Text Updates

On page 177 of Chapter 5, the 6th line under Negative Goodwill, insert the following before financial assets: all acquired assets except

FASB Statement No. 64, footnoted on p. 358, was rescinded by the FASB April 2002 in FASB Statement No. 145, and on Aug. 27, 2002, the SEC changed the due dates for Form 10-K and Form 10-Q (see page 575) as follows: 75 days after year end for Form 10-K in 2003 and 60 days after year end in 2004, and 40 days after quarter end for Form 10-Q in 2003 and 35 days after quarter end in 2004.

In April, 2002, the FASB issued FAS 145, which rescinded FAS 64, thus negating the last sentence on page 358 and footnote 6 on that page. In August, 2002, the SEC provided for new new due dates for Form 10-K and Form 10-Q (see page 575). Form 10-K will be due 75 days after year end in 2003 and 60 days after year end in 2004; Form 10-Q will be due 40 days after quarter end in 2003 and 35 days after quarter end in 2004.

In January, 2003, the Financial Accounting Standards Board issued FASB Interpretation No. 46, "Consolidated Financial Statements." In essence, the Interpretation modifies the position taken by FASB, described on page 221-222 of the Ninth Edition of "Modern Advanced Accounting", that a pronouncement on consolidation policy was inappropriate "at this time."

Key provisions of the Interpretation are as follows:

-- Variable interest entities, (earlier termed special purpose entities) do not have an investor or investors having a controlling financial interest; further, the equity investment at risk in such entities is inadequate to enable the entities to finance their activities without additional subordinate financial support from other parties who will absorb losses of the supported entities.

-- With certain exceptions, an entity with an equity investment of less than 10 percent of its total assets is not considered able to finance its activities with-out additional subordinate financial support.

-- An enterprise must consolidate a variable interest entity if it has a contractual, ownership, or other pecuniary interest that (1) changes with changes in the entity's net assets value and (2) enables the enterprise to either, or both, receive a majority of the entity's residual return or absorb a majority of the entity's losses.

-- Numerous disclosures with respect to variable interest entities under circumstances enumerated in the Interpretation.