2005 U.S. Master GAAP Guide

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Bill D. Jarnagin, Ph.D., C.P.A. Allen, Gibbs & Houlik Faculty Fellow in Accounting School of Accountancy Wichita State University 2005 U.S.

Master GAAP Guide TM CCH INCORPORATED Chicago Table of Contents xi Table of Contents Topic Paragraph 1 Basic Financial Statements ARB No. 43, Chapter 1 4Prior Opinions, ARB No. 43, Chapter 2 4 Form of Statements, ARB No.

46 4Discontinuance of Dating Earned Surplus, APB Opinion No. 6 4Status of Accounting Research Bulletins, APB Opinion No. 12 4Omnibus Opinion 41967, APB Opinion No.

20 4Accounting Changes, SFAS No. 73 4 Reporting a Change in Accounting for Railroad Track Structures and SFAS No. 111 4Rescission of FASB Statement No.

32 and Technical Corrections . . .

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. . 101 APB Opinion No.

22 4Disclosure of Accounting Policies . . .

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115 APB Opinion No. 9 4Reporting the Results of Operations, APB Opinion No. 10 4Omnibus Opinion 41966, APB Opinion No.

30 4 Reporting the Results of Operations and SFAS No. 144 4 Accounting for the Impairment or Disposal of Long-Lived Assets . 131 APB Opinion No.

9 4Reporting the Results of Operations and SFAS No. 16 4Prior ... more. less.

Period Adjustments . . . . . . . . . . . . . . . . . . . . . . . 145 SFAS No. 57 4Related Party Disclosures . . . . . . . . . . . . . . . . . . . . 161 SFAS No. 95 4Statement of Cash Flows, SFAS No. 102 4Statement of Cash Flows 4Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale and SFAS No. 104 4Statement of Cash Flows 4Net Reporting of Certain Cash Receipts and Cash Payments and Classification of Cash Flows from Hedging Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 SFAS No. 130 4Reporting Comprehensive Income . . . . . . . . . . . . . 180 Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 196 2 Supplementary Financial Information SFAS No. 131 4Disclosures About Segments of an Enterprise and Related Information and SFAS No. 135 4Rescission of FASB Statement No. 75 and Technical Corrections . . . . . . . . . . . . . . . . 201 SFAS No. 89 4Financial Reporting and Changing Prices and SFAS No. 139 4Rescission of FASB Statement No. 53 and Amendments to FASB Statements No. 63, 89 and 121 . . . . . . . . . . . . . . . . . . . . . . 261 3 Current Assets and Investments ARB No. 43, Chapter 3 4Working Capital, ARB No. 43, Chapter 4 4 Inventory Pricing and APB Opinion No. 6 4Status of Accounting Research Bulletins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 APB Opinion No. 18 4The Equity Method of Accounting for Investments in Common Stock and SFAS No. 94 4Consolidation of All Majority-Owned Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 321 SFAS No. 115 4Accounting for Certain Investments in Debt and Equity Securities, SFAS No. 135 4Rescission of FASB Statement No. 75 and Technical Corrections and SFAS No. 140 4Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 © 2004, CCH INCORPORATED. All rights reserved. xii Table of Contents Topic Paragraph FASB Technical Bulletin No. 85-4 4Accounting for Purchases of Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361 4 Productive Tangible Assets ARB No. 43, Chapter 9 4Depreciation and APB Opinion No. 12 4 Omnibus Opinion 41967 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 APB Opinion No. 29 4Accounting for Nonmonetary Transactions . . 421 SFAS No. 34 4Capitalization of Interest Cost, SFAS No. 42 4 Determining Materiality for Capitalization of Interest Cost, SFAS No. 58 4Capitalization of Interest Cost in Financial Statements That Include Investments Accounted for by the Equity Method and SFAS No. 62 4Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Borrowings and Certain Gifts and Grants . . . 431 SFAS No. 143 4Accounting for Asset Retirement Obligations . . . . . 446 APB Opinion No. 6 4Status of Accounting Research Bulletins, SFAS No. 144 4Accounting for the Impairment or Disposal of Long-Lived Assets and SFAS No. 147 4Acquisitions of Certain Financial Institutions 4an Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . 461 Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 495 5 Intangibles (Including Research and Development and Computer Software) SFAS No. 2 4Accounting for Research and Development Costs . . . . 521 SFAS No. 68 4Research and Development Arrangements . . . . . . . . 561 SFAS No. 86 4Accounting for the Costs of Computer Software To Be Sold, Leased, or Otherwise Marketed . . . . . . . . . . . . . . . . . . . . . 581 SFAS No. 142 4Goodwill and Other Intangible Assets, SFAS No. 145 4Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections and SFAS No. 147 4Acquisitions of Certain Financial Institutions 4an Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590 Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 596 6 Taxes ARB No. 43, Chapter 10 4Real and Personal Property Taxes . . . . . . 601 APB Opinion No. 10 4Omnibus Opinion 41966, APB Opinion No. 2 4 Accounting for the cInvestment Credit and APB Opinion No. 4 (Amending No. 2) 4Accounting for the cInvestment Credit . . . . . 626 SFAS No. 109 4Accounting for Income Taxes . . . . . . . . . . . . . . . . . 651 7 Equities 4 Part I ARB No. 43, Chapter 3 4Working Capital . . . . . . . . . . . . . . . . . . . . 701 APB Opinion No. 12 4Omnibus Opinion 41967 and APB Opinion No. 21 4Interest on Receivables and Payables . . . . . . . . . . . . . . . . . . 705 © 2004, CCH INCORPORATED. All rights reserved. xiii Table of Contents Topic Paragraph APB Opinion No. 26 4Early Extinguishment of Debt, SFAS No. 140 4 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities and SFAS No. 145 4Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections. . . . . . . . . . . . . . . . . . . . . . . . 709 SFAS No. 5 4Accounting for Contingencies, SFAS No. 11 4 Accounting for Contingencies 4Transition Method, SFAS No. 114 4Accounting by Creditors for Impairment of a Loan and SFAS No. 118 4Accounting by Creditors for Impairment of a Loan 4 Income Recognition and Disclosures. . . . . . . . . . . . . . . . . . . . . . 718 SFAS No. 6 4Classification of Short-Term Obligations Expected To Be Refinanced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727 SFAS No. 15 4Accounting by Debtors and Creditors for Troubled Debt Restructurings, SFAS No. 114 4Accounting by Creditors for Impairment of a Loan and SFAS No. 118 4Accounting by Creditors for Impairment of a Loan 4Income Recognition and Disclosures. . 736 SFAS No. 43 4Accounting for Compensated Absences . . . . . . . . . . 745 SFAS No. 47 4Disclosure of Long-Term Obligations . . . . . . . . . . . . 754 SFAS No. 78 4Classification of Obligations That Are Callable by the Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763 SFAS No. 146 4Accounting for Costs Associated with Exit or Disposal Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 772 FASB Interpretation No. 39 4Offsetting of Amounts Related to Certain Contracts and FASB Interpretation No. 41 4Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 781 FASB Technical Bulletin No. 90-1 4Accounting for Separately Priced Extended Warranty and Product Maintenance Contracts . . . . . . . 790 Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 795 8 Equities 4 Part II ARB No. 43, Chapter 7 4Capital Accounts, ARB No. 46 4 Discontinuance of Dating Earned Surplus and APB Opinion No. 6 4 Status of Accounting Research Bulletins . . . . . . . . . . . . . . . . . . . 801 APB Opinion No. 14 4Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants . . . . . . . . . . . . . . . . . . . . . 810 ARB No. 43, Chapter 13 4Compensation Involved in Stock Option and Stock Purchase Plans, APB Opinion No. 25 4Accounting for Stock Issued to Employees, SFAS No. 123 4Accounting for Stock-Based Compensation and SFAS No. 148 4Accounting for Stock-Based Compensation 4Transition and Disclosure 4an Amendment of FASB Statement No. 123 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 815 SFAS No. 48 4Revenue Recognition When Right of Return Exists . . 831 SFAS No. 49 4Accounting for Product Financing Arrangements . . . 845 SFAS No. 84 4Induced Conversions of Convertible Debt . . . . . . . . . 875 SFAS No. 129 4Disclosure of Information About Capital Structure . . 880 © 2004, CCH INCORPORATED. All rights reserved. xiv Table of Contents Topic Paragraph Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 896 9 Earnings Per Share SFAS No. 128 4Earnings per Share and SFAS No. 150 4Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 901 10 Leases SFAS No. 13 4Accounting for Leases, SFAS No. 27 4Classification of Renewals or Extensions of Existing Sales-Type or Direct Financing Leases, SFAS No. 28 4Accounting for Sales with Leasebacks, SFAS No. 29 4Determining Contingent Rentals, SFAS No. 91 4 Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases, SFAS No. 98 4Accounting for Leases: Sale-Leaseback Transactions Involving Real Estate, Sales-Type Leases of Real Estate, Definition of the Lease Term, Initial Direct Costs of Direct Financing Leases, SFAS No. 135 4Rescission of FASB Statement No. 75 and Technical Corrections and SFAS No. 145 4Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1001 SFAS No. 22 4Changes in the Provisions of Lease Agreements Resulting from Refunding of Tax-Exempt Debt . . . . . . . . . . . . . . 1031 SFAS No. 23 4Inception of the Lease . . . . . . . . . . . . . . . . . . . . . . . 1061 11 Employee Benefits SFAS No. 35 4Accounting and Reporting by Defined Benefit Pension Plans and SFAS No. 110 4Reporting by Defined Benefit Pension Plans of Investment Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 1101 APB Opinion No. 12 4Omnibus Opinion 41967, SFAS No. 87 4 Employers 9 Accounting for Pensions, SFAS No. 132 4Employers 9 Disclosures About Pensions and Other Postretirement Benefits, SFAS No. 135 4Rescission of FASB Statement No. 75 and Technical Corrections and SFAS No. 146 4Accounting for Costs Associated with Exit or Disposal Activities . . . . . . . . . . . . . . . . . . . . . . . . . . 1121 SFAS No. 88 4Employers 9 Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1141 SFAS No. 106 4Employers 9 Accounting for Postretirement Benefits Other Than Pensions, SFAS No. 132 (Revised) 4Employers 9 Disclosures About Pensions and Other Postretirement Benefits and SFAS No. 135 4Rescission of FASB Statement No. 75 and Technical Corrections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1161 SFAS No. 112 4Employers 9 Accounting for Postemployment Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1181 Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 1191 © 2004, CCH INCORPORATED. All rights reserved. xv Table of Contents Topic Paragraph 12 Foreign Currency and Derivatives ARB No. 43, Chapter 12 4Foreign Operations and Foreign Exchange and SFAS No. 52 4Foreign Currency Translation . . . . . . . . . . . . 1201 SFAS No. 107 4Disclosures about Fair Value of Financial Instruments, SFAS No. 126 4Exemption from Certain Required Disclosures about Financial Instruments for Certain Nonpublic Entities, SFAS No. 133 4Accounting for Derivative Instruments and Hedging Activities, SFAS No. 137 4Accounting for Derivative Instruments and Hedging Activities 4Deferral of the Effective Date of FASB Statement No. 133, SFAS No. 138 4Accounting for Certain Derivative Instruments and Certain Hedging Activities, SFAS No. 145 4Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections and SFAS No. 149 4Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities . . . . . . . . . . . . . . . . . . . . . . 1251 SFAS No. 150 4Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity . . . . . . . . . . . . . . . . 1255 Summary of EITFs Related to Derivatives and Other Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1260 13 Business Combinations ARB No. 51 4Consolidated Financial Statements. . . . . . . . . . . . . . . 1301 SFAS No. 141 4Business Combinations and SFAS No. 147 4 Acquisitions of Certain Financial Institutions 4an Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 . 1326 SFAS No. 72 4Amended by SFAS Nos. 141, 142 and 147 4Accounting for Certain Acquisitions of Banking and Thrift Institutions and SFAS No. 147 4Acquisitions of Certain Financial Institutions 4an Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1351 14 Interim Reporting APB Opinion No. 28 4Interim Financial Reporting and SFAS No. 3 4 Reporting Accounting Changes in Interim Financial Statements . . 1401 15 Specialized Industries ARB No. 43, Chapter 11 4Government Contracts and ARB No. 45 4 Long-Term Construction-Type Contracts . . . . . . . . . . . . . . . . . . . 1501 SFAS No. 19 4Financial Accounting and Reporting by Oil and Gas Producing Companies, SFAS No. 25 4Suspension of Certain Accounting Requirements for Oil and Gas Producing Companies and SFAS No. 69 4Disclosures about Oil and Gas Producing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1502 SFAS No. 7 4Accounting and Reporting by Development Stage Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1504 SFAS No. 45 4Accounting for Franchise Fee Revenue . . . . . . . . . . . 1505 SFAS No. 50 4Financial Reporting in the Record and Music Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1510 SFAS No. 51 4Financial Reporting by Cable Television Companies . 1515 © 2004, CCH INCORPORATED. All rights reserved. xvi Table of Contents Topic Paragraph SFAS No. 60 4Accounting and Reporting by Insurance Enterprises, SFAS No. 97 4Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, SFAS No. 113 4Accounting and Reporting for Reinsurance of Short-Duration and Long- Duration Contracts and SFAS No. 120 4Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration Participating Contracts . . . . . . . . . . . . 1525 SFAS No. 61 4Accounting for Title Plant . . . . . . . . . . . . . . . . . . . . 1530 SFAS No. 63 4Financial Reporting by Broadcasters and SFAS No. 139 4Rescission of FASB Statement No. 53 and Amendments to FASB Statements No. 63, 89 and 121 . . . . . . . . . . . . . . . . . . . . . . 1535 SFAS No. 65 4Accounting for Certain Mortgage Banking Activities and SFAS No. 134 4Accounting for Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans Held for Sale by a Mortgage Banking Enterprise . . . . . . . . . . . . . . . . . . . . . . . 1540 SFAS No. 66 4Accounting for Sales of Real Estate . . . . . . . . . . . . . . 1545 SFAS No. 67 4Accounting for Costs and Initial Rental Operations of Real Estate Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1550 SFAS No. 71 4Accounting for the Effects of Certain Types of Regulation, SFAS No. 101 4Regulated Enterprises 4Accounting for the Discontinuation of FASB Statement No. 71 and SFAS No. 135 4 Rescission of FASB Statement No. 75 and Technical Corrections . 1555 SFAS No. 90 4Regulated Enterprises 4Accounting for Abandonments and Disallowances of Plant Costs . . . . . . . . . . . . . . . . . . . . . . . . 1560 SFAS No. 91 4Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1565 SFAS No. 92 4Regulated Enterprises 4Accounting for Phase-In Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1570 SFAS No. 93 4Recognition of Depreciation by Not-for-Profit Organizations and SFAS No. 99 4Deferral of the Effective Date of Recognition of Depreciation by Not-for-Profit Organizations . . . . . 1575 SFAS No. 116 4Accounting for Contributions Received and Contributions Made and SFAS No. 136 4Transfer of Assets to a Not-for-Profit Organization or Charitable Trust that Raises or Holds Contributions for Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1580 SFAS No. 117 4Financial Statements of Not-for-Profit Organizations 1585 SFAS No. 124 4Accounting for Certain Investments Held by Not-for- Profit Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1590 SFAS No. 140 4Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities . . . . . . . . . . . . . . . . . . 1592 Summary of American Institute of Certified Public Accountants (AICPA) Statements of Position (SOP) . . . . . . . . . . . . . . . . . . . . 1595 Summary of Financial Accounting Standards Board Statements of Financial Accounting Concepts (SFAC) . . . . . . . . . . . . . . . . . . . . 1596 © 2004, CCH INCORPORATED. All rights reserved.

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