Supplements:

The authors continue to write the major ancillary materials that accompany the text, including the website materials. The Testbank is a key component of our Learning System and has been an area of major emphasis in the authors’ development of the fifth edition. An extensive review process was undertaken to ensure the most complete, accurate, and flexible Testbank available. It has been revised for all the changes and additions to the text. Greater variety has been added at each level of rigor. The fifth edition Testbank has over 800 new test items and more extensive explanations of solutions.

The financial statements and disclosure notes of Google now are packaged with the textbook as well as available through a link at the text website. These replace the FedEx statements previously in a text appendix. The statements and notes are the basis for text references and cases in most chapters.

New Features:

A new coauthor, Mark Nelson of Cornell University, has joined the Spiceland author team for fifth edition. Mark is an award-winning full professor at Cornell University, where he has been using the Spiceland text for several years.  Mark is extremely active and visible in the discipline, serving as an editor of The Accounting Review and member of the Financial Accounting Standards Advisory Council. 

A new CPA/CMA Review Questions section has been added to the end-of-chapter material between the Exercises and Problems. The CPA questions are multiple choice questions used in the Kaplan CPA Review Course and focus on the key topics within each chapter, permitting quick and efficient reinforcement of those topics as well as conveying a sense of the way the topics are covered in the CPA exam. The CMA questions are adapted from questions that previously appeared on Certified Management Accountant (CMA) exams.

Star problems are a new feature in the fifth edition.  These are problems (more than one-third new) in each chapter that are designated by a <a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073526878/588542/star.JPG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (0.0K)</a> to indicate that they are particularly challenging, requiring students to combine multiple concepts or requiring judgment beyond explicit explanation in chapter discussions. 

The United States is moving rapidly toward converging US GAAP with the International Financial Reporting Standards (IFRS) that are followed by most of the rest of the world. An extensive discussion has been added to Chapter 1 that provides an overview of the background and current status of the convergence process. Separate IFRS boxes within chapters highlight emerging issues and key differences between US and international GAAP in the context of the chapter topics. End of chapter assignment material has been added to reinforce students’ understanding of these differences.

Chapter by Chapter Changes :

Chapter 1 Environment and Theoretical Structure of Financial Accounting

• Revised the section on our global marketplace to reflect the most recent developments in the move toward global accounting standards.
• Enhanced the coverage of the Sarbanes-Oxley Act to include information about the cost of compliance.
• Revised the section on the elements of financial statements to provide a more concise presentation of the material.
• Added a section on the evolution of accounting principles that includes discussions of the move to the asset/liability approach and the move toward fair value in standard setting. The fair value discussion includes information on two new, important FASB standards, SFAS No. 157 and SFAS No. 159.
• Moved the section on ethics in accounting to earlier in the chapter to provide a better flow of material.

Chapter 2 Review of the Accounting Process

• Enhanced the section on the conversion of cash basis to accrual basis to provide a more thorough analysis of the process and added additional end-of-chapter material on this topic.

Chapter 3 The Balance Sheet and Financial Disclosures

• The introductory material on financial disclosures and disclosure notes has been enhanced to provide more thorough coverage of the topic.

Chapter 4 The Income Statement and Statement of Cash Flows

• The section on comprehensive income has been moved from the beginning of Part A to the end. It will be easier for students to grasp this difficult topic after first covering the content and structure of the income statement.
• In the discussion of changes in accounting principles, a section has been added that addresses the accounting treatment of mandated changes in principles.
• The statement of cash flows illustration in Part B of the chapter has been expanded to include additional transactions. Presentation of cash flows from investing and financing activities also has been added to the illustration.

Chapter 5 Income Measurement and Profitability Analysis

• The section dealing with long-term contracts has been rewritten to clarify the similarities and differences between the percentage-of-completion and completed contract methods.  Discussion has been added that clarifies the intuition underlying those approaches.
• Added discussion of multiple-deliverable revenue-recognition arrangements to cover the accounting approach indicated by EITF 00-21.
• Rewrote Part B of the chapter (Profitability Analysis) to organize it around the DuPont framework, adding discussion of leverage and using a peer analysis to illustrate the framework, and added end-of-chapter assignment material on this topic.

Chapter 6 Time Value of Money Concepts

• Added discussion and illustration of how to use Excel and a calculator to determine present value and future value.

Chapter 7 Cash and Receivables

• Enhanced the discussion of the valuation of noninterest-bearing notes including a computation aid for determining present value with Excel and with a calculator.

Chapter 8 Inventories: Measurement

• Added information in the updated chapter-opening financial reporting case on LIFO liquidations.
• Added end-of-chapter material on physical quantities included in inventory, LIFO liquidations, and dollar-value LIFO.

Chapter 9 Inventories: Additional Issues

• Added a graphic to help students in their understanding of the lower-of-cost-or-market approach to valuing inventory.

Chapter 10 Operational Assets: Acquisition and Disposition

• Updated material where necessary to reflect the issuance of SFAS No. 141 (R), primarily the additional consideration that discusses negative goodwill and the section on purchased research and development.
• Revised the section on nonmonetary exchanges to provide more thorough coverage of the topic.

Chapter 11 Operational Assets: Utilization and Impairment

• The journal entry to record impairment losses has been added to impairment illustrations.

Chapter 12 Investments

• Rewrote Part A (which covers accounting for investments when the investor lacks significant influence).  This section has been reordered to cover held-to-maturity investments, then trading securities, and then available-for-sale securities.  The same set of investments illustrate each approach, and a summary table compares and contrasts accounting under the three approaches to highlight similarities and differences among alternative approaches.
• Added coverage of SFAS No. 157 and determining fair value.  Tied investor accounting for held-to-maturity investments to the debt issuer’s accounting discussed under long-term liabilities in Chapter 14.
• Simplified the explanation of fair-value adjustments at period end for both trading securities and available-for-sale securities by using the same basic journal-entry structure for both, while highlighting the effects on net income and other comprehensive income.
• Enhanced Part B (which covers the equity method) by illustrating equity-method accounting for one of the investments discussed in Part A.
• Added a summary table that compares and contrasts accounting under the fair-value and equity-method approaches to help students understand similarities and differences between these approaches.
• Added a new learning objective for the fair value option to correspond with new discussion of SFAS No. 159 and the fair value option in both Parts A and Parts B. Also added end-of-chapter assignment material on this topic.
• Rewrote the decision-maker perspective to highlight the effects of alternative accounting approaches on income recognition and gains and losses and to emphasize the potential for earnings management.

Chapter 13 Current Liabilities and Contingencies

• Added discussion of accounting for contingent liabilities that a company acquires when it purchases another company under SFAS No. 141(R), “Business Combinations.”
• Revised coverage of contingencies for tax uncertainties that according to FIN 48, “Accounting for Uncertainty in Income Taxes” are no longer considered loss contingencies and added end-of-chapter assignment material on this topic

Chapter 14 Bonds and Long-Term Notes

• Since it’s rare to have a delay in issuing bonds that causes them to be issued between interest dates, discussion of this infrequent event is moved to an appendix to the chapter.
• SFAS No. 159 , “The Fair Value Option for Financial Assets and Financial Liabilities," gives companies the option to value some or all of their financial assets and liabilities at fair value. Discussion of how the fair value option is applied to liabilities has been added to the chapter, and extensive assignment materials related to the fair value option have been added.
• Added computation aids for determining present values with Excel and with a calculator.

Chapter 15 Leases

• In an important pedagogical improvement, lessor accounting for nonoperating leases has been changed from the “gross method” of recording the lease receivable to the net method. Instruction is greatly simplified as students now immediately see that the lessee’s entries and the lessor’s entries are “two sides of the same coin.” End-of-chapter assignment materials have been revised accordingly.
• Added computation aids for determining present values with Excel and with a calculator.

Chapter 16 Accounting for Income Taxes

• Added a new section, “Coping with Uncertainty in Income Taxes,” and related end-of-chapter assignment materials in response to FIN 48, “Accounting for Uncertainty in Income Taxes.”
• Enhanced the deferred tax accounting illustrations.

Chapter 17 Pensions and Other Postretirement Benefit Plans

• Enhanced and simplified the illustrations of recording the expense, gains and losses, and prior service cost for both pensions and other postretirement benefit plans prescribed by SFAS No. 158.
• Improved the format of the pension spreadsheet.

Chapter 18 Shareholders’ Equity

• Simplified and modernized the discussion of stock issuance by eliminating coverage of share purchase contracts.

Chapter 19 Share-Based Compensation and Earnings per Share

• Enhanced the discussion of incentive and nonqualified plans and their tax treatment.
• Restricted stock awards are quickly replacing stock options as the share-based compensation plan of choice. In response, the discussion of EPS calculation is expanded to include the effect of these stock award plans as well as stock option plans that are not fully vested. Coverage is presented in a way that allows flexibility in the extent to which it is included in lesson plans and assignments.
• Coverage of SARs is moved to an appendix to the chapter.  SARs along with options are becoming less popular. Their decline in popularity and their relatively complexity cause many to choose not to cover this topic.

Chapter 20 Accounting Changes and Errors

• Some changes in reporting entity are a result of changes in accounting rules, but the more frequent change in entity occurs when one company acquires another one. Discussion has been added to describe the disclosure required in these situations as prescribed by SFAS No. 141(R).

Chapter 21 Statement of Cash Flows Revisited

• This chapter continues to be devoted entirely to in depth coverage of the statement of cash flows to complement and extend the more fundamental presentation of the statement in Chapter 4.