西方财务会计原版课件04.pptx

;Understand the uses and limitations of an income statement. Prepare a single-step income statement. Prepare a multiple-step income statement. Explain how to report irregular items. Explain intraperiod tax allocation. Identify where to report earnings per share information. Prepare a retained earnings statement. Explain how to report other comprehensive income.;Elements Single-step Multiple-step Condensed income statements;Evaluate past performance.;Companies omit items that cannot be measured reliably.;Companies have incentives to manage income to meet or beat Wall Street expectations, so that market price of stock increases and value of stock options increase. ;Format of the Income Statement;Format of the Income Statement;Format of the Income Statement;Single-Step Format;Single-Step Format;The single-step income statement emphasizes a. the gross profit figure. b. total revenues and total expenses. c. extraordinary items more than it is emphasized in the multiple-step income statement. d. the various components of income from continuing operations.;Separates operating transactions from nonoperating transactions. Matches costs and expenses with related revenues. Highlights certain intermediate components of income that analysts use. ;Operating section Nonoperating section Income tax Discontinued operations Extraordinary items Earnings per share;Multiple-Step Format;Multiple-Step Format;Review;Companies are required to report irregular items in the financial statements so users can determine the long-run earning power of the company.;Irregular items fall into six categories Discontinued operations. Extraordinary items. Unusual gains and losses. Changes in accounting principle. Changes in estimates. Corrections of errors.;Discontinued Operations occurs when, (a) company eliminates the results of operations and cash flows of a component. there is no significant continuing involvement in that component. A