We highlight the following topics in this module o

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includes all of the typical operating accounts. We highlight the following topics in this module: o goods sold • general and administrative expenses iation expense ch and development expenses turing expenses tax expenses dinary gains and losses and losses on sales of operating assets currency translation effects inq asset write-downs income or expenses evenues esearch and development expenses tructuring expenses orne tax expenses Interest revenues and expenses Dividend revenues Gains and losses on sales of investments Investment write-downs Gains and losses on debt retirement Gains and losses on discontinued operations Allocation of profit to noncontrolling interest (previously titled "minority interest expense") Extraordinary gains and losses Earnings per share (EPS) Foreign currency translation effects ERATING INCOME COMPONENTS - 2010 income statement in Exhibit 5.2 highlights (in blue) the operating income compo- discussed in this module. We defer discussion of cost of goods sold (cost of sales) to Module ich focuses on inventories and other operating assets. Module 2 discusses items typically ::rl00e~ in selling, general and administrative (SG&A) expenses, and Module 9 addresses the ts related to acquisitions of other companies (such as amortization of intangible assets, ::= r-related in-process research and development charges, noncontrolling interest, and discon- operations). - ~Iain, a loss on the sale of equipment implies that the company did not depreciate the equipment quickly enough. - company recorded the "right" amount of depreciation over the years (that is, the amount of depreciation that )' matched the equipment's economic devaluation over time), the equipment's book value would have been _-the same as its market value and no loss would have been recorded. Thus, we treat the loss on disposal in the manner as depreciation expense-as operating. The same logic applies to write-downs of operating assets, which when the fair value of assets such as property and intangibles has declined below their book value. ial is an accounting term that means the item in question is important enough to make a difference to someone _ _ on the financial statements when making a business decision. Investors, for example, might find an item material is large enough to change their investment decision (whether to buy or sell the stock). This materiality judgment is eye of the beholder and this subjectivity makes materiality an elusive concept.
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5-5 Module 5 I Revenue Recognition and Operating Income L01 Explain revenue recognition criteria and identify transactions of special concern for analysis. 2010 Pfizer Income Statement (Millions, except per share data) $67,809 Revenues , . Costs and expenses Cost of sales . Selling, informational and administative expenses .
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