Chapter 15: Financial Reporting and Concepts


Principles of Accounting globe

Your goals for this “reporting and concepts” chapter are to learn about:


Chapter 15 begins by delving into more advanced reporting issues, and building an awareness of the accounting profession’s conceptual underpinnings. The chapter provides detailed illustrations and explanations of special reporting scenarios, including corrections of errors, discontinued operations, other comprehensive income, and changes in accounting methods.

Calculations relating to earnings per share and book value per share are discussed and illustrated. This is followed by a discussion of the use and interpretation of selected dividend and return ratios.

The next major section of the chapter takes a broad overview perspective on the objectives and qualities of accounting information. A brief history of the development of generally accepted accounting principles and the audit profession is provided. This section concludes with a review of key assumptions inherent to the accounting model, many of which have been introduced throughout the book.

The chapter concludes with coverage of issues arising from global commerce. This topic divides into issues related to reporting issues for global subsidiaries and foreign exchange transactions. Illustrative entries are shown for the foreign exchange transactions.