CFO fundamentals : your quick guide to internal controls, financial reporting, IFRS, Web 2.0, cloud computing, and more PDF
Preview CFO fundamentals : your quick guide to internal controls, financial reporting, IFRS, Web 2.0, cloud computing, and more
FM.indd 1 1/18/2012 5:07:13 PM CFO Fundamentals FM.indd 1 1/18/2012 5:07:13 PM Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Asia, and Australia, Wiley is globally commit- ted to developing and marketing print and electronic products and services for our customers’ professional and personal knowledge and understanding. The Wiley Corporate F&A series provides information, tools, and insights to corporate pro- fessionals responsible for issues affecting the profitability of their companies, from accounting and finance to internal controls and performance management. FM.indd 2 1/18/2012 5:07:13 PM CFO Fundamentals Your Quick Guide to Internal Controls, Financial Reporting, IFRS, Web 2.0, Cloud Computing, and More JAE K. SHIM JOEL G. SIEGEL ALLISON I. SHIM John Wiley & Sons, Inc. FM.indd 3 1/18/2012 5:07:13 PM Copyright © 2012 by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. Third edition (The Vest Pocket CFO) published in 2008 by John Wiley & Sons, Inc. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permis- sion of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, afx (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions. Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warr anties with respect to the accuracy or com- pleteness of the contents of this book and specifically discl aim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or afx (317) 572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that apepars in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. Library of Congress Cataloging-in-Publication Data: Shim, Jae K. CFO fundamentals : your quick guide to internal controls, financial reporting, IFRS, Web 2.0, cloud computing, and more / Jae K. Shim, Joel G. Siegel, and Allison I. Shim. — 4th ed. p. cm. — (Wiley corporate F&A) Rev. ed. of: The vest pocket CFO. 3rd ed. c2008. Includes index. ISBN 978-1-118-13249-4 (pbk.); ISBN 978-1-118-21955-3 (ebk); ISBN 978-1-118-21958-4 (ebk); ISBN 978-1-118-21960-7 (ebk) 1. Corporations—United States—Finance—Handbooks, manuals, etc. I. Siegel, Joel G. II. Shim, Allison I., 1984– III. Shim, Jae K. Vest pocket CFO. IV. Title. HG4061.S48 2012 658.15—dc23 2011037184 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 FM.indd 4 1/18/2012 5:07:13 PM To Chung Shim, dedicated wife and mother; Roberta M. Siegel, loving wife and colleague; and Sylvia and Arnold Siegel, loving mother and brother. FM.indd 5 1/18/2012 5:07:13 PM FM.indd 6 1/18/2012 5:07:13 PM Contents What This Book Will Do for You xv PART ONE: REPORTS AND FILINGS 1: Chief Financial Offi cer’s Role and Reports 3 Role of the Chief Financial Offi cer 3 Governmental Reporting 12 Reporting under the Sarbanes-Oxley Act 12 XBRL Reporting 13 Other Reporting 14 2: Securities and Exchange Commission Filings 15 SEC Rules 15 S Forms 16 SEC Regulations 17 SOX Reporting Requirements 19 PART TWO: FINANCIAL REPORTING 3: Financial Statement Reporting: The Income Statement 27 How Is the Income Statement Presented? 27 Revenue Recognition 30 Construction Contracts 31 Expense Recognition 37 4: Financial Statement Reporting: The Balance Sheet 45 Assets 45 Accounts Receivable 46 Inventory 49 Fixed Assets 54 Disclosure 62 Liabilities 65 Accounting for Compensated Absences 72 Environmental Obligations 74 Exit or Disposal Activities 75 vii FM.indd 7 1/18/2012 5:07:13 PM viii ◾ Contents Fair Value Measurements 76 Fair Value Option for Financial Assets and Financial Liabilities 78 Statement of Cash Flows 80 Available-for-Sale and Held-to-Maturity Securities 82 5: Statement of Cash Flows 95 Classifi cations of Cash Flow 95 Analysis of the Statement of Cash Flows 100 6: Accounting and Disclosures 107 Accounting Changes 107 Futures Contracts 119 Various Disclosures 122 7: Key Financial Accounting Areas 125 Consolidation 125 Investments in Stocks and Bonds 127 Leases 138 Pension Plans 147 Postretirement Benefi ts Excluding Pensions 158 Income Tax Allocation 161 Deferred Tax Liability versus Deferred Tax Asset 164 Tax Rates 167 Foreign Currency Accounting 169 Translation of Foreign Currency Statements When the Foreign Currency Is the Functional Currency 172 International Financial Reporting Standards 177 8: Interim and Segmental Reporting 185 Interim Reporting 185 Segmental Reporting 188 PART THREE: COST MANAGEMENT AND IT SYSTEMS 9: Cost Management and Analysis 197 What Is Cost Management and Analysis? 197 Strategic Cost Management 198 Overhead Costing 199 Activity-Based Costing 205 Activity-Based Management 210 Target Costing and Pricing 214 10: Cost-Volume-Profi t Analysis and Leverage 219 Cost-Volume-Profi t Analysis 219 What-If Analysis 223 FM.indd 8 1/18/2012 5:07:14 PM
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