Operations because that is the level of profitability

Info icon This preview shows pages 13–15. Sign up to view the full content.

View Full Document Right Arrow Icon
operations because that is the level of profitability that is likely to persist (continue) into the future. Likewise, the financial press tends to focus on income from continuing operations when it discloses corporate earnings (often described as earnings before one-time charges).
Image of page 13

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
IFRS INSIGHT Module 2 I Overview of Business Activities and Financial Statements 2-14 Balance Sheet and Income Statement under IFRS U.S. GAAP and IFRS require a similar set of financial statements with similar formats. Both stan- dards require current and long-term classifications for assets and liabilities, and both recognize revenues when earned and expenses when incurred. Although differences between U.S. GAAP and IFRS do exist at the "detailed level," there are at least three broader differences worth mention: GAAP makes no formal prescription for the balance sheet and the income statement; however, the SEe does prescribe the types of accounts and number of years that should be disclosed per Reg. SoX. This listing of required accounts is more detailed: Reg. SoX requires three years of comparative income statements whereas IFRS requires only two. GAAP requires the reporting of extraordinary items as a separate category of the income statement if they are unusual and infrequent; IFRS has no extraordinary item category. For items that are either unusual or infrequent, but not both, GAAP requires separate presentation in the income statement as a component of earnings from continuing operations; IFRS also requires disclosure of these items, but allows for such disclosure in footnotes to financial statements as an alternative to the income statement. NTERPRETING A STATEMENT OF STOCKHOLDERS' EQUITY The statement of stockholders' equity reconciles the beginning and ending balances of stockhold- ers' equity accounts. The statement of stockholders' equity for Apple is shown in Exhibit 2.7. --- ------ EXHIBIT 2.7 Apple's Statement of Stockholders' Equity APPLE INC. -Statement of Stockholders' Equity For Year Ended September 25, 2010 Other Stockholders' Equity Total Stockholders' Equity millions) Common Stock Retained Earnings Balance at September 26, 2009 $ 8,210 Common stock issued. . . . . . . . . . . . .. 2,458 et income . Dividends ................ •.. , . Other. . Balance at September 25, 2010 $10,668 $77 $31,640 2,458 14,013 o (320) $47,791 $23,353 14,013 o (197) $37,169 (123) $(46) Apple's first equity component is common stock. The balance in common stock at the beginning of the year is $8,210 million. During 2010, Apple issued $2,458 million worth of common stock to employees who exercised stock options. At the end of 2010, the common stock account reports a balance of $10,668 million. Apple's second stockholders' equity component is retained earnings. It totals $23,353 mil- lion at the start of fiscal 2010. During the year, it increased by $14,013 million from net income. Apple's retained earnings do not decrease for dividends because Apple pays no dividends; it also reports $(197) million of miscellaneous adjustments. The balance of retained earnings at year-end is $37,169 million.
Image of page 14
Image of page 15
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern