Chapter 15 - The corporate income statement and the statement of stockholders' equity. Chapter 15 focuses on the corporate income statement and the statement of stockholders' equity, with an emphasis on specific items that may appear in them. Assessment of a company's quality of earnings opens the chapter. In addition, retained earnings, stock dividends, stock splits, and book value per share are covered in this chapter. | The Corporate Income Statement and the Statement of Stockholders’ Equity Multimedia Slides by: Gail A. Mestas, MAcc, New Mexico State University Chapter 15 Learning Objectives Prepare a corporate income statement and identify the issues related to evaluating the quality of earnings. Show the relationships among income taxes expense, deferred income taxes, and net of taxes. Describe the disclosure on the income statement of discontinued operations, extraordinary items, and accounting changes. Learning Objectives (cont’d) Compute earnings per share. Prepare a statement of stockholders’ equity. Account for stock dividends and stock splits. Calculate book value per share. Performance Measurement: Quality of Earnings Issues Objective 1 Prepare a corporate income statement and identify the issues related to evaluating the quality of earnings Comprehensive Income is the change in a company’s equity from sources other than owners during a period Includes Net income Changes in unrealized . | The Corporate Income Statement and the Statement of Stockholders’ Equity Multimedia Slides by: Gail A. Mestas, MAcc, New Mexico State University Chapter 15 Learning Objectives Prepare a corporate income statement and identify the issues related to evaluating the quality of earnings. Show the relationships among income taxes expense, deferred income taxes, and net of taxes. Describe the disclosure on the income statement of discontinued operations, extraordinary items, and accounting changes. Learning Objectives (cont’d) Compute earnings per share. Prepare a statement of stockholders’ equity. Account for stock dividends and stock splits. Calculate book value per share. Performance Measurement: Quality of Earnings Issues Objective 1 Prepare a corporate income statement and identify the issues related to evaluating the quality of earnings Comprehensive Income is the change in a company’s equity from sources other than owners during a period Includes Net income Changes in unrealized gains and losses Other items affecting equity FASB has taken position that income for a period should be all-inclusive, comprehensive income May be reported on income statement or separate statement, but usually reported on statement of stockholders’ equity The Corporate Income Statement shows how a company’s net income is derived Includes all Revenues Expenses Gains and losses (except from prior period adjustments) Sections of the Corporate Income Statement Income from continuing operations A company may have both continuing and discontinued operations Affected by choices of accounting methods and estimates May contain gains and losses, write-downs, and restructurings Income tax expense Discontinued operations Extraordinary gains and losses Effects of accounting changes Earnings per share Nonoperating items Corporate Income Statement Quality of Earnings refers to the substance of earnings and their sustainability into future accounting periods Because of the importance of net income
