Emphasis on Intuition

We introduce topics by discussing the intuition behind accounting standards before discussing the mechanics of the accounting process. In addition, we intentionally deemphasize memorization of journal entry mechanics. We believe that this approach allows students to better understand the material and to develop relevant transferrable knowledge.

Easy-to-Remember Mnemonic

Although our text emphasizes the intuition underlying the consolidation process, we also introduce the C-E-A-D-I (pronounced “seedy”) consolidation journal entry sequence to assist students in learning the mechanics of consolidation. The sequence systematically eliminates the book value of subsidiary equity (C, E), establishes the fair value adjustments for subsidiary net assets (A, D), and eliminates intercompany transactions and balances (I). Over the years, we’ve observed that this easy-to-remember mnemonic improves students’ understanding of consolidations and allows for easier recall of each step of the consolidation adjustment process.

Clear Cost-Method Coverage in Chapters 3 through 6

In recognition of the fact that, in practice, companies apply procedures that blend the cost and equity methods of pre-consolidation bookkeeping, the authors have incorporated extensive cost method coverage in the relevant chapters and assignment material.  The 4th edition continues to focus on the full equity method in the consolidations chapters, but now the cost method is also discussed and illustrated.  All cost-method discussion is clearly marked with a labeled, colored bar in the margins.

FASB Codification Throughout

We wrote our text after implementation of the FASB’s Codification and we integrated the Codification throughout, including end-of-chapter problem assignments. Unlike many advanced accounting textbooks, we cite passages of the Codification frequently so that students can become familiar with the actual language of the standards, not just the authors' summary of the standards. This also allows students to easily find the relevant passages on their own. In addition, to familiarize students with the Codification search engine and to better develop their research skills, we also include numerous FASB Codification-related research assignments in our end-of-chapter problem sets.

CPA Exam Questions

The primary purpose of the Advanced Accounting course at most universities it to prepare accounting majors for the CPA exam. To provide students with relevant practice, we have included a number of multiple choice questions in each chapter that have been adapted from past CPA exams. We are grateful to the AiCPA for granting us permission to use former CPA exam questions for this purpose.

IFRS Coverage

Accounting students must become familiar with IFRS. Fortunately, the current accounting standards relating to the main topic of the book business combinations and consolidation were written jointly by the FASB and the IASB, and are 99% equivalent. In addition, other standards (e.g., segment reporting) are similar, but have key differences. In the text, we discuss the IFRS equivalent of accounting standards and highlight the differences between the two sets of accounting standards when they occur. These discussions are identified with the IFRS icon.

Relevance and Engagement

Advanced accounting is a challenging topic. We have adopted a number of techniques in our book to make the material relevant and engaging to students. These techniques include:

Focus Companies for Each Chapter

Each chapter incorporates a “focus company” for special emphasis and demonstration. We chose companies that illustrate the topic of the chapter so that students can learn the material within context. In addition, our chapters on governmental accounting are written around a small new england town that is large enough to effectively communicate the concepts of governmental accounting, yet small enough not to obscure those concepts in unnecessary complexity. 

Real company Data in Text and Assignments

We believe that an important part of the learning process involves the application of concepts to realworld data. We include references to actual footnotes in the body of our text and also include a number of end-of-chapter problems that are written around actual footnote disclosures. These problems allow students to think about accounting concepts more broadly (i.e., less mechanically) and from the perspective of the users of financial statements.

Practice Insight Boxes

We provide a number of Practice insight Boxes resulting from interviews with practicing accountants and financial managers. These boxes provide students with insight into issues that accountants face in the real world, and with a glimpse into the types of decisions that practicing accountants must make.

Mid-Chapter and Chapter-End Reviews

Advanced accounting concepts can be challenging. To reinforce concepts presented in each chapter and to ensure student comprehension, we include topic reviews that require students to recall and apply the financial accounting techniques and concepts described in each chapter.

New in the 4th Edition:

●       Revised Chapter 1 focuses entirely on non-business-combination investment accounting.  All references to business combinations have been moved to Chapter 2.

●       Revised Chapter 2 includes the FASB’s new definition of a business (i.e., from ASU 2017-01) and includes improved discussion of the differences in accounting for a business combination and an asset acquisition that does not qualify as a business combination. In addition, 4E includes new coverage of Pushdown Accounting.

●       Revised Chapter 3 includes coverage of the new, simplified one-step goodwill impairment model (i.e., ASU 2017-04). Because the simplified model is not required for all companies until 2022, we also continue to cover the two-step model goodwill impairment model. 

●       Revised Chapter 6 includes new “intuition boxes” for the Variable Interest Entity consolidations model.     

●       Revised Chapter 7 has been rewritten to include improved focus on foreign currency denominated assets and liabilities, and the related hedge-accounting issues. We also include discussion of the FASB’s new hedge accounting rules (ASU 2017-12).   

●       Revised Chapter 9 includes emphasis on the reconciliations between government wide and fund-based financial statements to explain each reconciliation entry. This should help students better understand the objectives of these reconciliations and the information they contain.

●       Revised Chapter 10 incorporates the changes in the Not-For-Profit Financial Reporting Framework.

●       Road Map: Each chapter opens with a grid that identifies each learning objective for the chapter, the related pages, eLecture and Guided Example videos, and end of chapter assignments. This allows students and faculty to quickly grasp the chapter contents and to efficiently navigate to the desired topic.

●       myBusinessCourse (MBC): Bob Halsey has revised and recorded the eLectures and Guided Examples in MBC. In addition, even more problems from the book are now available in MBC.

●       End-of-chapter Assignments: All real-world assignments and all stylized assignments throughout the book have been refreshed with new scenarios, numbers, and solutions.