Data Analytics

Businesses have experienced significant change in the last several decades due to the increased use of new technologies ranging from data analytics and Blockchain to machine learning and artificial intelligence. In response to the changing demands of the business world, the AACSB has incorporated data analytics requirements within its educational framework. More recently, the AICPA and NASBA have underscored the importance of data analytics by making it a significant element in the CPA Evolution Model Curriculum. The consensus suggests that students entering the accounting profession (or the business world more generally) need an understanding and working knowledge of data analytics to compete for the best jobs.

The Sixth Edition includes assignments in myBusinessCourse that help students develop their data analytics skills. The assignments use Excel and Tableau to hone analysis and visualization skills. In addition, Appendix A at the end of the book provides an overview of data analytics, data visualization, and best practices for the effective display of data.

Welcome to Advanced Accounting!

The text has extensive student and instructor support. PowerPoint slides, eLecture videos, guided examples, and online homework and quizzes provide students with additional learning resources, and support both virtual and in-class instruction.

Target Audience

Advanced Accounting is intended for use, at either the undergraduate or graduate level, in the course commonly known as advanced accounting. It is also designed to be used in courses focusing on mergers and acquisitions that are often part of the MBA curriculum or that are offered as a nondegree, professional development program.

Uniform CPA Examination Coverage

Advanced Accounting 6e emphasizes critical thinking and analysis of information. These concepts are also highlighted in the revised CPA Examination. The text provides extensive coverage of the content areas suggested for advanced (ADV) and governmental/not-for-profit (GVT/NFP) courses by the NASBA CPA Evolution Model Curriculum.

The Uniform CPA Examination consists of three required Core exams, and one of three Discipline exams. This text provides direct content coverage for these exams:

• FAR Core examination—Financial Accounting and Reporting
• BAR Discipline examination—Business Analysis and Reporting

Listed below are content areas normally introduced in advanced accounting courses, as well as nongovernmental NFP and governmental accounting courses. However, applications for many other content areas are covered in the text, and assume a previous background in introductory and intermediate concepts. The organization of topics below is taken from the Uniform CPA Examination Blueprints, provided by the AICPA.

FAR Core Examination Section

BAR Discipline Examination Section

How This Book Effectively Teaches Advanced Accounting Topics

Conceptual Focus

Conceptual explanations focus on the logic underlying reporting standards. Each topic is developed by explaining the underlying business activity, the reporting goals, and how standards and procedures achieve these goals, using language students can understand. Illustrations from actual practice enhance understanding and familiarize students with the information presented in real financial statements. Reporting requirements are complex and require substantial judgment in their application. And standards change every year. Conceptual understanding prepares students to evaluate and effectively apply future standards throughout their professional careers.

Logical Flow of Topical Coverage

The organization of chapters reflects the logical flow of topics:

• Mergers and acquisitions material is covered in Chapters 1–7.
• International subsidiary translation and consolidation, foreign currency transactions and hedging, and other financial derivatives (futures, options, and swaps) are in Chapters 7–9.
• Reporting standards for state and local government and NFP organizations are in Chapters 10–13.
• Partnerships, bankruptcy and reorganization, and the SEC are covered in Chapters 14–16.

Relevant Real Company Illustrations

Each chapter begins with a description of a familiar focus company, and how its activities and reporting practices relate to that chapter’s topics. For example, in Chapter 2, IBM’s extensive acquisitions illustrate accounting for mergers and acquisitions. Noncontrolling interests are common in the resort industry, and in Chapter 5 Vail Resorts illustrates reporting for noncontrolling interests in subsidiaries. In Chapter 9, Kellanova's hedging practices illustrate hedge accounting for futures, options and swaps. In Chapter 13, Beta Alpha Psi’s financial statements illustrate NFP reporting standards. Throughout each chapter, examples from actual practice highlight major topics, using either the focus company or other companies in the same industry.

Emphasis on Current Issues and Trends

Reporting Perspective

Reporting Perspectives comment on topics such as the strengths and weaknesses in reporting standards, motivations for changes in standards, their costs and benefits, ethical issues, implications for information quality, and proposals for new standards. The following is an example from Chapter 4.

Business Applications

Taken from current news and actual financial statements, Business Application boxes illustrate reporting practices, current issues, and controversies. Here is an example from Chapter 2, in the section covering valuation methods for assets acquired and liabilities assumed in a business combination.

IFRS

Discussion and illustration of international financial reporting standards and proposals appear in each of the business combinations, foreign currency translation and transactions, and futures, options and swaps chapters. The following is an excerpt from Chapter 5.

Illustrations of IFRS in practice are also provided. Here is an excerpt from Chapter 5.

Clear and Logical Development of Business Combinations Topics

Reporting issues related to business combinations cover a variety of topics. Consolidation procedures are difficult to comprehend and can be confusing to students. Emphasis in this text is on the measurement aspects of combinations—reporting assets and liabilities acquired, determining acquisition cost, valuing noncontrolling interests, and eliminating intercompany accounts. The consolidation chapters start with the reasons why companies should consolidate and the goals of consolidation, and then explain how consolidation procedures achieve these goals.

To make consolidation procedures more comprehensible, eliminations subsequent to acquisition (covered in Chapters 4–7) presume that the parent uses the complete (full) equity method. Exclusive use of the complete (full) equity method allows students to focus on the goals of consolidation and the key issues in consolidation procedures. Once students develop a solid understanding of the consolidation process, changes in procedures required when the parent uses the cost method can be introduced. The appendix to Chapter 4 explains the eliminating entries necessary to adjust the parent’s accounts to the complete equity method before proceeding as usual with consolidation.

Additional Pedagogy

To reinforce concepts presented in each chapter and ensure student comprehension, each chapter has two or more In-Chapter Review Problems that require students to recall and apply the accounting techniques and concepts described in the chapter. The solutions to the review problems are included after each chapter’s assignments. The following example is from Chapter 2.

Learning Objectives identify the primary learning outcomes for each chapter. An end-of-chapter Review of Key Concepts summarizes the key topics of each chapter.

Extensive End-of-Chaper Material

End-of-chapter questions, exercises, and problems cover all major topics and have a range of difficulty levels, allowing students ample opportunity to practice their understanding of the chapter. Some problems require students to use real company data in applying their knowledge.

In the state and local government chapters, two sets of comprehensive problems for the same county take the student through preparation of financial statements for the general fund, for other governmental, proprietary, and fiduciary funds, and culminating in preparation of the county’s governmentwide statements, with reconciliations. The Lake County problems are P10.19, P11.19, and P12.19, and the Hot Springs County problems are P10.20, P11.20, and P12.20. These problems can also be assigned individually or as a class project.

New to the Sixth Edition

The text is completely updated for new standards, proposals, and other relevant events as of 2025. All illustrations, current practices, and reporting perspectives are also completely updated. In addition, some text material has been rewritten to clarify and better organize specific topics. Many changes are based on faculty and student feedback. Changes by chapter include:

• Chapter 1:  Clarification of reporting for debt investments, business application on diversity in practice for reporting HTM investments, application of ASU 2023-02 to equity investments and ASU 2023-05 to joint ventures.
• Chapter 2:  For asset acquisitions versus business combinations, clarification of how to determine the type of transaction and the FASB’s current position on this issue, reporting perspective on ASU 2021-08, valuation of acquired contract assets and liabilities, business applications on acquired technology assets, earnouts, and the definition of measurement period.
• Chapter 3:  Reporting perspective on consolidation of VIEs, clarification of pushdown accounting procedures, business application on the choice between equity method and consolidation.
• Chapter 4:  Reporting perspective on application of revaluation steps to various types of assets, business application on auditing goodwill impairment testing procedures, update on the IASB’s position on goodwill impairment testing.
• Chapter 5:  New chapter company (Vail Resorts) and related illustrations, expanded material on IFRS full versus partial goodwill approaches.
• Chapter 6:  Clarification of the reasoning behind upstream and downstream intercompany eliminations.
• Chapter 7:  Business application on highly inflationary subsidiaries.
• Chapter 8:  Detail on assessing hedge effectiveness, expanded discussion of U.S. GAAP versus IFRS for hedge accounting.
  
• Chapter 9:  Detail on procedures for assessing hedge effectiveness and accounting for excluded components, business application on interest rate swaps.
• Chapter 10:  Material on actual use of GAAP by state and local governments.
• Chapter 11:  Discussion of application of GASB Statement No. 103 for proprietary funds, accounting for subscription-based information technology arrangements (SBITAs), application of GASB Statement No. 101 on compensated absences, business application on an actual government’s disclosure of its compensated absences, leases, and SBITAs.
• Chapter 12:  Extensive evaluation of the City of St. Louis’ current financial statements, update on the GASB’s current focus and accomplishments.
• Chapter 13:  Discussion of application of the CECL model to NFP receivables, business application on investments.
• Chapter 14:  Business application on the changing legal structure of CPA firms.
• Chapter 15:  New chapter companies: Big Lots and Akorn Pharmaceuticals.
• Chapter 16:  Extensive updating of SEC activities and interactions with listed companies, new material on risk assessment tools, cybersecurity disclosures, non-GAAP performance measures, pay versus performance disclosures, current SEC agenda and PCAOB activities, and a business application on critical audit matters (CAMs).

There are over 180 new or revised end-of-chapter exercises and problems at various levels of difficulty.

Supplement Package

For Instructors

myBusinessCourse: This easy-to-use program grades homework automatically and provides students with additional help when you are not available. Visit www.mybusinesscourse.com to sign up or to learn more about this program’s features and benefits. In addition, detailed diagnostic tools assess class and individual performance. myBusinessCourse is ideal for online courses, blended courses, and traditional face-to-face courses for which you want to offer students more resources to succeed. Assignments with the MBC Homework icon in the margin are available in myBusinessCourse. eLecture videos and Guided Examples for the In-chapter Reviews are available for you to assign students.

Solutions Manual: Created by the textbook author, the Solutions Manual contains complete solutions to all the assignments in the textbook.

Test Bank: Written by the textbook author, the test bank includes a variety of multiple-choice questions and problems, at various levels of difficulty.

Excel Templates:  Excel spreadsheets for select assignments are provided through myBusinessCourse. The Excel spreadsheets are identified by the Excel icon.

PowerPoint: Edited by the textbook author, the PowerPoint slides outline key elements of each chapter.

For Students

eLectures: Each chapter’s Learning Objective includes an eLecture video available in our online learning management system, myBusinessCourse.

Guided Examples: Guided Example videos are available for each In-chapter Review, available in myBusinessCourse.

Excel Templates: Excel spreadsheets for select assignments are provided through myBusinessCourse. These spreadsheets will save time in data entry and allow students to dedicate additional time to learning the material. Availability of the Excel spreadsheets is identified by the Excel icon.