 8-19 noncontrolling interest, 9-39 operating expenses, 4-42–4-43, 5-16 past events, 2-12, 2-13, 2-14 periodic inventory system, 8-21, nonmonetary, non-reciprocal operating income, 4-7, 4-12 past service costs, 19-8, 19-13, 8-28, 8-33–8-34, C-22 transactions, 2-26 operating items, 4-12 19-17, 19-21–19-22, 19-35, periodic payment, 3-26–3-27 nonmonetary assets, 5-7–5-8, operating leases, 14-27, 20-8, 19-38–19-39 periodicity assumption, 2-25, 23-23 10-14, 12-7 20-30–20-35, 20-37–20-38, patent, 12-19–12-20 peripheral activities, 4-21 nonmonetary exchanges, 10-10–10-19 20-48–20-49, 20-53 Patent Office, 12-19 peripheral transactions, 2-15, 2-16 nonmonetary liabilities, 5-7–5-8 operating risk, 5-40 payee, 7-21 permanent account, C-3 BMIndexes.indd Page 19 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-19
permanent differences, 18-6–18-8, 18-8 unearned revenues, C-9, C-10, ordinary vs. peripheral activities, product costs, 2-22, 8-18–8-20 permits, 12-19 C-12–C-13 4-21 product guarantees, 13-26–13-30 perpetual bonds or notes, 14-4 present obligations, 5-8 own equity instruments, 16-37 see also warranties perpetual franchise, 12-19 present value, 3-13–3-27 pension plan, 19-28 product market risks, 5-40 perpetual inventory system, 8-21, calculation methods, 3-16–3-25 percentage-of-completion professional corporations, 2-19 8-26, 8-28, 8-34, C-22 compound interest, 3-15–3-16 method, 6-52–6-53 professional judgement, 1-19, 2-31, petty cash, 7-6–7-7, 7-9, 7-43–7-44 of consideration, 10-11 property, plant, and equipment, 5-6, 5-23–5-24, 6-46, 15-21 physical count, C-22 exchange price, 10-11 11-30–11-32 profit margin on sales, 5-41, 23-31 physical factors, 11-7 expected present value purchase commitments, 16-36 profit margin ratio, 11-34 physical life, 11-7 technique, 3-6 receivables, 7-37–7-39 profit margins, 4-26, 4-28 plain vanilla debt, 16-21 financial assets, 7-14 retained earnings, 15-24 profit-sharing plan, 13-22 plan assets, 19-10, 19-14–19-16 financial calculators, 3-19–3-20, retrospective application, profitability, 15-26 plant assets, 10-4 3-23 21-13, 21-27 profitability ratios, 5-40, 5-41, see also property, plant, and fundamental variables, 3-14–3-16 revenues and revenue 23-31–23-32 equipment interest, nature of, 3-13–3-14 recognition, 6-42–6-46 profitable contracts, 6-57–6-58 point of delivery, 6-36 interest rate calculation, shareholders’ equity, 15-22–15-24 profits, 1-20, 18-5 political costs, 21-25 3-25–3-26 single-step income statements, 4-24 projected benefit method, 19-10 political environment, standard interest rates and time periods, statement of cash flows, 5-29–5-33, projected unit credit, 19-10 setting in, 1-21–1-22 3-24 22-32–22-35, 22-39 promise, 6-9 possession, 2-13, 6-4, 6-9, 6-37 notes, 7-23, 7-25 statement of changes in equity, promissory note, 7-20, 7-22 post-closing trial balance, C-3, C-22 pension plan benefits, 19-11, 4-34–4-35 see also loans receivable; notes post-employment benefit plans, 19-11n statement of financial position receivable 19-26–19-27, 19-34–19-35 periodic payment, calculation of, (balance sheet), 5-9–5-10, prompt settlement discounts, 6-24 see also pension plan 3-26–3-27 5-10–5-22 pronouncements, 1-18 post-retirement benefits, 3-5 present value formula, 3-17–3-18, statement of income/ property, notes issued for, 14-18–14-19 postage on hand, 7-9 3-21–3.22 comprehensive income, property, plant, and equipment, postdated cheques, 7-6, 7-9 present value tables, 3-18–3.19, 4-21–4-32 5-15–5-16, 10-5 posting, C-3, C-7 3-22–3.23 statement of retained earnings, additions, 10-29, 10-30 potential common/ordinary series of future cash flows 4-32–4-34 analysis, 11-32–11-35 share, 17-6 (annuities), 3-20–3-22 upside-down presentation, asset exchanges, 10-14–10-18 pre-emptive right, 15-5 simple interest, 3-15 13-40–13-41 assets classified as, 10-5 predictive analytics, 13-27 single future amount, 3-16–3-20 price biological assets, 10-22 predictive value, 2-6, 2-27, 4-7, 4-9, spreadsheets, 3-20, 3-23–3-24 cash price equivalent, 10-11 borrowing costs, 10-8–10-9 4-12, 4-26 tables, A-2, A-4, A-5 exchange price, 7-12, 10-11 buildings, 10-20 preferred creditors, 23-26 value in use, 3-7–3-8 exercise price, 16-10, 17-15 business perspective, 10-4 preferred dividends in arrears, 13-13 present value–based accounting lump-sum price, 10-12 cash discounts not taken, 10-10 preferred shares, 7-8, 15-6–15-7, 15-31 measurements, 3-5 other price risk, 16-6 characteristics, 10-4–10-6 callable/redeemable shares, 15-7 present value factor, 7-25 reacquisition price, 14-20 contributed assets, 10-18–10-19 as component of shareholders’ presentation, 2-29–2-31 selling price of asset, 20-43 cost elements, 10-6–10-10 equity, 15-22 accounting changes, 21-27 stand-alone selling price, 6-28 cost model (CM), 10-23–10-24 convertible shares, 15-7 accumulated other strike price, 16-10 costs associated with specific cumulative shares, 15-6–15-7 comprehensive income, 15-25 transaction price, 6-21–6-28, assets, 10-19–10-22 dividends payable on term basic presentation requirements, 6-28–6-31 costs incurred after acquisition, preferred shares, 22-29 4-21–4-22 price earnings ratio, 4-38, 5-41, 10-29–10-34 features of, 15-6–15-7 certain puttable shares, 16-37 15-27, 23-32 deferred payment terms, high/low preferred shares, commitments, 13-41–13-42 price index, 20-16 10-11–10-12 16-23–16-24 contingencies, 13-41–13-42 price-level change, 2-25 depreciation. See depreciation participating shares, 15-7 contract assets, 6-42–6-44 price risk, 6-7 disclosure, 11-30–11-32 percentage of issue price, 15-6 contributed surplus, 15-24 primary financial instruments, 16-3 dismantling and restoration costs, redeemable shares, 15-7, current liabilities, 13-40–13-41 primary forms of business 10-9–10-10 16-23, 16-38 defined benefit plan, 19-28 organization, 15-3 disposal. See disposition retractable shares, 15-7 discontinued operations, 4-16–4-20 primary sources of GAAP, 1-18, economic benefits, 11-3 term preferred shares, 22-29, 22-46 of earnings, 4-9 2-16, 8-37, 21-4–21-5, 21-6 efficiency of asset use, 11-33–11-35 premium, 7-29, 13-31–13-33, earnings per share (EPS), 17-3–17-5 principal-agent relationship, equipment, 10-21 14-9–14-10, 14-14–14-15 equity, 15-30 6-39–6-40, 6-42 expenditures, major types of, prepaid expenses, 5-15, 12-7, C-9 equity-settled CSOP for private principal amount, 14-9 10-29–10-34 adjusting entries, C-10–C-13 entities, 16-38 principal-at-risk variable-rate fair value model (FVM), 10-23, analysis of, using work sheet, 22-44 error correction, 21-36–21-38 notes, 14-5 10-27–10-28, 10-32 depreciation/amortization, expenses, 4-28–4-30 principal market, 3-10–3-11 fair value standard, 10-14–10-15 C-11–C-12 financial guarantees, 13-41–13-42 principles-based approach, 1-23, 2-32 government grants, 10-18–10-19 direct and indirect method, 22-27 goodwill, 12-30–12-33 principles vs. rules, 1-22–1-23 IFRS-ASPE comparison, expiration of, C-10 hybrid/compound instruments, printed coupons, 13-31 10-34–10-37 indirect method, 22-18 16-21–16-25 prior period errors, 21-4, 21-7–21-8 impairment. See impairment insurance, C-11 income taxes, 18-35–18-39, 18-44, private companies, 1-14, 15-4, 16-35 inspections, 10-29, 10-30–10-32 vs. unearned revenues, C-12–C-13 18-49–18-50, 18-53–18-54 private entity GAAP. See investment property, 10-21 prepayments, C-9 intangible assets, 12-30–12-33 Accounting Standards for leasehold improvements, 10-20 adjusting entries, C-10–C-13 inventories, 8-43–8-44 Private Enterprises (ASPE) lump-sum purchases, 10-12–10-13 alternative method for adjusting, investments, 9-39–9-43 private placement, 14-3, 15-7 major overhauls, 10-29, 10-30–10-32 C-13–C-14 issues, 5-37 private sector corporation, 15-3–15-4 measurement after acquisition, as current assets, 5-15 leases, 20-32–20-33 pro forma numbers, 11-12 10-23–10-28 intangible assets, 12-7–12-9 long-term debt, 14-28 probable, 13-36, 18-28–18-29 natural resource properties, prepaid expenses, 12-7–12-9, C-9, multiple-step income statement, producers, as derivative users, 10-21–10-22 C-10–C-13 4-24–4-27 16-7–16-8 net basis, 5-32 BMIndexes.indd Page 20 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-20 Subject Index
property, plant, and equipment understandability, 2-10–2-11 times interest earned ratio, 14-31, estimated uncollectible (continued) verifiability, 2-10 23-32 receivables, C-17 nonmonetary exchanges, quality of earnings, 4-7–4-12, 5-4 working capital ratio, 13-43 goodwill, 12-24–12-27 10-10–10-19 quantitative data, 2-25 rational entity impairment model, hedge accounting, 16-38 nonmonetary transactions, quantitative factors, 2-7 12-21–12-22 hybrid/compound instruments 10-14–10-18 quantities only system, 8-23 rational entity model, 11-21, with contingent settlement presentation, 11-30–11-32 Quebec Pension Plan (QPP), 13-18 11-22–11-25 provisions, 16-37 rearrangement and reinstallation quick ratio, 5-5, 5-41, 13-43, 23-31 ratios. See ratio analysis immediate recognition approach, costs, 10-29, 10-33 raw materials inventory, 8-5 19-17 recognition principle, 10-5–10-6 R reacquisition of shares, 15-13–15-15 impairment, 11-21–11-25 repairs, 10-29, 10-33–10-34 radio-frequency identification reacquisition price, 14-20 income taxes, 18-44 replacement of assets, 11-32–11-33 (RFID), 8-1 real estate income or investment intangible assets, 12-6–12-16 replacements, 10-29, 10-30–10-32 rate of gross profit/rate of gross trusts (REITs), 15-4 inventory, physical goods return on investment, 11-33–11-35 margin, 8-42 real estate leases, 20-51, 20-55 included in, 8-7–8-13 revaluation adjustment, 4-22, rate of markup, 8-42 real-time financial information, 2-25 liabilities, 5-23 10-25–10-26 rate of return on assets (ROA), 5-41, realizable (revenue), 2-21 long-term debt, 14-20–14-27 revaluation model (RM), 10-23, 11-34, 23-32 realized (gains and losses), long-term loans receivable, 10-24–10-27, 10-32 rate of return on common 9-8, 18-6 7-22–7-30 sale of, 11-28–11-29 shareholders’ equity, 5-41, realized (revenue), 2-21 long-term notes receivable, self-constructed assets, 10-7–10-8 15-26–15-27, 23-32 rearrangement and reinstallation 7-22–7-30 share-based payments, 10-13 ratio analysis, 4-37–4-38, 5-40, costs, 10-29, 10-33 matching principle, 2-21–2-22 vs. inventory, 10-5 23-30–23-32 reasonable knowledge, 2-10 and measurement, 2-23–2-29 property dividend, 15-17 acid test ratio, 5-5, 5-41, 13-43, rebate coupon, 13-31 non-financial liabilities, 13-6 property rights approach, 20-8 23-31 rebates, 6-21, 8-17–8-18, 13-31–13-33 property, plant, and equipment, see also right-of-use approach activity ratios, 5-5, 5-40, 5-41, 23-31 recapture, 11-40 10-5–10-6 proportional method, 12-13, 16-25 asset turnover, 5-41, 23-31 receivables, 7-9–7-11 realized and realizable, 2-21 proprietary perspective, 1-7 average days to sell inventory, 8-45 see also accounts receivable receivables, 7-11–7-14 proprietorship, 15-3 benchmarking, 5-41–5-42 analysis, 7-39–7-40 revenue recognition. See revenue prospective application, 21-9, book value per share, 5-41, as current asset, 5-12–5-13 recognition 21-21–21-24 15-28–15-29, 23-32 definition, 7-9–7-10 share-based compensation, prospectus, 23-4 business risks, 5-39–5-40 derecognition, 7-30–7-37 16-32–16-36 provincial sales tax, 13-14 calculation of, 13-44 disclosure, 7-36–7-37, 7-37–7-39 shares, 15-10–15-15 provincial securities commissions, cash debt coverage ratio, 5-35, estimated uncollectible short-term loans receivable, 1-12, 1-17 5-41, 23-31 receivables, C-17 7-21–7-22 provision matrix, 7-15 cost-to-retail ratio, 8-47 factoring receivables, 7-31 short-term notes receivable, provisions, 5-19, 5-23, 13-4 coverage ratios, 5-5, 5-40, 5-41, IFRS-ASPE comparison, 7-41 7-21–7-22 prudence, 2-1 23-31, 23-32 loans receivable. See loans when to recognize an item, C-5 public companies, 1-14, 15-4, 17-1, current cash debt coverage ratio, receivable reconciliation of bank balances, 23-3, 23-6 5-5, 5-35, 5-41, 23-31 measurement, 7-11–7-14 7-45–7-47 Public Company Accounting current ratio, 5-5, 5-9, 5-41, 8-14, nontrade receivables, 7-4, 7-10 recording process Oversight Board (PCAOB), 1-19 8-15, 13-42–13-43, 23-31 notes receivable. See notes adjusting entries, C-8–C-19 Public Sector Accounting days payable outstanding, 13-43 receivable closing process, C-20–C-23 Handbook, 10-4 debt to equity ratios, 5-9 presentation, 7-37–7-39 identification of transactions and public sector corporations, 15-3 debt to total assets, 5-41 recognition, 7-11–7-14 other events, C-5 publicly accountable entity, 22-21 debt to total assets ratio, with recourse, 7-35–7-36 journalizing, C-5–C-6 purchase allowances, 8-50 14-31, 23-32 reporting, 7-11 posting, C-7 purchase commitments, 8-10–8-11, earnings per share (EPS). See sale of receivables, 7-31–7-36 recording transactions and other 16-9–16-10, 16-36, 16-44 earnings per share (EPS) sale without recourse, 7-35 events, C-5 purchase discounts, 8-50 inventory turnover ratio, 5-41, secured borrowings, 7-31 reversing entries, C-22–C-23 purchase options, 20-10, 20-24–20-30, 8-45, 23-31 securitization of, 22-38 trial balance, C-8 20-44–20-48 limitations, 23-34–23-35 trade receivables, 7-4, 7-10 recoverability test, 11-21, 11-22, 12-23 purchase returns, 8-50 liquidity ratios, 5-5, 5-6, 5-40, receivables management, 7-5 recoverable amount, 11-22 purchased options, 16-11, 17-16 5-41, 23-31 receivables turnover ratio, 5-41, recoverable reserves, 11-14–11-15 purchasers of receivables, 7-31 long-term debt, 14-30–14-31 7-39–7-40, 23-31 recycled items, 4-12–4-13 put option, 16-11, 17-15, 17-16 major types of ratios, 5-40 receivership, 23-25–23-26 recycling, 9-21 misclassification, effect of, 5-37 reciprocal exchange, 2-26 redeemable shares, 15-7, 16-23, 16-38 Q payout ratio, 5-41, 15-27, 23-32 reciprocal transaction, 6-5–6-7 redemption, 15-6 quadrophobia, 4-10 price earnings ratio, 4-38, 5-41, reclassification adjustment, 9-22 refinancing, 13-12 qualified opinion, 23-28–23-29 15-27, 23-32 reclassified items, 4-13 refund liability, 7-13 qualifying assets, 10-37, 10-38–10-39 profit margin on sales, 5-41, 23-31 recognition, 2-17–2-22 refunding, 14-21 qualitative characteristics, profit margin ratio, 11-34 accounts receivable, 7-11–7-14 registered bonds, 14-4 2-6–2-12, 4-8 profitability ratios, 5-40, 5-41, cash, 7-6–7-9 regular activities, 4-26 comparability, 2-10 23-31–23-32 cash-settled and other stock regular-way purchase or sale, 9-8 cost-benefit relationship, 2-11 quick ratio, 5-5, 5-41, 13-43, 23-31 compensation plans, 16-38 reinstallation, 10-29, 10-33 elements of financial statements, 2-4 rate of return on assets, 5-41 control, 2-18–2-21 related-party transactions, 2-26, enhancing qualitative rate of return on assets (ROA), decommissioning and restoration 5-12, 23-18–23-22, 23-36 characteristics, 2-10–2-11 5-41, 11-34, 23-32 obligations, 13-24–13-26 relative fair value, 6-48 fundamental, 2-6–2-9 rate of return on common deferred tax assets, 18-43 relative fair value method, relevance, 2-6–2-7, 2-11 shareholders’ equity, 5-41, defined benefit plan, 19-35 15-13, 16-25 representational faithfulness, 2-6, 15-26–15-27, 23-32 dividends, 15-16–15-21 relative sales value method, 8-20 2-8–2-9, 2-11 receivables turnover ratio, economic entity assumption, relevance, 2-6–2-7, 2-11, 2-18, 4-21 timeliness, 2-10 7-39–7-40, 23-31 2-18–2-21 remoteness, 13-36 trade-offs, 2-11–2-12 solvency ratios, 5-6, 23-31 equity, accounting for, 15-29 rental real estate, 10-21 BMIndexes.indd Page 21 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-21
rents payable, 13-13–13-14 affecting one prior period, and operations, 4-7 of receivables, 7-31–7-36 repairs, 10-29, 10-33–10-34 21-15–21-16 presentation, 6-42–6-45 regular-way purchase or sale, 9-8 replacement cost, 8-30–8-31 return on investment, 9-5, realizable (revenue), 2-21 of services, 6-37 replacements, 10-29, 10-30–10-32, 11-33–11-35 realized (revenue), 2-21 sale-leaseback transactions, 20-51, 11-32–11-33 return on plan assets, 19-14, 19-15 recognition. See revenue 20-52–20-55 reportable segment, 23-10 return policy, 6-7 recognition sales discounts, 7-12, 8-50 reported profit (loss) test, 23-11 returnable cash deposits, 13-14 reconciliation of contract sales returns and allowances, reporting entity, 2-20 returnable items, 7-10 balances, 6-46 7-12–7-13, 8-50 representational faithfulness, 2-6, revaluation adjustment, 15-33 remaining performance sales revenues, 7-12–7-13 2-8–2-9, 2-11, 2-18, 4-4, 10-23 revaluation adjustment on property, obligations, 6-46 sales tax, 13-14 repurchase agreements, 6-38–6-39, plant, and equipment, 4-22, sales revenues, 7-12 sales transaction 6-42, 8-9–8-10 10-25–10-26 in single-step income statements, business perspective, 6-4 research, 12-9–12-10 revaluation model (RM), 10-23, 4-24 concessionary terms, 6-7–6-8 research phase, 12-9–12-10 10-24–10-27, 10-32, 10-42–10-43, taxation of, 18-6–18-7 constructive obligation, 6-9–6-10 research studies, 1-18 11-20, 12-13–12-14 unearned revenues, 13-33–13-34, contract law, 6-9 reserves, 4-10 Revaluation Surplus account, 10-24, C-9, C-12–C-13 economics of, 6-4–6-8 residual approach, 6-29 10-26–10-27 vs. gains, 4-21 fundamentals of understanding residual interest, 2-15, 5-8 revenue account, C-3 reverse splits, 17-8–17-10 sales transactions, 6-4–6-5 residual value, 11-6, 11-11, 20-6, revenue approach, 13-27, 13-30, 13-33 reverse treasury stock method, information for decision-making, 20-14, 20-16, 20-24–20-30, revenue bonds, 14-4 17-18–17-19 6-10 20-44–20-48 revenue constraint, 6-25 reversible differences, 18-6–18-8 legalities of, 6-9–6-10 residual value method, 6-48, 15-13, revenue expenditure, 10-29 reversing entries, C-3, C-22–C-23 reciprocal nature, 6-5–6-7 16-25, 16-28 revenue recognition revolving debt, 13-8 revenue recognition. See revenue resources approaches to, 2-10–2-13 rewards of ownership, 6-36 recognition allocation of, 1-4, 2-5, 2-10 asset-liability approach, 6-10–6-13 right of return, 6-22–6-23, 6-48 sales-type lease, 20-38, 20-43–20-44, economic resources, 2-15, 5-8 bill-and-hold arrangement, right-of-use approach, 20-8, 20-9 20-46–20-47 efficient use of resources, 1-4 6-39, 6-42 right-of-use asset, 20-15–20-17 salvage value, 11-6 evaluations of alternatives, 2-10 consignments, 6-40–6-41, 6-42 right-of-use leases, 20-34 Sarbanes-Oxley Act (SOX), 1-19–1-20 successful use of, 4-26 disclosure, 6-45–6-46 risk, 4-4 SARs. See share appreciation rights transfer of, 1-5 earnings approach, 6-10–6-11, of bankruptcy, 5-5 plans (SARs) restatement. See retrospective 6-35–6-38 business model, and various seasonality, and interim reporting, restatement five-step revenue recognition related risks, 5-39 23-16 restoration costs, 10-9–10-10 process, 6-10–6-35 business risks, 5-39–5-40 secured borrowings, 7-31, 7-33 restoration obligations, 13-22–13-26, gross basis, 6-40 capital market risks, 5-40 secured creditors, 23-26 13-46 IFRS-ASPE comparison, 6-47–6-48 credit risk, 6-6, 7-1, 7-14, 7-23, secured debt, 14-4 restricted cash, 7-7 key concepts, 6-11 16-6, 16-7, 16-14–16-15 Securities Act, 1-20 restrictions, 5-19 licensing type arrangements, 6-34 currency risk, 16-6, 16-7, 16-14, Securities and Exchange restrictive covenants, 14-3 long-term contracts, 6-49–6-54 16-40, 16-41 Commission (SEC), 1-12, 1-16, retail inventory method, 8-47–8-51 misrepresentation in financial exchange rate risk, 16-39 1-19, 2-33 evaluation of, 8-51 statements, 6-10 financial risks, 5-40, 9-41, 16-6 securitization, 1-7, 7-1, 7-32, 7-40, special items, 8-50–8-51 net basis, 6-40 foreign currency risk, 16-40 14-27 terminology, 8-48–8-50 presentation, 6-42–6-45 hedging, 16-6 securitization of receivables, 22-38 retained earnings, 5-20, 15-22, 15-24, principal-agent relationship, inputs to income models, 3-5 segmented (disaggregated) financial 22-15, 22-20, 22-30, 22-47 6-39–6-40, 6-42 interest rate risk, 16-6, 16-7, 16-39 information, 23-7 Retained Earnings account, repurchase agreements, liquidity risk, 5-6, 16-6, 16-7, see also segmented reporting C-20, C-21 6-38–6-39, 6-42 16-14–16-15, 16-39 segmented reporting, 23-7–23-13, retirement revenue recognition principle, market risk, 16-6, 16-7–16-8, 23-35 of convertible debt, 16-29 2-21, C-9 16-12, 16-16 basic principles, 23-10 of shares, 15-13–15-15 right of return, 6-22–6-23 operating risk, 5-40 general information, 23-12 retractable shares, 15-7 satisfying performance obligation other price risk, 16-6 geographic areas, 23-13 retroactive application, 21-8 over time, 6-33 of ownership, 6-36 major customers, 23-13 see also retrospective application situations, 6-16 price risk, 6-7 measurement principles, retrospective application, 21-8, substantially the same goods and product market risks, 5-40 23-11–23-12 21-10, 21-24 services, 6-20 and rewards, 16-6 objectives of, 23-9 accounting entry to recognize upfront fees, 6-19–6-20 risks and rewards, 2-21 operating segments, identification change, 21-11–21-12 warranties, 6-18–6-19 solvency risk, 14-30 of, 23-10–23-11 financial statement presentation, revenue recognition principle, 2-21, risk-free discount rate, 3-6 products and services, 23-13 21-13 6-38, C-9 risk management, 4-4, 16-4–16-8 reconciliations, 23-12 with full restatement of revenue test, 23-11 risk profile, 6-6–6-7, 14-4 related information, 23-12 comparative information, revenues, 2-15 risk/return trade-off, 4-4 reportable segment, 23-10 21-10–21-14 accrued revenues, C-9, C-14–C-15 ROA. See rate of return on assets segment assets and liabilities, full retrospective application, basic revenue transaction, 6-15 (ROA) 23-12 21-10–21-14, 21-24 biased revenue numbers, 6-10 royalties payable, 13-13–13-14 segment profit and loss, 23-12 impracticability, 21-13–21-14 calculation of, 4-41–4-42 royalty relief approach, 12-17 segment revenues, 23-12 partial retrospective application, collectible revenues, 2-21 rules-based approach, 1-22 segmented and enterprise-wide 21-13, 21-24 contract assets and liabilities, disclosures, 23-12–23-13 presentation, 21-27 6-42–6-44 S selective disclosure, 23-4 retrospective restatement, from contracts with customers, 2-21 salaries, 22-19 self-constructed assets, 10-7–10-8 21-14–21-21 costs to obtain and/or fulfill a sale self-interest, 1-6 retrospective restatement, 4-33, contract, 6-44–6-45, 6-46 of goods, 6-36–6-37 selling expenses, 8-19 4-34, 21-10, 21-14–21-21 disaggregation of revenue, 6-46 see also sales transaction selling price of asset, 20-43 affecting multiple prior periods, measurement, 6-10–6-11 property, plant, and equipment, selling transactions. See sales 21-17–21-19 non-taxable revenue, 18-8 11-28–11-29 transaction BMIndexes.indd Page 22 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-22 Subject Index
sensitive numbers on financial classes, 15-5 stand-ready obligations, 13-27 statement of changes in shareholders’ statements, 2-7 common shares. See common standard cost system, 8-19 equity, C-3, C-28 sensitivity analysis, 22-38 shares standard setting see also statement of changes in separate legal entity, 15-3 contingently issuable shares, 17-6, Accounting Standards Board equity serial bonds or notes, 14-4 17-10, 17-19 (AcSB), 1-13–1-14 statement of comprehensive service contracts, 6-4 conversion of shares, 15-13–15-15 challenge for, 1-23 income, 4-3, 22-22, C-3 service life. See useful life issuance of shares, 14-7, and conceptual framework, 2-3 see also income statement service period, 16-33 15-10–15-13 Financial Accounting Standards preparation from work sheet, service-type warranty, 6-18–6-19, par value shares, 15-8, 15-31 Board (FASB), 1-16 C-27–C-28 13-27–13-28, 13-29–13-30 potential common/ordinary funding, 1-22 unrealized holding gain or loss, services, 6-4 share, 17-6 International Accounting C-18–C-19 additional services, 6-7 pre-emptive right, 15-5 Standards Board (IASB), statement of financial position distinct services, 6-16 preferred shares, 15-6–15-7, 15-22, 1-14–1-15 (balance sheet), 1-3, notes issued for, 14-18–14-19 15-31, 16-23–16-24 need for standards, 1-12 5-4–5-5, C-3 ongoing services, 6-7 reacquisition of shares, 15-13–15-15 parties involved in standard accounting policies, 5-23 performance of service, 6-37 redeemable shares, 16-23 setting, 1-12–1-17 additional detail, 5-24 sale of services, 6-37 retirement of shares, 15-13–15-15 in political environment, 1-21–1-22 analysis of, 5-4 substantially the same, 6-20 subscribed shares, 15-11–15-12 provincial securities commissions, assets, 5-8, 18-6–18-7 virtual services, 6-1 treasury shares, 15-14, 15-31–15-32 1-17 call option, 16-13 vs. sales of goods, 6-1 types of shares, 15-5–15-7 Securities and Exchange cash, 5-11–5-12 servicing asset component, 7-36 weighted average common/ Commission (SEC), 1-16 classification, 5-7–5-10 servicing liability component, 7-36 ordinary shares, 17-8–17-10 standard-setting organizations, 1-12 classified statement of financial settlement date, 16-45 short-term compensated absences, Standards Interpretation position, 5-9–5-10, 5-10–5-22 settlement of debt, 14-21–14-24 13-19–13-21 Committee (SIC), 1-18 comparative, 5-30, 22-11, settlement rate, 19-12 short-term debt, 13-41 stated interest rate, 7-23, 7-27, 7-29 22-21–22-22 share appreciation rights plans see also bank indebtedness stated rate, 14-9 contingencies, 5-22–5-23 (SARs), 16-30, 16-51–16-53 short-term financing, 5-18 statement of cash flows, 4-36, 5-27, contra items, 5-25–5-26 share-based compensation, short-term investments, 5-12, 7-6 22-4, C-3 contractual situations, 5-23–5-24 16-29–16-36 short-term leases, 20-30–20-35 analysis, 22-36–22-39 cross-references, 5-25–5-26 additional complications, short-term liabilities, 13-7 cash flow patterns, 5-35–5-36 current assets, 5-10–5-15 16-51–16-54 short-term liquidity ratios, 5-5 cash inflows and outflows, 5-28 current liabilities, 5-18 cash-settled plans, 16-38 short-term loans receivable, classification of cash flows, debt levels, and reporting bias, combination plans, 16-53 7-21–7-22 22-5–22-8 14-27 compensatory stock option plans short-term notes receivable, content, 5-26–5-29 deferred tax assets and liabilities, (CSOPs), 16-30–16-32, 7-21–7-22 direct method, 5-33, 22-9, 22-10, 18-36–18-37 16-32–16-35, 16-37, 16-38 short-term obligations expected to 22-12–22-15, 22-17, 22-21–22-32, disclosure techniques, 5-24–5-26 direct awards of stock, 16-30, 16-35 be refinanced, 13-12–13-13 22-47 economic obligation, existence disclosure, 16-35–16-36 short-term paper, 7-6, 7-9 disclosure, 22-32–22-33, 22-39 of, 13-5 employee stock option or short-term returns, 9-5 financial flexibility, 5-35 elements of, 5-8–5-10 purchase plans (ESOPs), sick pay, 13-20 financing activities, 5-27, errors, 21-29–21-34 16-30–16-32 significant influence, 9-32–9-33 5-31–5-33, 22-6, 22-19, financial assets, 5-12–5-13 measurement, 16-32–16-36 significant influence investments, 22-37–22-38 financial instruments, 5-7–5-10 performance-type plans, 16-30, 9-32, 9-47 format, 5-26–5-29, 22-8–22-9 format, 5-21–5-22 16-53–16-54 significant judgements, 6-46 free cash flow, 5-36–5-37 IFRS-ASPE comparison, 5-38 recognition, 16-32–16-36 significant non-cash transactions, IFRS-ASPE comparison, 5-38, 22-39 income taxes, 18-35–18-37 share appreciation rights plans 22-7 importance, 22-3–22-5 income taxes receivable or (SARs), 16-30, 16-51–16-53 simple capital structure, 17-5–17-6 indirect method, 5-32–5-33, 22-9, payable currently, 18-35–18-36 stock options, 16-30–16-32 simple financing instruments, 22-10, 22-15–22-21 intangible assets, 5-17 tandem plans, 16-53 16-20–16-21 interpretation, 22-36–22-38 inventories, 5-13–5-14 transparency, 16-30 simple interest, 3-15 investing activities, 5-27, 5-33, issued but unpaid-for shares, 15-11 types of plans, 16-30–16-32 single-step income statements, 4-24 22-5–22-6, 22-6, 22-19, 22-37 leases, 20-32 share-based payments, 10-13 sinking fund, 14-3 liquidity, 5-35 leaving out items of relevance, 5-6 share capital system, 15-5 site restoration obligation, manual steps, 22-11–22-12 liabilities, 5-8 share issuance, 14-7, 15-10–15-13 13-22–13-26 operating activities, 5-27, limitations, 5-6 authorized shares, 15-10 smoothing earnings, 21-25 5-31–5-33, 5-33, 22-5, 22-6, long-term investments, 5-15 basic share issue, 15-10–15-11 soft numbers, 2-10, 2-23, 4-8, 5-6 22-36–22-37 long-term liabilities, 5-18–5-20 costs of issuing shares, 15-13 sole proprietorship, 2-19, 15-3, perspectives, 5-35–5-37 monetary vs. nonmonetary assets defaulted subscription C-20, C-21 preparation of, 5-29–5-33, and liabilities, 5-7–5-8 accounts, 15-12 solvency, 1-12, 5-5, 5-9, 14-19, 14-30, 22-10–22-12 net defined benefit assets and issued but unpaid-for shares, 15-11 15-26, 22-4 presentation, 22-32–22-35, 22-39 liabilities, 19-28 offered for sale, 15-10 solvency ratios, 5-5, 5-6, 5-40, 23-31 purpose, 5-27, 22-3–22-5 non-current investments, 5-15 partial payment, 15-11 solvency risk, 14-30 and retrospective application, 21-13 notes to financial statements, 5-25 procedure, 15-10 SPE. See special purpose entity sensitivity analysis, 22-38 off–balance sheet, 5-6 shares issued with other securities (SPE) usefulness from business opening SFP, 21-7, 21-20 (lump-sum sales), 15-13 special journal, C-6 perspective, 5-3–5-4 other assets, 5-17–5-18 subscribed shares, 15-11–15-12 special purpose entity (SPE), 1-7, usefulness of, 5-34–5-37 other required disclosures, shared advertising, 6-27 2-21, 14-27, 15-4 uses, 22-3–22-5 5-22–5-24 shareholders, and limited liability, specific identification, 8-24–8-25 work sheet, 22-40–22-47 owners’ equity, 5-20–5-21 15-7–15-8 speculators, 16-8 statement of changes in equity, parenthetical explanations, shareholders’ equity, 5-20–5-21, spreadsheets, 3-20, 3-23–3-24 1-3, 4-32, 4-34–4-35, 21-13, 5-24–5-25 15-16, 15-22, 15-24–15-29 stable dollar, 2-25 21-20–21-21, 22-23 prepaid expenses, 5-15 shares stakeholders, 1-5–1-7 see also statement of retained preparation from work sheet, basic or inherent rights, 15-5 stand-alone selling price, 6-28–6-29 earnings C-27–C-30 BMIndexes.indd Page 23 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
Subject Index I-23
preparation of, 5-9–5-10, 5-10–5-22 associates, investments in, intraperiod tax allocation, sales transaction. See sales property, plant, and equipment, 9-32–9-38 4-30–4-31 transaction 5-15–5-16 equity method, 9-33–9-37, 9-38 payroll taxes, 23-14 shareholders’ equity, transactions provisions, 5-23 subsidiaries, investments in, sales tax, 13-14 affecting, 15-24–15-29 receivables, 5-12–5-13 9-38–9-39 taxes payable, 13-14–13-17 transaction costs, 7-23, 9-8 retrospective application, strategy value-added tax, 13-14 transaction price, 6-21–6-28, 6-28–6-31, 21-20–21-21 corporate strategy, 9-5 taxes payable, 13-14–13-17, 18-47, 6-48 short-term investments, 5-12 differentiation strategy, 4-7 18-51–18-52, 22-29 transfer of ownership test, 20-13 standard format, 5-8 low-cost/high-volume strategy, 4-6 Goods and Services Tax (GST), transfer value, 15-6 subsequent events, 5-24 strict cash basis, 4-39 13-14–13-16 transfers-in, 8-50 supporting schedule, 5-26 strike price, 16-10 income tax, 13-16–13-17 transitional provisions, 21-9 terminology, 5-26 structured entity, 7-32 indirect method, 22-19 transparency, 2-8 usefulness, 5-5–5-6 structured financings, 2-32 sales tax, 13-14 travel advances, 7-9 statement of income/comprehensive studies, 1-18 taxes payable method, 18-10, 18-39 treasury bills, 7-8 income (income statement), subjective values, 2-27 technology, impact of, 1-23–1-24 treasury shares, 15-14, 15-31–15-32 1-3, 4-5–4-6 subordination, 15-6 technology-based intangible assets, treasury stock, 5-20 see also income statement subprime mortgages, 1-7 12-19–12-21 treasury stock method, 17-17–17-18 basic presentation requirements, subscribed shares, 15-11–15-12 telecom companies, 7-1 trend analysis, 23-30, 23-34 4-21–4-22 subscriptions receivable, 15-11 temporary account, C-3 trial balance, C-3, C-8 combined statement of income/ subsequent events, 5-24, 23-22–23-24, temporary difference, 18-8, 18-12 trigger events, 9-26–9-27 comprehensive income, 23-36 temporary difference approach, triggering event, 14-5 4-22–4-24 subsidiary, 9-38–9-39, 20-36 18-10, 18-19, 18-43 troubled debt restructuring, condensed, 4-27–4-28 subsidiary ledger, C-3 temporary use of land during 14-21–14-26 continuing operations, 4-26–4-27 substance vs. form, 20-7 construction, 10-7 trust funds, 15-4 conversion of statement of cash substantial completion or 10-column work sheet, C-24 tuition fees, C-13 receipts and disbursements to performance, 6-36 term bonds or notes, 14-4 turnover ratio, 5-5 income statement, 4-4 substantially the same goods or terminal loss, 11-40–11-41 typical business activities, 4-21 detail, level of, 4-27 services, 6-20 textbooks, 1-18 discontinued operations, substantively enacted rate, 18-24 time period assumption. See U 4-14–4-20, 4-27 successful efforts method, 10-22 periodicity assumption uncertain commitments, 13-34–13-38, earnings per share, 4-31–4-32 sum-of-the-years’-digits method, time periods, 3-24 13-46, 13-47 expenses, 4-28–4-30 11-10 time value, 16-12, 16-55 uncertainty IFRS-ASPE comparison, 4-38–4-39 supplementary information, 2-30 time value concepts, 3-13, 7-21 acceptable level of uncertainty, 2-25 income tax section, 4-27 supplementary schedules, 4-27 see also present value existence uncertainty, 2-18, 2-23 intraperiod tax allocation, 4-30–4-31 supporting schedule, 5-26 time value of money, 3-5, 6-25–6-26, inputs to income models, 3-5 multiple-step income statement, surplus or deficit, 19-14–19-16 A-1–A-5 level of, 2-25 4-24–4-27 sustainable cash flow, 17-5 timeliness, 2-10 measurement uncertainty, 2-23, non-operating section, 4-27 swap contract, 16-45–16-46 times interest earned, 5-41 2-27, 4-36 operating section, 4-26 times interest earned ratio, 14-31, outcome uncertainty, 2-23 ordinary vs. peripheral T 23-32 uncollectible accounts, 7-14 activities, 4-21 tandem plans, 16-53 timing differences, 18-8 see also bad debts other comprehensive income, 4-27 tangible capital assets, 3-5, 10-4 Toronto Stock Exchange (TSX), uncollectible trade accounts as point estimates, 4-8 see also property, plant, and 1-2, 1-17 receivable, 7-14–7-16 presentation, 4-21–4-32 equipment total-earnings approach, 12-41–12-42 unconditional obligations, sections, 4-26–4-27 tax base, 18-11–18-12 trade accounts payable, 13-9 13-19, 13-49 single-step income statements, 4-24 tax base of a liability, 18-12 trade discounts, 7-12 unconditional right to receive statement of cash flows, tax base of an asset, 18-11 trade-in allowance, 10-15 consideration, 6-42 preparation of, 22-11 tax basis, 11-39, 18-11 trade name, 12-16 undepreciated capital cost (UCC), statement of income/earnings, 4-3 tax income, 18-15 trade notes payable, 13-9 11-38, 11-39 see also income statement; tax loss, 18-26–18-33 trade-offs, 2-11–2-12 underfunded, 19-15 statement of income/ tax rate considerations, 18-23–18-26 trade payables, 13-43 the underlying, 16-3, 16-10 comprehensive income tax rebates receivable, 7-10 trade receivables, 7-4, 7-10 understandability, 2-10–2-11 (income statement) tax value, 11-39 trademark, 12-16 unearned revenues, 13-33–13-34, statement of retained earnings, 1-3, taxable income, 13-16–13-17, trading, 9-5 C-9, C-10 4-32–4-34, C-3 18-5–18-9, 18-47, 18-51–18-52 trading on the equity, 15-27 adjusting entries, C-12–C-13 see also statement of changes in taxable profit, 18-5 traditional discounted cash flow vs. prepaid expenses, C-12–C-13 equity taxable temporary difference, 18-12, approach, 3-6 unguaranteed residual value, 20-14, Statements of Financial Accounting 18-13, 18-24 traditional financial institutions, 20-24, 20-26–20-29, 20-46, Concepts, 2-4 taxation 20-36 20-47 stewardship, 1-11, 2-5 capital cost allowance. See capital transaction, C-3 unincorporated businesses, stock compensation plans. See cost allowance (CCA); capital see also event 23-24–23-25, 23-36 share-based compensation cost allowance method analysis of, C-5 unit of accountability, 2-18 stock dividend, 15-17–15-18, 15-21, capital gain, 11-40 arm’s-length transaction, 2-27, 6-5 unit of measure, 10-5–10-6 17-8–17-10 deferred income tax assets, 5-18 barter transactions, 2-26, 6-6 United States, and IFRS, 1-23 stock exchanges, 15-5 deferred income tax liabilities, 5-19 incidental transactions, 2-15, units-of-delivery method, 6-33 stock market crash, 1-12 and depreciation, 11-37–11-41 2-16, 4-26 units of production method, 11-11 stock options, 16-30–16-32 future income tax assets, 5-18 nonmonetary, non-reciprocal Universal Product Code (UPC), 13-31 stock splits, 15-20, 17-8–17-10 future income tax liabilities, 5-19 transactions, 2-26 unmodified opinion, 23-28 straight-line amortization, 9-13 Goods and Services Tax (GST), nonmonetary transactions, unprofitable contract, 6-58–6-59 straight-line method, 7-26–7-27, 13-14–13-16 2-26, 6-6 unrealized holding gains or losses, 7-28, 9-13, 11-9–11-10, Harmonized Sales Tax (HST), peripheral transactions, 2-15, 2-16 9-8, 18-6, C-9, C-18–C-19 14-11–14-12 13-14 related party transactions, 2-26 unrecorded items, C-9 strategic investments, 9-32–9-39 income taxes. See income taxes revenue transaction, 6-15 unsecured creditors, 23-26 BMIndexes.indd Page 24 20/02/19 8:21 AM f-1223 /208/WB02420/9781119497042/bmmatter
I-24 Subject Index
unsecured debt, 14-4 market models, 3-4 warrants, 16-10–16-14, 16-28, preparation of financial untimely disclosure, 23-4 quality of measurement, 3-6 17-15–17-19 statements, C-27–C-30 unusual gains and losses, 4-21 value-added tax, 13-14 warranty accounting, 13-1 preparation of work sheet, 22-41 unusual items, 5-12 value in use, 2-24, 11-23 warranty costs, 18-17–18-18 statement of cash flows, upfront fees, 6-19–6-20 value in use measurements, 3-7–3-8 warranty liability entries, 13-28–13-29 22-40–22-47 upside-down presentation, variable charge approach, 11-11 wasting assets, 10-21 statement of comprehensive 13-40–13-41 variable consideration, 6-21–6-25, weather, and bonds, 14-5 income columns, C-25 U.S. dollar, 7-7 6-48 weighted-average accumulated statement of financial position U.S. GAAP, 1-16, 1-23, 2-10, 8-30 variable interest entity (VIE), 14-27, expenditures, 10-38 columns, C-25 see also Financial Accounting 15-4 weighted average common/ordinary 10-column work sheet, C-24 Standards Board (FASB) vendor rebate, 8-18 shares, 17-8–17-10 trial balance columns, C-25 U.S. stock markets and verifiability, 2-10, 10-23 weighted average cost, 8-26–8-27 using a work sheet, C-24–C-30 exchanges, 1-16 vertical analysis, 23-33–23-34 weighted average number of shares working capital, 5-18, 5-23, useful life, 5-17, 10-6, 11-7, 12-14, vest, 16-33 outstanding (WACS), 8-14, 13-41 12-19, C-11 vested benefit method, 19-10 17-8–17-10 working capital ratio, 13-43 usefulness, 21-3 vested benefit obligation, 19-10 “what if” calculation, 17-3 writing off an account, 7-18 users of financial information, 1-3, vested benefits, 19-10 with recourse, 7-35–7-36 written options, 16-11, 1-5, 2-5, 6-4 vested rights, 13-19 without recourse, 7-35 17-15–17-16, 17-17 vesting, 19-8 work-in-process inventory, 8-5 V vesting period, 16-33 work sheet, C-24 vacation pay, 13-19 VIE. See variable interest entity adjusted trial balance columns, Y yield rate, 7-23 valuation (VIE) C-25 goodwill, 12-27, 12-37–12-42 virtual services, 6-1 adjustments, C-24–C-25 intangible assets, 5-17 volume discounts, 6-23–6-24 adjustments columns, C-25 Z valuation allowance, 18-32, 19-25 volume rebates, 6-21, 8-17–8-18 analysis of transactions, zero-interest-bearing note issued, valuation premise, 3-10 voluntary change, 21-5 22-41–22-47 13-10–13-11 valuation techniques, 3-3–3-7 columns, C-25 zero-interest-bearing notes, 7-21, choice of model, 3-4–3-5 W completion of, 22-47, C-25–C-27 7-24–7-27 discounted cash flow model, 3-6 wages payable, 22-19 direct method, 22-47 zero-interest debentures, bonds, or income models, 3-3–3-4 warranties, 5-19, 6-5, 6-18–6-19, income taxes, C-25–C-26 notes, 14-4 inputs, 3-5 6-48, 13-26–13-30 net income, C-27 zero-profit method, 6-50, 6-55, 18-6