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Financial Accounting and Accounting Standards PowerPoint Presentation
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Financial Accounting and Accounting Standards

Financial Accounting and Accounting Standards

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Financial Accounting and Accounting Standards

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    2. CHAPTER 15 LONG-TERM LIABILITIES

    3. Explain why bonds are issued. Prepare the entries for the issuance of bonds and interest expense. Describe the entries when bonds are redeemed or converted. Describe the accounting for long-term notes payable. Contrast the accounting for operating and capital leases. Identify the methods for the presentation and analysis of long-term liabilities. Study Objectives 1. On the topic, Challenges Facing Financial Accounting, what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a companys know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) 1. On the topic, Challenges Facing Financial Accounting, what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a companys know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information)

    4. Long-Term Liabilities Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive benefits is allocated to pension expense in the future, specifically to the remaining service-years of the affected employees. Gain or Loss - Volatility in pension expense can be caused by sudden and large changes in the market value of plan assets and by changes in the projected benefit obligation. Two items comprise the gain or loss: difference between the actual return and the expected return on plan assets and, amortization of the unrecognized net gain or loss from previous periodsService Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive benefits is allocated to pension expense in the future, specifically to the remaining service-years of the affected employees. Gain or Loss - Volatility in pension expense can be caused by sudden and large changes in the market value of plan assets and by changes in the projected benefit obligation. Two items comprise the gain or loss: difference between the actual return and the expected return on plan assets and, amortization of the unrecognized net gain or loss from previous periods

    5. Bond Basics

    6. Bond Basics

    7. Bond Basics

    8. Bond Basics

    9. Bond Basics

    10. Bond Basics

    11. Bond Basics

    12. Bond Basics

    13. Accounting for Bond Issues

    14. Accounting for Bond Issues

    15. Accounting for Bond Issues

    16. Issuing Bonds at Face Value

    17. Issuing Bonds at a Discount

    18. Issuing Bonds at a Discount

    19. Issuing Bonds at a Discount

    20. Issuing Bonds at a Premium

    21. Issuing Bonds at a Discount

    22. Accounting for Bond Retirements

    23. Accounting for Bond Retirements

    24. Accounting for Bond Retirements

    25. Accounting for Bond Retirements

    26. Accounting for Bond Retirements

    27. Accounting for Bond Retirements

    28. Accounting for Bond Retirements

    29. Accounting for Other Long-Term Liabilities

    30. Accounting for Other Long-Term Liabilities

    31. Accounting for Other Long-Term Liabilities

    32. Accounting for Other Long-Term Liabilities

    33. Accounting for Other Long-Term Liabilities

    34. Accounting for Other Long-Term Liabilities

    35. Accounting for Other Long-Term Liabilities

    36. Capitalization Criteria: Transfer of ownership Bargain purchase option Lease term => 75% of economic life of leased property Present value of minimum lease payments => 90% of FMV of property Accounting for Other Long-Term Liabilities

    37. Accounting for Other Long-Term Liabilities

    38. Accounting for Other Long-Term Liabilities

    42. Present Value Concepts Related to Bond Pricing

    43. Present Value Concepts Related to Bond Pricing

    44. Present Value Concepts Related to Bond Pricing

    45. Present Value Concepts Related to Bond Pricing

    46. Present Value Concepts Related to Bond Pricing

    47. Effective-Interest Method of Bond Amortization

    48. Effective-Interest Method of Bond Amortization

    49. Effective-Interest Method of Bond Amortization

    50. Straight-line Method of Bond Amortization

    51. Copyright