Chapter 1

• Introduced coverage of Statement of Financial Accounting Standards 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). This statement creates a fair-value option under which an entity may irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and financial liabilities. Among the many financial assets available for the fair-value option are investments currently accounted for by means of the equity method. SFAS 159 underscores the FASB’s emphasis on fair values for financial reporting.

• Added new case on equity method impairment testing.

Chapter 2

• Added discussion of Google’s acquisition of YouTube.

• Included updated list of notable business combinations.

• Revised coverage to include SFAS 141R, Business Combinations and the use of the acqusition method.

• Streamlined discussion on pooling of interests emphasizing its historical perspective and legacy effects.

• Added new case on the acquisition method as well as several end-of-chapter problems.

Chapter 3

• Expanded coverage of contingent consideration in business combinations.

• Added several new end-of-chapter problems covering the acquisition method of accounting and goodwill impairment testing.

• Updated popular Wendy’s case for the recent spin-off of Baja Fresh.

Chapter 4

• Revised coverage to reflect SFAS 141R, Business Combinations, and SFAS 160, Noncontrolling Interests in Consolidated Financial Statements.

• Added new discussion question highlighting the economic unit method.

• Provided new and expanded coverage on step acquisitions using the acquisition method.

Chapter 5

• Added reference to the effect of the acquisition method on accounting for intercompany profits.

Chapter 6

• Revised coverage of variable interest entities.

• Edited writing style extensively to enhance clarity of exposition.

Chapter 7

• Edited writing style extensively to enhance clarity of exposition.

• Revised and updated several end-of-chapter problems.

Chapter 8

• Shortened and combined sections to form a single section titled SFAS 14.

• Updated annual report excerpts in chapter.

• Updated Analysis Cases and Excel Cases at end of chapter.

Chapter 9

• Updated exchange rate quotes from The Wall Street Journal.

• Updated end-of-chapter Internet Case.

Chapter 10

• Updated anecdotal references to international mergers in chapter.

• Updated annual report excerpts in body of chapter.

Chapter 11

• Added subsection on culture.

• Added new section “A General Model of the Reasons for International Differences in Financial Reporting.”

• Updated exhibits listing IFRSs and summarized the use of IFRSs in preparing consolidated financial statements.

• Added discussion of IAS 1, “IAS 1, Presentation of Financial Statements.”

• Added new section “A Principles-Based Approach to Standard Setting,” which discusses differences in the standard-setting approach used by the IASB and the FASB.

• Added new section “Obstacles to Worldwide Comparability of Financial Statements,” which discusses the problems associated with translating IFRSs to foreign languages and the influence that culture can have on the interpretation of IFRSs.

• Added new Discussion Question, “Which Standard-Setting Approach Is Best?”

• Developed new Comprehensive Illustration to demonstrate how to prepare a reconciliation of net income and stockholders’ equity from IFRSs to U.S. GAAP.

• Rewrote most of end-of-chapter Questions.

Chapter 12

• Updated to reflect modest grammar and context revisions.

• Updated to contemplate publishing in late 2007, that is referencing law changes/issues as current to 2007 and 2008 as possible.

• Updated end-of-chapter questions and problems to reflect the 2007 and 2008 time horizons.

Chapter 13

• Updated information to include recent bankruptcy filings.

• Provided additional information about companies emerging from Chapter 11 reorganization.

• Updated end-of-chapter Research and Analysis Cases.

Chapter 14

• Updated references to Uniform Partnership Act and other source material.

• Updated text material for changes in tax law.

• Revised and updated end-of-chapter problems as needed.

Chapter 15

• Deleted Communication Case 2.

• Edited writing style for ease of readability.

Chapter 16

• Updated virtually all real-world examples included in chapter.

• Because GASB 34 was issued a number of years ago, changed emphasis from GASB 34 compliance to the reality of producing dual financial statements.

• Emphasized more of the differences between government-wide financial statements and fund-based financial statements.

• Rewrote or revised much of the material on the consumption method and the purchases method.

Chapter 17

• Updated virtually all real-world examples.

• Reworked material dealing with the modified approach.

• Reworked explanation of component units.

• Included updated financial statements for a public university that follows the accounting guidance of the GASB and its Statement 35.

Chapter 18

• Updated all information on the number of private not-for-profit organizations and the amounts given to private not-for-profit organizations in the United States.

• Updated financial statements shown for a private not-for-profit organization.

• Updated material for possible changes in authority over the GAAP hierarchy.

• Added one Research Case and rewrote the chapter’s Communications Case.

Chapter 19

• Updated to reflect modest grammar and context revisions.

• Updated to contemplate publishing in early 2008 by referencing transactions and tax issues with 2007 and 2008 as the current year, wherever possible.