Chapter 4 - Balance sheet. After studying this chapter, you should be able to: Explain the uses and limitations of a balance sheet, identify the major classifications of the balance sheet, prepare a classified balance sheet using the report and account formats,. | CHAPTER 4 BALANCE SHEET INTERMEDIATE ACCOUNTING Principles and Analysis 2nd Edition Warfield Weygandt Kieso Explain the uses and limitations of a balance sheet. Identify the major classifications of the balance sheet. Prepare a classified balance sheet using the report and account formats. Determine which balance sheet information requires supplemental disclosure. Describe the major disclosure techniques for the balance sheet. Learning Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) Use and Limitations Usefulness Limitations Classification Additional Information Techniques of Disclosure Parenthetical explanations Notes Cross-reference and contra items Supporting schedules Terminology Contingencies Accounting policies Contractual situations Post–balance-sheet events Fair values Balance Sheet Current assets Noncurrent assets Liabilities Owners’ equity Format Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive benefits is allocated to pension expense in the future, specifically to the remaining service-years of the affected employees. Gain or Loss - Volatility in . | CHAPTER 4 BALANCE SHEET INTERMEDIATE ACCOUNTING Principles and Analysis 2nd Edition Warfield Weygandt Kieso Explain the uses and limitations of a balance sheet. Identify the major classifications of the balance sheet. Prepare a classified balance sheet using the report and account formats. Determine which balance sheet information requires supplemental disclosure. Describe the major disclosure techniques for the balance sheet. Learning Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) Use and Limitations Usefulness Limitations Classification .
