I-1 Index A financial reporting issues,3: 696–713 Expenses: Compensation–Retirement AAII. see American Association of cash flow statements,3: 706–709 Benefits (ASC 715),3: 737 Individual Investors earnings and balance sheets, Fair Value Measurements and AAR. see average accounting rate of 3:697–706 Disclosures (ASC 820), 3:475n.2 return accounting costs, 2:28 General Electric disclosures, 3:138 Abbott Laboratories, 4:135–136; 5:213 accounting equation, 3:12 Income Taxes (ASC 740), 3:566 ABG Gas Supply LLC, 3:708 accounting estimates, 3:698–699 Interest (ASC 835), 3:486n.11 ability to take risk, investors’, 4:417–419. Accounting for Income Taxes (SFAS 109), Leases (ASC 840), 3:526n.29, 526n.31, see also risk tolerance 3:566 635n.12 AbitibiBowater Inc., 3:520–522 Accounting for the Costs of Computer Statement of Cash Flows (ASC 230), abnormal returns, 5:124 Software to be Sold, Leased, or 3:529n.32 ABP (pension fund), 4:434–435 Otherwise Marketed (SFAS 86), Accounting Standards Updates (ASUs), absolute advantage, 2:347–354 3:489 3:138, 168n.24, 169 absolute dispersion, 1:430 accounting goodwill, 3:240 accounting systems, 3:73–75 absolute frequency, 1:395 accounting policies debits and credits, 3:74–75, 78–94 absolute priority rule, 5:483 changes in, 3:137–138 flow of information in,3: 74 absolute return, for alternative disclosures relating to, 3:135–138 Investment Advisers Ltd. case study, investments, 6:129–130 retrospective application of, 3:184 3:78–94 absolute risk objectives, 4:416 accounting process, 3:53–70 account reviews absorption approach to trade balance, financial statements in,3: 68–70 firm policies on,1: 105 2:449–450 Investment Advisers Ltd. case study, systematic, 1:114 ABSs. see asset-backed securities 3:53–70 accounts Abu Dhabi Investment Authority, 4:221 records in, 3:55–67 balance of payments, 2:370–371, academic designations, order of, 1:204 accounting profit 377–379 accelerated book building, 5:50 defined, 2:28; 3:566 with beneficial ownership,1: 186, 187 accelerated methods of depreciation, taxable income vs., 3:566–571 contra, 3:46, 225 3:178–180, 493 and current tax assets/liabilities, defined, 3:46 acceptance region, test statistic, 3:567–568 doubtful, 3:176, 711 1:630–631 and deferred tax assets/liabilities, equations for, 3:48–53 access, short-term borrowing strategy 3:568–571 on balance sheet and income and, 4:191 taxable profit vs.,3: 576–581 statement, 3:49–50 account information, regular statements and business combinations/deferred on statement of retained earnings, of, 1:105 taxes, 3:581 3:50–51 accounting and investments in subsidiaries, using, 3:51–53 accrual, 3:71, 698–699 branches, associates, and interests, family, 1:108, 186, 188–189 acquisition method of, 3:480 3:581 as financial statement elements,3: 46–48 “big bath,” 3:682 temporary differences,3: 577–580 in FX market, 2:412–413 cash-basis, 3:698–699 accounting records, 3:55–67 on income statements, 3:49–51 “cookie jar” reserve, 3:682–683 Accounting Regulatory Committee, in performance calculations, 1:128 double-entry, 3:51 3:113 representative, 1:223 Accounting and Auditing Enforcement accounting risk, 4:263 T-accounts, 3:78–94 Release (SEC), 3:699–701 accounting scandals, 3:666 tax asset valuation, 3:712 Accounting and Corporate Regulatory accounting standards. see also specific temporary new, 1:239, 272 Authority, 3:105, 116, 686 standards types of, 3:47 accounting choices biased application of, 3:682–683 uncollectible, 3:699–700 aggressive convergence of, 3:155–156, 168 accounts payable and bias in application of accounting for revenue recognition, 3:168–171 in accrual accounting, 3:72 standards, 3:682–683 and ROE, 3:736–738 as current liability, 3:232 conservative vs., 3:678–683 Accounting Standards Board of Japan, accounts payable management, defined, 3:670 3:115 4:185–188 biased, 3:670–678 accounting standards boards, 3:106–108 cash disbursements, 4:188 conservative, 3:678–683 attributes of, 3:108 evaluating, 4:188 aggressive vs., 3:678–683 Financial Accounting Standards Board, trade discounts, 4:187–188 benefits of,3: 682 3:107–108 accounts receivable bias in application of accounting International Accounting Standards as current assets, 3:225–227 standards, 3:682–683 Board, 3:106–107 defined, 3:48 defined, 3:670 Accounting Standards Codification and financial reporting quality,3: 714 in extractive industries, 3:679–680 (FASB), 3:107–108 and taxable/deductible temporary losses in, 3:679 Accounting Standards Updates, 3:138, differences, 3:579 and deferred-tax assets, 3:700–701 168n.24, 169 and tax bases of assets, 3:572, 573 earnings management with, Business Combinations (ASC 805), accounts receivable aging schedule, 3:676–677 3:480n.9 4:180–181 bind 1 June 17, 2017 4:16 PM I-2 Index accounts receivable management, active strategies advanced economies, trade-to-GDP 4:175–181 borrowing, 4:192 ratio for, 2:340 customers’ receipts, 4:177–180 short-term investing, 4:171–172 Advanced Micro Devices, 5:209 evaluating, 4:180–181 activist shareholders, 6:136. see also adverse audit opinion, 3:28 trade granting process, 4:176–177 shareholder activism adverse selection, with insurance, 5:34 accounts receivable turnover, 4:160 activity ratios, 3:348–355 advertisements. see also GIPS accredited individuals, 4:236n.21 calculation of, 3:349–351 Advertising Guidelines (GIPS Accredited Investors, 6:133n.14 in company analysis, 5:230–231 Section III) accrual accounting defined, 2:222; 3:349–350 defined, 1:258 cash-basis vs., 3:698–699 evaluation of, 3:352–355 information included in, 1:258 defined, 1:264 interpretation of, 3:351–355 advisers, selecting, 1:157 Input Data (GIPS Section I.1), 1:237 fixed asset turnover,3: 354 Aegis Value Fund, 1:435 revenue recording under, 3:71 inventory turnover and DOH, aerospace industry, governmental accruals, reporting of, 3:71–73 3:351–352 influences on,5: 225–226 accrued expenses payables turnover and number of AFC. see average fixed cost as current liability, 3:232 days of payables, 3:353 AFDB. see African Development Bank reporting, 3:72–73 receivables turnover and DSO, affiliated stockholders, as takeover accrued interest, 1:378–379; 5:413–417 3:352–353 defense, 4:34 accrued revenue, 3:72 total asset turnover, 3:354 affirmative covenants,3: 617; 5:310, 626 accumulated depreciation, 3:46 working capital turnover, 3:354 Afghanistan, 3:116 accumulated other comprehensive AD. see aggregate demand Africa. see also specific regions and income, 3:248–249 ADB. see Asian Developmental Bank countries Acer Inc., 3:331–333; 5:209 ADC Telecommunications, 4:209–210 debt and equity outstanding, 5:350 ACH. see Automated Clearing House AD curve. see aggregate demand curve and IFRS, 3:117 acid-test ratio, 4:160 Additional Compensation Arrangements industrial comparative ratio, 5:617 acquisition [Standard IV(B)], 1:144–145 REIT returns, 6:164–165 of businesses, 3:593 application of the standard, 1:144–145 terms of trade for, 2:337, 338 of long-lived assets, 3:475–493 compliance procedures, 1:144 African Development Bank (AFDB), accounting for, 3:475 guidance, 1:144 2:413; 5:372 capitalisation of interest costs, text of, 1:46, 144 after-tax cost of debt, 4:85 3:486–489 additional information, 1:264 after-tax nominal return, 4:302 capitalisation of internal development additional services, for select clients, agency bonds, 5:372–373 costs, 3:489–493 1:116 agency relationship, 4:11; 5:61. see also capitalising vs. expensing costs, addition rule for probabilities, principal–agent relationship 3:481–486 1:483–484 agency RMBS, 5:490–491, 503. see also and financial reporting issues,3: 706 add-on rates, 5:429–431 collateralized mortgage obligations intangible assets, 3:478–481 adequate compliance procedures, (CMOs); mortgage pass-through property, plant, and equipment, 1:147–149 securities 3:475–478 Adidas AG, 5:657–658 agent options, 1:182 acquisition method of accounting, 3:480 adjustable-rate mortgages (ARMs), 5:487 agents, trustee, 5:479 action lag, 2:318 adjusted consolidated segment operating age ratios, asset, 3:518–522 actions income (adjusted CSOI), 3:693–696 aggregate demand (AD), 2:137–148 investment (see also Investment adjusted EBITDA, 3:692 and AD curve, 2:145–148 Analysis, Recommendations, and adjusted funds from operations (AFFO), and business cycle, 2:204–205 Actions [Standard of Professional 6:166 defined, 2:136 Conduct V]) adjustments and fiscal policy,2: 302–303 fair dealing in, 1:111–112 financial statement,3: 756–771 and global recession (2007-2009), firm policies on,1: 105–106 to debt, 3:768–770 2:165–167 impact of, 1:40–41 framework for, 3:756 and imports/exports, 2:338–339 unethical, 1:57 for goodwill, 3:762–764 and inflationary gap,2: 167–168 personal, 1:83 for inventory, 3:757–759, 757–760, investment strategies for decrease in, unethical, 1:57 759–760 2:164–165 active crawling peg currency regime, for investments, 3:756–757 investment strategies for increase in, 2:439–440 for off-balance-sheet financing, 2:168 active investment strategies 3:764–771 IS curve, 2:137–144 industry analysis in, 5:188–189 for plant, property, and equipment, LM curve, 2:144–145 information-acquisition costs for, 3:761–762 and recessionary gap, 2:163–167 5:123–124 inventory, 3:426–433 shifts in, 2:150–157 and market efficiency,5: 117 declines and recoveries of inventory capacity utilization, 2:153 active management value, 3:427–428 consumer and business expectations, of alternative investments, 6:124, 129 inventory write-downs and financial 2:153 of portfolios ratios, 3:428–433 economic growth, 2:155 capital market line for, 4:366 valuation, 3:73 exchange rate, 2:155 information-motivated trading in, 5:10 administrative costs, 2:367–368 fiscal policy,2: 153 manager performance in, 5:129 administrative fees, 1:264 household wealth, 2:151–152 manager selection for, 5:116 ADRs.