Chapter 1

New vignette

Updated international discussion

Chapter 2

Increased emphasis on fair-value accounting

Increased emphasis on revenue recognition

Revised section on materiality

Chapter 3

Revised discussion of inventory methods with emphasis on the perpetual inventory method

Simplified work sheet based on the perpetual method

Moved material on reversing entries to appendix

Discussion of subsidiary ledgers and special journals moved to the Digital Tool

Revised and simplified section on conversion from cash to accrual basis

The accounting equation has been inserted in the margin next to key journal entries in this chapter. This new feature reinforces the students' understanding of the impact of an accounting transaction on the financial statements

Chapter 4

New discussion and infographic that simplify the discussion related to the advantages and disadvantages of the income statement

New section on earnings management

Revised section on irregular items, emphasizing restructuring charges and reporting within the income statement

Chapter 5

New infographic that simplifies the discussion related to the advantages and disadvantages of the balance sheet

Moved discussion of subsequent events to the disclosure materials in Chapter 25

Introduced discussion of financial instruments

Chapter 6

New appendix on using a financial calculator called ``Technology Tools for Time Value Problems.'' It illustrates how to use a financial calculator or computer spreadsheet to solve time value of money problems

Introduced calculator solutions for selected problems

Chapter 7

New vignette on sale of loans by sub-prime lenders

Updated discussion on control of cash and electronic commerce

Introduced calculator solutions

Additional real-company disclosures of cash and receivables

New graphic on impact of credit cards on bad debts

New discussion of allowance for loan losses used for earnings management

Chapter 8

New infographic on items included in inventory

Introduced real companies to illustrate merchandising and manufacturing inventories

Chapter 9

New opening vignette on inventory valuation

Chapter 10

New infographic on interest capitalization

Introduced real-company disclosure on interest capitalization

New infographic to summarize the accounting for exchanges

Chapter 11

New vignette on impairment, including discussion of international standards

New disclosure on impairments and property, plant, and equipment

Chapter 12

Revised discussion of characteristics of intangible assets

Expanded discussion of goodwill

New infographic on identifying research and development costs

Revised and updated discussion of start-up costs, advertising costs, and initial operating losses

Updated disclosures related to intangibles and research and development costs

Appendix updated for software costs developed or obtained for internal use

Chapter 13

New vignette on unearned revenues

New illustration summarizing payroll liabilities

Updated disclosures of current liabilities

Chapter 14

New vignette on weather bonds

Introduced calculator solutions

Updated real-company disclosure on debt extinguishment

Simplified discussion on the presentation and analysis of long-term debt

Updated real-company disclosure of long-term debt

Chapter 15

Updated vignette

New discussion on use of dividends versus treasury stock purchases

Revised discussion of issue costs

Revised discussion of debt-like preferred stock

Chapter 16

Updated vignette on stock splits

Updated disclosure of the statement of stockholders' equity, including comprehensive income

Chapter 17

Streamlined discussion of accounting for convertible debt

Updated discussion of preferred stock

Streamlined and updated discussion of political debate on stock option accounting

Updated real-company disclosure on stock compensation plans

Updated discussion in appendix on additional complications related to stock options

Chapter 18

New vignette on equity accounting

Enhanced discussion of portfolio effects of debt and equity investments

Moved Appendix 18A on transfers between categories to the Digital Tool

Moved Appendix 18B on changing from and to the equity method to Chapter 23 (Accounting Changes) to better illustrate these changes

Streamlined discussion in Appendix 18C on special issues related to investments

New appendix on accounting for derivatives

Chapter 19

New vignette on revenue recognition for Internet companies

Revised discussion on revenue recognition

Chapter 20

New vignette on management of tax costs

New discussion on differences between tax return and GAAP reporting

New real-company income tax disclosure

Deletion of alternative minimum tax

Moved discussion of intra-period tax allocation to the Digital Tool

Moved Appendix 20B on the conceptual aspects of inter-period tax allocation to the Digital Tool

Chapter 21

New vignette on wealth creation in retirement plans

New graphic on size of pension funds

Expanded discussion of trends in pensions

Streamlined discussion on capitalization versus non-capitalization

Updated discussion for new pension disclosure standard

Revised discussion on the Pension Reform Act and related issues

Chapter 22

Updated vignette on leasing

Streamlined discussion related to the advantages of leasing

Updated real-company disclosures of leases by lessees and lessors

Expanded discussion of rationale for sale-leaseback

Chapter 23

Updated discussion of motivations for changes

Appendix on changing from and to the equity method added

Chapter 24

Relocated ``Usefulness of Statement of Cash Flows'' section to the front of the chapter

Real-company disclosures used throughout the chapter

Chapter 25

Updated and simplified discussion of reporting for diversified companies

New section on subsequent events added

New discussion on Internet reporting

Updated discussion on reporting of future events

Updated discussion on fraudulent financial reporting and the profession's response

Moved the appendix ``Accounting for Changing Prices'' to the Digital Tool