Chapter2 Accounting income and assets.pptVIP

Review Chapter 1 Four financial statements Four accounting assumptions Qualitative Characteristics Chapter2 Accounting Income and Assets: The Accrual Concept （会计收入和资产：权责理念） INCOME, CASH FLOWS, AND ASSETS: DEFINITIONS AND RELATIONSHIPS 1. Economic earnings（经济收益） 2. Distributable earnings（可分配收益） 3. Sustainable income （可持续收入） 4. Permanent earnings（永久收益） 5. Accounting income（会计收入） THE ACCRUAL CONCEPT OF INCOME the recognition （确认）of revenues （收入）and expenses （费用）in periods other than cash（现金） is actually received or spent 1. Income statement (1)Format （格式）and Classification（分类） Revenues from the sales of goods and services（营业收入） Other income and revenues （营业外收入） (2)IAS（国际会计标准） Presentation Requirements (classification of expenses) (3)Components of Net Income Suggested Format Revenues from the sales of goods and services - Operating expenses = Operating income from continuing operations + Other income and revenues = Recurring income before interest and taxes from continuing operations - Financing costs = Recurring (pretax) income from continuing operations +/- Unusual or infrequent items = Pretax earnings from continuing operations - Income tax expense = Net income from continuing operations +/- Income from discontinued operations +/- Extraordinary items (net of tax) +/- Cumulative effect of accounting changes (net of tax) = Net income (4) Recurring （经常）versus Nonrecurring（非经常） Items recurring operating activities = the best indicator of future income 2. Accounting Income: Revenue and Expense Recognition（确认） Recognition issues must be addressed: (1) timing（时点） (2) measurement（计量） Two conditions meet for revenue recognition to take place. (1) Completion of the earnings process (2) Assurance of payment (1) Departures（背离 ）from the Sale Basis of Revenue Recognition (2) Percentage-of-Completion（完工百分比） and Completed Contract (全部完工)Methods (3) Comparison of Percentage-of-Completion and Completed Contract Met