Final PDF to printer
Intermediate Accounting
J. DAVID SPICELAND
University of Memphis
MARK W. NELSON
Cornell University
WAYNE B. THOMAS
University of Oklahoma
, Final PDF to printer
About the Authors
DAVID SPICELAND WAYNE THOMAS
David Spiceland is Professor Emeritus in the School of Wayne Thomas is the W.K. Newton Chair and Georg
Accountancy where he taught financial accounting at the Lynn Cross Research Professor of Accounting at th
undergraduate, master’s, and doctoral levels for University of Oklahoma’s Price College of Business.
36 years. He received his BS degree in finance He received his BS degree from Southwestern
from the University of Tennessee, his MBA Oklahoma State University and his MS and PhD
from Southern Illinois University, and his PhD from Oklahoma State University. He has
in accounting from the University of Arkansas. received teaching awards at the university,
Professor Spiceland has published college, and departmental levels, and has
articles in a variety of academic and received the Outstanding Educator Award from
professional journals including The A the Oklahoma Society of CPAs. He is an author
ccounting Review, of McGraw-Hill’s Financial Accounting with
Accounting and Business Research, Journal of David Spiceland and Don Herrmann.
Financial Research, Advances in Quantitative Analysis His research focuses on various financial reporting
of Finance and Accounting, and most accounting issues and has been published in The Accounting Review
education journals: Issues in Accounting E ducation, Journal of Accounting Research, Journal of Accounting
Journal of Accounting Education, Advances in A and Economics, Contemporary Accounting Research
ccounting Education, The Accounting Educators’ Review of Accounting Studies, Accounting Organization
Journal, Accounting Education, The Journal of and Society, and others. He has served as an editor fo
Asynchronous Learning Networks, and Journal of The Accounting Review and has won the American
Business Education., and is an author of McGraw-Hill’s Accounting Association’s Competitive Manuscrip
Financial Accounting with Wayne Thomas and Don Award and Outstanding International Accounting
Herrmann. Professor Spiceland has received university Dissertation.
and college awards and recognition for his teaching, Professor Thomas enjoys various activities such a
research, and technological innovations in the classroom. tennis, basketball, golf, and crossword puzzles, and mos
of all, he enjoys spending time with his wife and kids.
MARK NELSON
Mark Nelson is the Anne and Elmer Lindseth Dean
and Professor of Accounting at Cornell
University’s Samuel Curtis Johnson Graduate
School of Management. He received his
BBA degree from Iowa State University
and his MA and PhD degrees from The ii
Ohio State University. Professor Nelson
has won ten teaching awards, including
an inaugural Cook Prize from the Ameri-
can Accounting Association.
Professor Nelson’s research focuses on decision
making in financial accounting and auditing. His
research has been published in the Accounting Review;
the Journal of Accounting Research; Contemporary A
ccounting Research; Accounting, Organizations and
Society; and several other journals. He has received the
American Accounting Association’s Notable
Contribution to Accounting Literature Award, as well as
the AAA’s Wildman Medal for work judged to make a
significant contribution to practice.
Professor Nelson served three terms as an area editor
of The Accounting Review and is a member of the
editorial boards of several journals. He also served for
four years on the FASB’s Financial Accounting
Standards Advisory Council.
, Final PDF to
iv Preface
Intermediate
Accounting Tenth
Edition:
Welcome to the new standard in intermediate accounting! Instructors recognize the “Spiceland advantage” in content that’s
intensive and thorough, as well as in writing that’s fluid and precise—together, these combine to form a resource that’s rigorous yet
readable. By blending a comprehensive approach, clear conversational tone, current updates on key standards, and the market-
leading technological innovations of Connect®, the Spiceland team delivers an unrivaled experience. As a result of Spiceland’s
rigorous yet readable learning system, students develop a deeper and more complete understanding of intermediate accounting
topics.
“The textbook is readable and easy to follow since the authors present basic concepts and then cover advanced issues.
Conceptually-oriented and dependable as the authors are timely in updating new accounting standards.”
—Hong Pak, California State Polytechnic University, Pomona
The Intermediate Accounting learning system is built around four key attributes: current, comprehensive, clear, and Connect.
Current: Few disciplines see the rapid changes that accounting experiences. The Spiceland team is committed to keeping
instructors’ courses up to date. The tenth edition fully integrates the latest FASB updates, including: • ASU No. 2018-
02—Income Statement—Reporting Comprehensive Income (Topic 220)—Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income
• ASU No. 2016–013, Financial Instruments—Credit Losses (Topic 326) on “Current Expected Credit Loss” (CECL) model for
accounting for credit losses, as well as current GAAP requirements for recognizing impairments of investments
• Comprehensive revision of Chapter 16, Accounting for Income Taxes, improving pedagogy as well as covering effects of the Tax
Cuts and Jobs Act of 2017
• FASB ASC 842-10-15-42A: Leases-Overall-Scope and Scope Exceptions-Lessor
• FASB Accounting Standards Update, Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Benefit Cost, FASB: December, 2016. SEC Amendment to Rule 15c6-1, Ex-Dividend
Date, September 2017
• FASB Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for
Hedging Activities
• ASU No. 2017-04, Intangibles— Goodwill and Other (Topic 350):
Simplifying the Test for Goodwill Impairment
, Final PDF to
• ASU No. 2015-05—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees
Paid in a Cloud Computing Arrangement
The Spiceland team also ensures that Intermediate Accounting stays current with the latest pedagogy and digital tools. The
authors have incorporated new Data Analytics cases featuring Tableau at the end of each chapter. These cases are auto-
gradable in Connect and help students develop in-demand skills in analyzing and interpreting data, and effectively
communicating findings.
the primary considerations that determined your conclusion.
Data Analytics
The phrase scientia est potentia is a Latin aphorism meaning “knowledge is power!” In a business sense, this might be
paraphrased as “Information is money!” Better information . . . better business decisions! This is the keystone of data
analytics.
Data analytics is the process of examining data sets in order to draw conclusions about the information they contain.
Data analytics is widely used in business to enable organizations to make better-informed business decisions.
Increasingly, this is accomplished with the aid of specialized data visualization software such as Tableau.
SPICELAND | NELSON | THOMAS v
The New Standard
Current events regularly focus public attention on the key role of accounting in providing information useful to financial decision
makers. The CPA exam, too, has changed to emphasize the professional skills needed to critically evaluate accounting method
alternatives. Intermediate Accounting provides a decision makers’ perspective, highlighting the professional judgment and critical
thinking skills required of accountants in today’s business environment. New in the 10 th edition, many of these cases have been
translated to an auto-graded format in Connect.
“The use of real-world examples throughout the text helps bring accounting to life for students. For example, the use of
Amazon Prime is excellent, illustrating the complexity of current business with an engaging example.” — Jennifer Winchel,
University of Virginia
Comprehensive: The Spiceland team ensures comprehensive coverage and quality throughout the learning system by
building content and assets with a unified methodology that meets rigorous standards. Students are challenged through diverse
examples and carefully crafted problem sets which promote in-depth understanding and drive development of critical-thinking
skills.
The author team is committed to providing a learning experience that fully prepares students for the future by solidif ying core
comprehension and enabling confident application of key concepts. Students can feel confident that the conceptual underpinnings
and practical skills conveyed in the tenth edition will prepare them for a wide range of real world scenarios.
Clear: Reviewers, instructors, and students have all hailed Intermediate Accounting’s ability to explain both simple and
complex topics in language that is coherent and approachable. Difficult topics are structured to provide a solid conceptual
foundation and unifying framework that is built upon with thorough coverage of more advanced topics. As examples, see
chapters 6 (Revenue Recognition), 15 (Leases) and 16 (Income Taxes). The author team’s highly acclaimed conversational
writing style establishes a friendly dialogue—establishing the impression of a conversation with students, as opposed to
lecturing at them.
Intermediate Accounting
J. DAVID SPICELAND
University of Memphis
MARK W. NELSON
Cornell University
WAYNE B. THOMAS
University of Oklahoma
, Final PDF to printer
About the Authors
DAVID SPICELAND WAYNE THOMAS
David Spiceland is Professor Emeritus in the School of Wayne Thomas is the W.K. Newton Chair and Georg
Accountancy where he taught financial accounting at the Lynn Cross Research Professor of Accounting at th
undergraduate, master’s, and doctoral levels for University of Oklahoma’s Price College of Business.
36 years. He received his BS degree in finance He received his BS degree from Southwestern
from the University of Tennessee, his MBA Oklahoma State University and his MS and PhD
from Southern Illinois University, and his PhD from Oklahoma State University. He has
in accounting from the University of Arkansas. received teaching awards at the university,
Professor Spiceland has published college, and departmental levels, and has
articles in a variety of academic and received the Outstanding Educator Award from
professional journals including The A the Oklahoma Society of CPAs. He is an author
ccounting Review, of McGraw-Hill’s Financial Accounting with
Accounting and Business Research, Journal of David Spiceland and Don Herrmann.
Financial Research, Advances in Quantitative Analysis His research focuses on various financial reporting
of Finance and Accounting, and most accounting issues and has been published in The Accounting Review
education journals: Issues in Accounting E ducation, Journal of Accounting Research, Journal of Accounting
Journal of Accounting Education, Advances in A and Economics, Contemporary Accounting Research
ccounting Education, The Accounting Educators’ Review of Accounting Studies, Accounting Organization
Journal, Accounting Education, The Journal of and Society, and others. He has served as an editor fo
Asynchronous Learning Networks, and Journal of The Accounting Review and has won the American
Business Education., and is an author of McGraw-Hill’s Accounting Association’s Competitive Manuscrip
Financial Accounting with Wayne Thomas and Don Award and Outstanding International Accounting
Herrmann. Professor Spiceland has received university Dissertation.
and college awards and recognition for his teaching, Professor Thomas enjoys various activities such a
research, and technological innovations in the classroom. tennis, basketball, golf, and crossword puzzles, and mos
of all, he enjoys spending time with his wife and kids.
MARK NELSON
Mark Nelson is the Anne and Elmer Lindseth Dean
and Professor of Accounting at Cornell
University’s Samuel Curtis Johnson Graduate
School of Management. He received his
BBA degree from Iowa State University
and his MA and PhD degrees from The ii
Ohio State University. Professor Nelson
has won ten teaching awards, including
an inaugural Cook Prize from the Ameri-
can Accounting Association.
Professor Nelson’s research focuses on decision
making in financial accounting and auditing. His
research has been published in the Accounting Review;
the Journal of Accounting Research; Contemporary A
ccounting Research; Accounting, Organizations and
Society; and several other journals. He has received the
American Accounting Association’s Notable
Contribution to Accounting Literature Award, as well as
the AAA’s Wildman Medal for work judged to make a
significant contribution to practice.
Professor Nelson served three terms as an area editor
of The Accounting Review and is a member of the
editorial boards of several journals. He also served for
four years on the FASB’s Financial Accounting
Standards Advisory Council.
, Final PDF to
iv Preface
Intermediate
Accounting Tenth
Edition:
Welcome to the new standard in intermediate accounting! Instructors recognize the “Spiceland advantage” in content that’s
intensive and thorough, as well as in writing that’s fluid and precise—together, these combine to form a resource that’s rigorous yet
readable. By blending a comprehensive approach, clear conversational tone, current updates on key standards, and the market-
leading technological innovations of Connect®, the Spiceland team delivers an unrivaled experience. As a result of Spiceland’s
rigorous yet readable learning system, students develop a deeper and more complete understanding of intermediate accounting
topics.
“The textbook is readable and easy to follow since the authors present basic concepts and then cover advanced issues.
Conceptually-oriented and dependable as the authors are timely in updating new accounting standards.”
—Hong Pak, California State Polytechnic University, Pomona
The Intermediate Accounting learning system is built around four key attributes: current, comprehensive, clear, and Connect.
Current: Few disciplines see the rapid changes that accounting experiences. The Spiceland team is committed to keeping
instructors’ courses up to date. The tenth edition fully integrates the latest FASB updates, including: • ASU No. 2018-
02—Income Statement—Reporting Comprehensive Income (Topic 220)—Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income
• ASU No. 2016–013, Financial Instruments—Credit Losses (Topic 326) on “Current Expected Credit Loss” (CECL) model for
accounting for credit losses, as well as current GAAP requirements for recognizing impairments of investments
• Comprehensive revision of Chapter 16, Accounting for Income Taxes, improving pedagogy as well as covering effects of the Tax
Cuts and Jobs Act of 2017
• FASB ASC 842-10-15-42A: Leases-Overall-Scope and Scope Exceptions-Lessor
• FASB Accounting Standards Update, Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Benefit Cost, FASB: December, 2016. SEC Amendment to Rule 15c6-1, Ex-Dividend
Date, September 2017
• FASB Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for
Hedging Activities
• ASU No. 2017-04, Intangibles— Goodwill and Other (Topic 350):
Simplifying the Test for Goodwill Impairment
, Final PDF to
• ASU No. 2015-05—Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees
Paid in a Cloud Computing Arrangement
The Spiceland team also ensures that Intermediate Accounting stays current with the latest pedagogy and digital tools. The
authors have incorporated new Data Analytics cases featuring Tableau at the end of each chapter. These cases are auto-
gradable in Connect and help students develop in-demand skills in analyzing and interpreting data, and effectively
communicating findings.
the primary considerations that determined your conclusion.
Data Analytics
The phrase scientia est potentia is a Latin aphorism meaning “knowledge is power!” In a business sense, this might be
paraphrased as “Information is money!” Better information . . . better business decisions! This is the keystone of data
analytics.
Data analytics is the process of examining data sets in order to draw conclusions about the information they contain.
Data analytics is widely used in business to enable organizations to make better-informed business decisions.
Increasingly, this is accomplished with the aid of specialized data visualization software such as Tableau.
SPICELAND | NELSON | THOMAS v
The New Standard
Current events regularly focus public attention on the key role of accounting in providing information useful to financial decision
makers. The CPA exam, too, has changed to emphasize the professional skills needed to critically evaluate accounting method
alternatives. Intermediate Accounting provides a decision makers’ perspective, highlighting the professional judgment and critical
thinking skills required of accountants in today’s business environment. New in the 10 th edition, many of these cases have been
translated to an auto-graded format in Connect.
“The use of real-world examples throughout the text helps bring accounting to life for students. For example, the use of
Amazon Prime is excellent, illustrating the complexity of current business with an engaging example.” — Jennifer Winchel,
University of Virginia
Comprehensive: The Spiceland team ensures comprehensive coverage and quality throughout the learning system by
building content and assets with a unified methodology that meets rigorous standards. Students are challenged through diverse
examples and carefully crafted problem sets which promote in-depth understanding and drive development of critical-thinking
skills.
The author team is committed to providing a learning experience that fully prepares students for the future by solidif ying core
comprehension and enabling confident application of key concepts. Students can feel confident that the conceptual underpinnings
and practical skills conveyed in the tenth edition will prepare them for a wide range of real world scenarios.
Clear: Reviewers, instructors, and students have all hailed Intermediate Accounting’s ability to explain both simple and
complex topics in language that is coherent and approachable. Difficult topics are structured to provide a solid conceptual
foundation and unifying framework that is built upon with thorough coverage of more advanced topics. As examples, see
chapters 6 (Revenue Recognition), 15 (Leases) and 16 (Income Taxes). The author team’s highly acclaimed conversational
writing style establishes a friendly dialogue—establishing the impression of a conversation with students, as opposed to
lecturing at them.
