Term
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Definition
| Displays a company's operating performance, that is, its net profit or loss, during the reporting period. |
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Term
| Income Statement and Statement of cash flows |
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Definition
| Report changes that occured during a particular reporting period. |
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Term
| Income from Continuing Operations includes |
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Definition
| Revenues, Expenses, Gains, and Losses that will probably continue in future periods. |
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Term
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Definition
| Is reported in a separate line in the income statement. |
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Term
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Definition
| Is a percentage of reported income and reported seperatly. |
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Term
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Definition
| Includes revenues and expenses directly related to the primary revenue-generating activities of a company. |
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Term
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Definition
| Relates to peripheral or incidental activities of a company. |
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Term
| Single-Step Income Statement |
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Definition
| Format groups all revenues and gains together and all expenses and losses together. |
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Term
| Multiple-Step Income Statement |
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Definition
| Format includes a number of intermediate subtotals before arriving at income from contributing operations. |
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Term
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Definition
| refers to the ability of reported earnings (income) to predict a company’s future earnings. |
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Term
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Definition
| include costs associated with shutdown or relocation of facilities or downsizing of operations. |
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Term
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Definition
| that restructuring costs be recognized only in the period incurred. |
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Term
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Definition
| is the objective for the initial measurement of a liability associated with restructuring costs. |
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Term
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Definition
| in operating income require investigation to determine their permanent or transitory nature. |
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Term
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Definition
| from the sale of investments often can significantly inflate or deflate current earnings. |
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Term
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Definition
| numbers are management’s view of “permanent earnings,” in the sense of being a better long-run performance measure. |
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Term
| The Sarbanes-Oxley Act requires |
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Definition
| reconciliation between pro forma earnings and earnings determined according to GAAP. |
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Term
| Separate reporting as a discontinued operation. |
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Definition
| is required when the disposal of a component represents a strategic shift that has or will have, a major effect on a company’s operations and financial results. |
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Term
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Definition
| effects of a discontinued operation are reported separately in the income statement, below income from continuing operations. |
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Term
| If a component to be discontinued has not yet been sold |
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Definition
| its income effects, including any impairment loss, usually still are reported separately as discontinued operations. |
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Term
| Voluntary changes in accounting principles |
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Definition
| are accounted for retrospectively by revising prior years’ financial statements. |
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Term
| Changes in depreciation, amortization, or depletion methods |
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Definition
| are accounted for the same way as a change in an accounting estimate. |
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Term
| change in accounting estimate |
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Definition
| is reflected in the financial statements of the current period and future periods. |
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Term
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Definition
| shows the amount of income earned by a company expressed on a per share basis. |
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Term
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Definition
| is the total change in equity for a reporting period other than from transactions with owners. |
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Term
| Reporting comprehensive income |
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Definition
| can be accomplished with a single, continuous statement or in two separate, but consecutive statements. |
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Term
| Comprehensive income includes |
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Definition
| net income as well as other gains and losses that change shareholders’ equity but are not included in traditional net income. |
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Term
| If the shares are not sold |
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Definition
| the unrealized gain is part of other comprehensive income. |
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Term
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Definition
| is presented for each period for which results of operations are provided. |
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Term
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Definition
| are inflows and outflows of cash related to the transactions entering into the determination of net operating income. |
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Term
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Definition
| the cash effect of each operating activity is reported directly in the SCF. |
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Term
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Definition
| cash flow from operating activities is derived indirectly by starting with reported net income and adding or subtracting items to convert that amount to a cash basis. |
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Term
| Changes in assets and liabilities |
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Definition
| can indicate that cash inflows are different from revenues and cash outflows are different from expenses |
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Term
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Definition
| does not reduce cash, but is subtracted in the income statement. So, we add back depreciation expense to net income to eliminate it. |
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Term
| adjustments for changes in assets and liabilities |
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Definition
| that indicate that components of net income are not the same as cash flows. |
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Term
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Definition
| involve the acquisition and sale of (1) long-term assets used in the business and (2) nonoperating investment assets. |
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Term
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Definition
| involve cash inflows and outflows from transactions with creditors (excluding trade creditors) and owners. |
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Term
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Definition
| are issued for periods of less than a year, typically as quarterly financial statements. |
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Term
| Discontinued operations and unusual items |
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Definition
| are reported entirely within the interim period in which they occur. |
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Term
| Quarterly EPS calculations |
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Definition
| follow the same procedures as annual calculations. |
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Term
| Accounting changes made in an interim period |
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Definition
| are reported by retrospectively applying the changes to prior financial statements. |
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