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 Financial Accounting and Reporting is the most up to date text on the market. Now fully updated in its fourteenth
edition, it includes extensive coverage of International Accounting Standards (IAS) and International Financial
Fourteenth
Edition
Fourteenth Edition
Reporting Standards (IFRS).

FINANCIAL ACCOUNTING

AND REPORTING
FINANCIAL ACCOUNTING
This market-leading text offers students a clear, well-structured and comprehensive treatment of the subject.
Supported by illustrations and exercises, the book provides a strong balance of theoretical and conceptual

AND REPORTING
coverage. Students using this book will gain the knowledge and skills to help them apply current standards,
and critically appraise the underlying concepts and financial reporting methods.

Financial Accounting and Reporting offers:

• Academic rigour combined with an engaging and accessible style
• Coverage of International Financial Reporting Standards
• Illustrations taken from real published accounts
• An excellent range of review questions
•
•
•
Extensive references
A section on the analysis of accounts
Chapters covering such issues as corporate governance, ethics and
Barry Elliott
sustainability: environmental and social reporting
Jamie Elliott
New for this edition: Substantial revisions to:
• Fully updated to May 2010 • Published financial statements
• Updated coverage of International • Regulatory and conceptual
Financial Reporting Standards frameworks
• More examples of extracts from real • Analysis of accounts
financial reports • Corporate governance
• New, additional questions and exercises • Ethical behaviour and the implication
in selected chapters for accountants

Financial Accounting and Reporting comes with MyAccountingLab,, a state of the art online
learning resource that gives students access to:
• A personalised study plan that highlights where you excel and where you need to improve so
you can study more efficiently
• Practice problems with hundreds of different variables which allow you to practise over and
over again with no repetition

Visit www.myaccountinglab.com to utilise these online resources.

For more information on how to register see inside the book.

Barry Elliott is a training consultant. He has extensive teaching experience at undergraduate, postgraduate
and professional levels in China, Hong Kong, New Zealand and Singapore. He has wide experience as an external

Elliott
Elliott
examiner both in higher education and at all levels of professional education.

Jamie Elliott is a Director with Deloitte. Prior to this he has lectured at university on undergraduate degree
programmes and as an assistant professor on MBA and Executive programmes at the London Business School.

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Financial Accounting
and Reporting
We work with leading authors to develop the
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Financial Accounting
and Reporting
FOURTEENTH EDITION

Barry Elliott and Jamie Elliott

Openmirrors.com

Pearson Education Limited

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First published 1993

Second edition 1996
Third edition 1999
Fourth edition 2000
Fifth edition 2001
Sixth edition 2002
Seventh edition 2003
Eighth edition 2004
Ninth edition 2005
Tenth edition 2006
Eleventh edition 2007
Twelfth edition 2008
Thirteenth edition 2009
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ISBN: 978-0-273-74444-3

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Typeset in 10/12 Ehrhardt MT by 35

Printed by Ashford Colour Press Ltd., Gosport
Openmirrors.com

Brief contents

Preface and acknowledgements xx

Guided tour of MyAccountingLab xxv

Part 1
INCOME AND ASSET VALUE MEASUREMENT SYSTEMS 1

1 Accounting and reporting on a cash flow basis 3

2 Accounting and reporting on an accrual accounting basis 22
3 Income and asset value measurement: an economist’s approach 40
4 Accounting for price-level changes 59

Part 2
REGULATORY FRAMEWORK – AN ATTEMPT TO ACHIEVE
UNIFORMITY 99

5 Financial reporting – evolution of global standards 101

6 Concepts – evolution of a global conceptual framework 129
7 Ethical behaviour and implications for accountants 156
8 Preparation of statements of comprehensive income and financial position 186
9 Annual Report: additional financial statements 223

Part 3 Openmirrors.com
STATEMENT OF FINANCIAL POSITION – EQUITY, LIABILITY
AND ASSET MEASUREMENT AND DISCLOSURE 255

10 Share capital, distributable profits and reduction of capital 257

11 Off balance sheet finance 283
12 Financial instruments 312
13 Employee benefits 343
14 Taxation in company accounts 375
15 Property, plant and equipment (PPE) 404
16 Leasing 441
17 R&D; goodwill; intangible assets and brands 461
18 Inventories 497
19 Construction contracts 523
vi • Brief Contents

Part 4
CONSOLIDATED ACCOUNTS 547

20 Accounting for groups at the date of acquisition 549

21 Preparation of consolidated statements of financial position after the date
of acquisition 568
22 Preparation of consolidated statements of comprehensive income,
changes in equity and cash flows 583
23 Accounting for associates and joint ventures 603
24 Accounting for the effects of changes in foreign exchange rates under IAS 21 623

Part 5
INTERPRETATION 639

25 Earnings per share 641

26 Statements of cash flows 668
27 Review of financial ratio analysis 696
28 Analytical analysis – selective use of ratios 736
29 An introduction to financial reporting on the Internet 782

Part 6
ACCOUNTABILITY 799

30 Corporate governance 801

31 Sustainability – environmental and social reporting 838

Index 884
Full contents

Preface and acknowledgements xx

Guided tour of MyAccountingLab xxv

Part 1
INCOME AND ASSET VALUE MEASUREMENT SYSTEMS 1

1 Accounting and reporting on a cash flow basis 3

1.1 Introduction 3
1.2 Shareholders 3
1.3 What skills does an accountant require in respect of external reports? 4
1.4 Managers 4
1.5 What skills does an accountant require in respect of internal reports? 5
1.6 Procedural steps when reporting to internal users 5
1.7 Agency costs 8
1.8 Illustration of periodic financial statements prepared under the cash
flow concept to disclose realised operating cash flows 8
1.9 Illustration of preparation of statement of financial position 12
1.10 Treatment of non-current assets in the cash flow model 14
1.11 What are the characteristics of these data that make them reliable? 15
1.12 Reports to external users 16
Summary 16
Review questions 17
Exercises 18
References 21

2 Accounting and reporting on an accrual accounting basis 22

2.1 Introduction 22
2.2 Historical cost convention 23
2.3 Accrual basis of accounting 24
2.4 Mechanics of accrual accounting – adjusting cash receipts and payments 24
2.5 Subjective judgements required in accrual accounting – adjusting cash
receipts in accordance with lAS 18 25
2.6 Subjective judgements required in accrual accounting – adjusting cash
payments in accordance with the matching principle 27
2.7 Mechanics of accrual accounting – the statement of financial position 28
2.8 Reformatting the statement of financial position 28
viii • Full Contents

2.9 Accounting for the sacrifice of non-current assets 29

2.10 Reconciliation of cash flow and accrual accounting data 32
Summary 34
Review questions 34
Exercises 35
References 38

3 Income and asset value measurement: an economist’s

approach 40
3.1 Introduction 40
3.2 Role and objective of income measurement 40
3.3 Accountant’s view of income, capital and value 43
3.4 Critical comment on the accountant’s measure 46
3.5 Economist’s view of income, capital and value 47
3.6 Critical comment on the economist’s measure 53
3.7 Income, capital and changing price levels 53
Summary 55
Review questions 55
Exercises 56
References 57
Bibliography 58

4 Accounting for price-level changes 59

4.1 Introduction 59
4.2 Review of the problems of historical cost accounting (HCA) 59
4.3 Inflation accounting 60
4.4 The concepts in principle 60
4.5 The four models illustrated for a company with cash purchases
and sales 61
4.6 Critique of each model 65
4.7 Operating capital maintenance – a comprehensive example 68
4.8 Critique of CCA statements 79
4.9 The ASB approach 81
4.10 The IASC/IASB approach 83
4.11 Future developments 84
Summary 86
Review questions 87
Exercises 88
References 97
Bibliography 97

Part 2
REGULATORY FRAMEWORK – AN ATTEMPT TO
ACHIEVE UNIFORMITY 99

5 Financial reporting – evolution of global standards 101

5.1 Introduction 101
5.2 Why do we need financial reporting standards? 101
5.3 Why do we need standards to be mandatory? 102
5.4 Arguments in support of standards 104
 Full Contents • ix

5.5 Arguments against standards 104

5.6 Standard setting and enforcement in the UK under the Financial
Reporting Council (FRC) 105
5.7 The Accounting Standards Board (ASB) 106
5.8 The Financial Reporting Review Panel (FRRP) 106
5.9 Standard setting and enforcement in the US 108
5.10 Why have there been differences in financial reporting? 109
5.11 Efforts to standardise financial reports 113
5.12 What is the impact of changing to IFRS? 117
5.13 Progress towards adoption by the USA of international standards 118
5.14 Advantages and disadvantages of global standards for publicly
accountable entities 119
5.15 How do reporting requirements differ for non-publicly accountable
entities? 119
5.16 Evaluation of effectiveness of mandatory regulations 123
5.17 Move towards a conceptual framework 125
Summary 125
Review questions 126
Exercises 127
References 127

6 Concepts – evolution of a global conceptual framework 129

6.1 Introduction 129
6.2 Historical overview of the evolution of financial accounting theory 130
6.3 FASB Concepts Statements 134
6.4 IASC Framework for the Presentation and Preparation of
Financial Statements 137
6.5 ASB Statement of Principles 1999 138
6.6 Conceptual framework developments 149
Summary 150
Review questions 152
Exercises 153
References 154

7 Ethical behaviour and implications for accountants 156

7.1 Introduction 156
7.2 The meaning of ethical behaviour 156
7.3 Financial reports – what is the link between law, corporate
governance, corporate social responsibility and ethics? 158
7.4 What does the accounting profession mean by ethical behaviour? 159
7.5 Implications of ethical values for the principles versus rules based
approaches to accounting standards 161
7.6 The principles based approach and ethics 163
7.7 The accounting standard-setting process and ethics 164
7.8 The IFAC Code of Ethics for Professional Accountants 165
7.9 Ethics in the accountants’ work environment – a research report 168
7.10 Implications of unethical behaviour for financial reports 169
7.11 Company codes of ethics 172
7.12 The increasing role of whistle-blowing 174
7.13 Why should students learn ethics? 178
Openmirrors.com
x • Full Contents

Summary 179
Review questions 179
Exercises 182
References 184

8 Preparation of statements of comprehensive income and

financial position 186
8.1 Introduction 186
8.2 The prescribed formats – the statement of comprehensive income 187
8.3 The prescribed formats – the statement of financial position 194
8.4 Statement of changes in equity 197
8.5 Has prescribing the formats meant that identical transactions are
reported identically? 198
8.6 The fundamental accounting principles underlying statements of
comprehensive income and statements of financial position 201
8.7 What is the difference between accounting principles, accounting
bases and accounting policies? 201
8.8 What does an investor need in addition to the financial statements
to make decisions? 206
Summary 210
Review questions 211
Exercises 212
References 222

9 Annual Report: additional financial statements 223

9.1 Introduction 223
9.2 The value added by segment reports 223
9.3 Detailed review and evaluation of IRFS 8 – Operating Segments 224
9.4 IFRS 5 – meaning of ‘held for sale’ 232
9.5 IFRS 5 – implications of classification as held for sale 232
9.6 Meaning and significance of ‘discontinued operations’ 233
9.7 IAS 10 – Events after the reporting period 235
9.8 Related party disclosures 237
Summary 241
Review questions 241
Exercises 242
References 253

Part 3
STATEMENT OF FINANCIAL POSITION – EQUITY,
LIABILITY AND ASSET MEASUREMENT AND
DISCLOSURE 255

10 Share capital, distributable profits and reduction of capital 257

10.1 Introduction 257
10.2 Common themes 257
10.3 Total owners’ equity: an overview 258
10.4 Total shareholders’ funds: more detailed explanation 259
10.5 Accounting entries on issue of shares 262
10.6 Creditor protection: capital maintenance concept 263
Openmirrors.com
Full Contents • xi

10.7 Creditor protection: why capital maintenance rules are necessary 264
10.8 Creditor protection: how to quantify the amounts available to meet
creditors’ claims 264
10.9 Issued share capital: minimum share capital 265
10.10 Distributable profits: general considerations 265
10.11 Distributable profits: how to arrive at the amount using
relevant accounts 267
10.12 When may capital be reduced? 267
10.13 Writing off part of capital which has already been lost and is not
represented by assets 268
10.14 Repayment of part of paid-in capital to shareholders or cancellation
of unpaid share capital 273
10.15 Purchase of own shares 274
Summary 277
Review questions 277
Exercises 277
References 282

11 Off balance sheet finance 283

11.1 Introduction 283
11.2 Traditional statements – conceptual changes 283
11.3 Off balance sheet finance – its impact 284
11.4 Illustrations of the application of substance over form 286
11.5 Provisions – their impact on the statement of financial position 289
11.6 ED IAS 37 Non-financial Liabilities 297
11.7 ED/2010/1 Measurement of Liabilities in IAS 37 303
11.8 Special purpose entities (SPEs) – lack of transparency 304
11.9 Impact of converting to IFRS 305
Summary 306
Review questions 307
Exercises 308
References 311

12 Financial instruments 312

12.1 Introduction 312
12.2 Financial instruments – the IASB’s problem child 312
12.3 IAS 32 Financial Instruments: Disclosure and Presentation 315
12.4 IAS 39 Financial Instruments: Recognition and Measurement 320
12.5 IFRS 7 Financial Statement Disclosures 330
12.6 Financial instruments developments 333
Summary 336
Review questions 337
Exercises 338
References 342

13 Employee benefits 343

13.1 Introduction 343
13.2 Greater employee interest in pensions 343
13.3 Financial reporting implications 344
13.4 Types of scheme 344
Openmirrors.com
xii • Full Contents

13.5 Defined contribution pension schemes 346

13.6 Defined benefit pension schemes 347
13.7 IAS 19 (revised) Employee Benefits 349
13.8 The liability for pension and other post-retirement costs 349
13.9 The statement of comprehensive income 352
13.10 Comprehensive illustration 353
13.11 Plan curtailments and settlements 355
13.12 Multi-employer plans 355
13.13 Disclosures 356
13.14 Other long-service benefits 356
13.15 Short-term benefits 357
13.16 Termination benefits 358
13.17 IFRS 2 Share-Based Payment 359
13.18 Scope of IFRS 2 360
13.19 Recognition and measurement 360
13.20 Equity-settled share-based payments 360
13.21 Cash-settled share-based payments 363
13.22 Transactions which may be settled in cash or shares 363
13.23 Transitional provisions 364
13.24 IAS 26 Accounting and Reporting by Retirement Benefit Plans 364
Summary 367
Review questions 368
Exercises 370
References 374

14 Taxation in company accounts 375

14.1 Introduction 375
14.2 Corporation tax 375
14.3 Corporation tax systems – the theoretical background 376
14.4 Corporation tax systems – avoidance and evasion 377
14.5 Corporation tax – the system from 6 April 1999 380
14.6 IFRS and taxation 381
14.7 IAS 12 – accounting for current taxation 382
14.8 Deferred tax 384
14.9 FRS 19 (the UK standard on deferred taxation) 392
14.10 A critique of deferred taxation 393
14.11 Examples of companies following IAS 12 396
14.12 Value added tax (VAT) 396
Summary 399
Review questions 399
Exercises 400
References 402

15 Property, plant and equipment (PPE) 404

15.1 Introduction 404
15.2 PPE – concepts and the relevant IASs and IFRSs 404
15.3 What is PPE? 405
15.4 How is the cost of PPE determined? 406
15.5 What is depreciation? 408
15.6 What are the constituents in the depreciation formula? 411
Openmirrors.com
Full Contents • xiii

15.7 How is the useful life of an asset determined? 411

15.8 Residual value 412
15.9 Calculation of depreciation 412
15.10 Measurement subsequent to initial recognition 416
15.11 IAS 36 Impairment of Assets 418
15.12 IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations 424
15.13 Disclosure requirements 424
15.14 Government grants towards the cost of PPE 425
15.15 Investment properties 427
15.16 Effect of accounting policy for PPE on the interpretation of the
financial statements 428
Summary 430
Review questions 430
Exercises 431
References 440

16 Leasing 441
16.1 Introduction 441
16.2 Background to leasing 441
16.3 Why was the IAS 17 approach so controversial? 443
16.4 IAS 17 – classification of a lease 444
16.5 Accounting requirements for operating leases 445
16.6 Accounting requirements for finance leases 446
16.7 Example allocating the finance charge using the sum of the
digits method 447
16.8 Accounting for the lease of land and buildings 451
16.9 Leasing – a form of off balance sheet financing 452
16.10 Accounting for leases – a new approach 453
16.11 Accounting for leases by lessors 455
Summary 456
Review questions 456
Exercises 457
References 460

17 R&D; goodwill; intangible assets and brands 461

17.1 Introduction 461
17.2 Accounting treatment for research and development 461
17.3 Research and development 461
17.4 Why is research expenditure not capitalised? 462
17.5 Capitalising development costs 463
17.6 The judgements to be made when deciding whether to capitalise
development costs 464
17.7 Disclosure of R&D 465
17.8 Goodwill 466
17.9 The accounting treatment of goodwill 466
17.10 Critical comment on the various methods that have been used to
account for goodwill 468
17.11 Negative goodwill 470
17.12 Intangible assets 471
17.13 Brand accounting 474
 xiv • Full Contents

17.14 Justifications for reporting all brands as assets 475

17.15 Accounting for acquired brands 476
17.16 Emissions trading 477
17.17 Intellectual property 479
17.18 Review of implementation of IFRS 3 482
Summary 484
Review questions 485
Exercises 487
References 495

18 Inventories 497
18.1 Introduction 497
18.2 Inventory defined 497
18.3 The controversy 498
18.4 IAS 2 Inventories 499
18.5 Inventory valuation 500
18.6 Work-in-progress 507
18.7 Inventory control 509
18.8 Creative accounting 510
18.9 Audit of the year-end physical inventory count 512
18.10 Published accounts 513
18.11 Agricultural activity 514
Summary 517
Review questions 518
Exercises 519
References 522

19 Construction contracts 523

19.1 Introduction 523
19.2 The accounting issue for construction contracts 523
19.3 Identification of contract revenue 525
19.4 Identification of contract costs 525
19.5 Recognition of contract revenue and expenses 526
19.6 Public–private partnerships (PPPs) 532
Summary 538
Review questions 538
Exercises 539
References 545

Part 4
CONSOLIDATED ACCOUNTS 547

20 Accounting for groups at the date of acquisition 549

20.1 Introduction 549
20.2 The definition of a group 549
20.3 Consolidated accounts and some reasons for their preparation 549
20.4 The definition of control 551
20.5 Alternative methods of preparing consolidated accounts 552
20.6 The treatment of positive goodwill 554
20.7 The treatment of negative goodwill 554

Openmirrors.com
 Full Contents • xv

20.8 The comparison between an acquisition by cash and an exchange

of shares 555
20.9 Non-controlling interests 555
20.10 The treatment of differences between a subsidiary’s fair value and
book value 558
20.11 How to calculate fair values 559
Summary 560
Review questions 561
Exercises 562
References 567

21 Preparation of consolidated statements of financial position

after the date of acquisition 568
21.1 Introduction 568
21.2 Pre- and post-acquisition profits/losses 568
21.3 Inter-company balances 571
21.4 Unrealised profit on inter-company sales 572
21.5 Provision for unrealised profit affecting a non-controlling interest 577
21.6 Uniform accounting policies and reporting dates 577
21.7 How is the investment in subsidiaries reported in the parent’s own
statement of financial position? 578
Summary 578
Review questions 578
Exercises 578
References 582

22 Preparation of consolidated statements of comprehensive

income, changes in equity and cash flows 583
22.1 Introduction 583
22.2 Preparation of a consolidated statement of comprehensive income –
the Ante Group 583
22.3 The statement of changes in equity (SOCE) 586
22.4 Other consolidation adjustments 586
22.5 Dividends or interest paid by the subsidiary out of
pre-acquisition profits 587
22.6 A subsidiary acquired part of the way through the year 588
22.7 Published format statement of comprehensive income 590
22.8 Consolidated statements of cash flows 591
Summary 592
Review questions 593
Exercises 593
References 602

23 Accounting for associates and joint ventures 603

23.1 Introduction 603
23.2 Definitions of associates and of significant influence 603
23.3 The treatment of associated companies in consolidated accounts 604
23.4 The Brill Group – the equity method illustrated 604
23.5 The treatment of provisions for unrealised profits 606
23.6 The acquisition of an associate part-way through the year 606
23.7 Joint ventures 608
 xvi • Full Contents

Summary 610
Review questions 610
Exercises 611
References 622
24 Accounting for the effects of changes in foreign exchange
rates under IAS 21 623
24.1 Introduction 623
24.2 The difference between conversion and translation and the definition
of a foreign currency transaction 623
24.3 The functional currency 624
24.4 The presentation currency 624
24.5 Monetary and non-monetary items 624
24.6 The rules on the recording of foreign currency transactions carried
out directly by the reporting entity 625
24.7 The treatment of exchange differences on foreign
currency transactions 625
24.8 Foreign exchange transactions in the individual accounts of companies
illustrated – Boil plc 625
24.9 The translation of the accounts of foreign operations where the
functional currency is the same as that of the parent 627
24.10 The use of a presentation currency other than the functional currency 627
24.11 Granby Ltd illustration 628
24.12 Granby Ltd illustration continued 629
24.13 Implications of IAS 21 632
24.14 Critique of use of presentation currency 632
Summary 633
Review questions 633
Exercises 633
References 637
Part 5
INTERPRETATION 639
25 Earnings per share 641
25.1 Introduction 641
25.2 Why is the earnings per share figure important? 641
25.3 How is the EPS figure calculated? 642
25.4 The use to shareholders of the EPS 643
25.5 Illustration of the basic EPS calculation 644
25.6 Adjusting the number of shares used in the basic EPS calculation 645
25.7 Rights issues 647
25.8 Adjusting the earnings and number of shares used in the diluted
EPS calculation 652
25.9 Procedure where there are several potential dilutions 654
25.10 Exercise of conversion rights during financial year 656
25.11 Disclosure requirements of IAS 33 656
25.12 The Improvement Project 659
25.13 Convergence project 659
Summary 659
Review questions 660

Openmirrors.com
 Full Contents • xvii

Exercises 661
References 667

26 Statements of cash flows 668

26.1 Introduction 668
26.2 Development of statements of cash flows 668
26.3 Applying IAS 7 (revised) Statements of Cash Flows 670
26.4 IAS 7 (revised) format of statements of cash flows 672
26.5 Consolidated statements of cash flows 677
26.6 Analysing statements of cash flows 679
26.7 Critique of cash flow accounting 684
Summary 685
Review questions 685
Exercises 686
References 695

27 Review of financial ratio analysis 696

27.1 Introduction 696
27.2 Initial impressions 696
27.3 What are accounting ratios? 697
27.4 Six key ratios 698
27.5 Illustrating the calculation of the six key ratios 703
27.6 Description of subsidiary ratios 706
27.7 Comparative ratios: inter-firm comparisons and industry averages 715
27.8 Limitations of ratio analysis 718
27.9 Earnings before interest, tax, depreciation and amortisation (EBITDA)
used for management control purposes 720
Summary 722
Review questions 722
Exercises 723
References 735

28 Analytical analysis – selective use of ratios 736

28.1 Introduction 736
28.2 Improvement of information for shareholders 736
28.3 Disclosure of risks and focus on relevant ratios 738
28.4 Shariah compliant companies – why ratios are important 745
28.5 Ratios set by lenders in debt covenants 747
28.6 Predicting corporate failure 749
28.7 Performance related remuneration – shareholder returns 756
28.8 Valuing shares of an unquoted company – quantitative process 760
28.9 Professional risk assessors 764
Summary 766
Review questions 767
Exercises 769
References 780

29 An introduction to financial reporting on the Internet 782

29.1 Introduction 782
29.2 The reason for the development of a business reporting language 782
 xviii • Full Contents

29.3 Reports and the flow of information pre-XBRL 783

29.4 What are HTML, XML and XBRL? 784
29.5 Reports and the flow of information post-XBRL 785
29.6 XBRL and the IASB 786
29.7 Why should companies adopt XBRL? 786
29.8 What is needed to use XBRL for outputting information? 787
29.9 What is needed when receiving XBRL output information? 789
29.10 Progress of XBRL development for internal accounting 794
29.11 Further study 794
Summary 795
Review questions 795
Exercises 796
References 796
Bibliography 797

Part 6
ACCOUNTABILITY 799

30 Corporate governance 801

30.1 Introduction 801
30.2 The concept 801
30.3 Corporate governance effect on corporate behaviour 802
30.4 Pressures on good governance behaviour vary over time 803
30.5 Types of past unethical behaviour 804
30.6 Different jurisdictions have different governance priorities 805
30.7 The effect on capital markets of good corporate governance 806
30.8 The role of accounting in corporate governance 807
30.9 External audits in corporate governance 809
30.10 Corporate governance in relation to the board of directors 814
30.11 Executive remuneration 814
30.12 Market forces and corporate governance 817
30.13 Risk management 818
30.14 Corporate governance, legislation and codes 820
30.15 Corporate governance – the UK experience 822
Summary 832
Review questions 832
Exercises 834
References 836

31 Sustainability – environmental and social reporting 838

31.1 Introduction 838
31.2 How financial reporting has evolved to embrace
sustainability reporting 838
31.3 The Triple Bottom Line (TBL) 839
31.4 The Connected Reporting Framework 840
31.5 IFAC Sustainability Framework 842
31.6 The accountant’s role in a capitalist industrial society 844
31.7 The accountant’s changing role 844
31.8 Sustainability – environmental reporting 845
31.9 Environmental information in the annual accounts 845

Openmirrors.com
 Full Contents • xix

31.10 Background to companies’ reporting practices 846

31.11 European Commission’s recommendations for disclosures in
annual accounts 847
31.12 Evolution of stand-alone environmental reports 848
31.13 International charters and guidelines 852
31.14 Self-regulation schemes 854
31.15 Economic consequences of environmental reporting 856
31.16 Summary on environmental reporting 857
31.17 Environmental auditing: international initiatives 858
31.18 The activities involved in an environmental audit 859
31.19 Concept of social accounting 861
31.20 Background to social accounting 863
31.21 Corporate social responsibility 866
31.22 Need for comparative data 868
31.23 International initiatives towards triple bottom line reporting 870
Summary 873
Review questions 873
Exercises 875
References 881
Bibliography 882

Index 884
Another random document with
no related content on Scribd:
 [All this while the people, to swifter and swifter music,
always more and more macabre and dissonant, have
moved ever and ever more swiftly. Now the music comes
back to a horrible parody of “I’ve been working on the
Railroad” and the movement takes shape in designs and
formal groups, large and small. And the men who made
up three cones and the fan surge over the stair and drag
Freedom down so that she is lost in the whirling mob. And
the light, broken and colorful, dies to gloom and the
movement is a movement of patterns and the music
drowns all, singing and instrumental. Then, just at the
front of the stage, just above the throne of the Chronicler,
a single ray of white light breaks upon Freedom again
and, along the upper level, the light once more lifts, and
as Freedom begins to speak, it seems to be daybreak.]
Freedom
Lost! Lost! Lost!
[The desperate cry pierces all the tumult and brings
complete silence upon the scene.]
O People, my People, my People,
Where are your wits and your hearts and your souls?
What have you done with the destiny I left you?
Fools! Fools! Fools!
[A stricken sigh goes up from the people and those about
Freedom fall upon their knees.]
Man does not seek the dream that is not his,
Nor dream the search to which he was not destined,
Nor hope for that which he does not believe.
Who would be free is free;
Who would be otherwise is otherwise.
Ever man is himself man’s enemy;
Ever man’s fear to be himself shall be
Between man and man’s liberty.
 [A murmur goes up from the people. She looks sorrowfully
and majestically over them.]
Soldiers of Freedom!
Comrades of Freedom!
Brothers of Freedom!
Children of Freedom!
Not slaves, but men!
Not sheep, but men!
Not masses, but men!
I cannot set you free who were born free.
Nor strike your shackles off who were born slaves.
Be to yourselves yourselves, the rest is glory.
[A louder murmur and many of the crowd lift their hands
to her.]
Workmen and workwomen!
Children and aged!
You were born of the past!
You are pledged to the future.
[She goes a little up among the kneeling crowd.]
Soldiers of Freedom,
Comrades of Freedom,
Brothers of Freedom,
You! You! And You!
I lead again! I live again! I love!
Who dares to follow now!
Who comes beside me, bravely and alone,
Not one of masses, but as man alone?
What, none?
Are you all masses, then?
[Some of them come eagerly up to her.]
You, have you faith?
You, are you honest?
You, is your spirit strong?
You, can you face the sun?
Why then, come on!
Come on! On! On!
I lead—Come on! Come on!
[She plunges up the slope toward the light, her own
refulgence illuminating those who come immediately after
her. The music reaches its wildest and highest point as the
crowds falling in widely behind her, begins to ascend the
slope. Freedom is seen to pause and wave the crowd on
and a great cone of humanity moves up the stair. Then
the music stops upon a tremendous major resolution and
Freedom is standing at the top of the stair at last and all
the people, their arms reached upwards to her, are spread
out below and the light is blinding. The music gives way to
a rolling of drums and from the hills come crazy voices
invoked by the wild cries and the wilder arms of Freedom
most transfigured, most blazing of all.]
Freedom
Soldiers of Freedom out of the past of the race, huzza!
A Voice
(Screaming wildly.)
Don’t shoot till you see the whites of their eyes!
Freedom
Again!
Another Voice
(Wilder and from a different position.)
If they mean to have a war let it begin here!
Freedom
Again!
Another Voice
Trust in God and keep your powder dry!
Another Voice
We have not yet begun to fight!
[Now rockets are bursting in the air, gorgeous beautiful
rockets.]
Freedom
Brothers of Freedom, out of the past of the race, your songs!
Several Voices
(Singing wildly.)
Yankee Doodle came to town,
Riding on a pony,
Stuck a feather in his hat
And called it macaroni!
Yankee Doodle....
Other Voices
I’ll fight it out on this line if it takes all summer! Give me liberty or
give me death! Liberty and Union, now and forever, one and
inseparable! Millions for defense but not one cent for tribute! A war
to end war! Don’t give up the ship! Lafayette, here we are! Too
proud to fight! In the name of the great Jehovah and the Continental
Congress!
Other Voices
John Brown’s body lies a moulding in the grave,
John Brown’s body lies a moulding in the grave,
John Brown’s body lies a moulding in the grave,
But his soul goes marching on!
Glory, glory, hallelujah!
Glory, glory....
Other Voices
Way down south in the land of cotton,
Cinnamon seed and sandy bottom,
Look away, look away, look away, look away!
That’s the land where I was born in....
Other Voices
Over there! Over there! Over there! Over there! Over there! The
Yanks are coming....
[By this the light has gone from the people and shines
only upon Freedom who turns and holds her hands out
over all the multitude. A terrific flight of rockets bursts
with a terrific explosion. Then there is absolute silence.]
Freedom
(Coming through the crowds, back down the stair.)
Children of Freedom,
Out of the mind of God,
Hear ye the truth—
Woe unto you, Scribes and Pharisees!...
Can ye grow grapes from thorns or figs from thistles?
What man, by taking thought, can add a cubit to his stature?
Woe unto you, Scribes and Pharisees!
To him that hath shall be given. From him that hath not shall be
taken away even that which he hath....
Blessed are the meek, for they shall inherit the earth....
Seek and ye shall find....
[With each line of the words of Jesus she has come a little
further down the stair. At the last, she stands above the
Chronicler’s throne and, on either side of her, two youths
kneel, who have followed her down from the Choir. When
she has come to the bottom of the slope and when the
darkness has taken all else but her figure, she turns her
back upon the audience and her hands go out as though
she evoked one further image out of the past. We see it,
as light scatters the darkness above her—the Common of
 Lexington in the cold dawn of the Glorious Morning and
the line of Minute Men drawn up across it. The Chronicler
rises.]
The Chronicler
One hundred and fifty years ago there was fought upon this place a
battle. Out of that battle came a nation and a nation’s race and a
race’s vision of freedom.
[Then the four boys from the Choir speak together as the
light goes.]
The Four Boys
The world will little note nor long remember what we say here, but it
can never forget what they did here. It is for us, the living, rather, to
be dedicated here to the unfinished work which they who fought
here have thus far so nobly advanced. It is rather for us to be here
dedicated to the great task remaining before us—that from these
honored dead we take increased devotion; that we here highly
resolve that these dead shall not have died in vain; that this nation,
under God, shall have a new birth of Freedom; and that government
of the people, by the people, for the people shall not perish from the
earth.
[The darkness is now complete. The Chronicler has closed
his book. In the hills, a bugle blows taps. The play is
finished.]
THE citizens of Lexington, the Birthplace of American Liberty,
realizing they are custodians of America’s greatest shrine, extend a
welcome to everyone, not only on the 19th of April and Pageant
Week, June 15th to 20th, 1925, but every day of the year, to visit our
battlefield, the historic buildings, and at all times to feel at home.
This historic spot belongs to the Nation, and we want all Americans
to feel they are part owners so that on leaving the town they may
have a better realization of the struggles made by our forefathers
and become better and more patriotic citizens.
 Publications for Sale by the
Lexington Historical Society
“The Battle of April 19, 1775, in Lexington, Concord, Lincoln,
Arlington, Cambridge, Somerville and Charlestown.” New Edition,
1922. By Frank Warren Coburn. Illustrated. 200 pp. Price $1.75.
“The Battle on Lexington Common, April 19, 1775,” a paper read
before the Lexington Historical Society, December 12, 1916, by
Frank Warren Coburn. Illustrated. Published in 1918. 60 pp. Price
$2.50.
“Lexington, the Birthplace of American Liberty.” A hand-book. By
Fred S. Piper. 1923. 62 pp. Price $0.50, postage 10 cents.
Hudson’s “History of Lexington.” Revised Edition. In two volumes.
1913. Vol. I, History; 583 pp. Vol. II, Genealogies; 897 pp.
Withdrawn.
“Guide Book to Hancock-Clark House.” A descriptive catalogue of the
historical collection of the Lexington Historical Society on exhibition
in the house where Hancock and Adams were sleeping when
aroused by Paul Revere. Illustrated. 24 pp. Price $0.20.
“Epitaphs in the Old Burying Grounds, Lexington.” By Francis Brown,
M.D. With map. 8vo. About 200 pp. Price $1.00.
“Proceedings of the Lexington Historical Society.” Historical and
Memorial papers read before the Society. Illustrated. Vols. I, II, III,
IV. 8vo. About 250 pp. each. Price $1.00 per volume. Vol. I out of
print.
Note that Vol. II, out of print for many years, can now be supplied.
“A Sketch of the Munroe Clan.” 1900. By James Phinney Munroe.
Paper. 75 pp. Price $0.50. Out of print.
“Lexington, Mass., Record of Births, Marriages and Deaths” to
January 1, 1898. Cloth. 484 pp. Sent on receipt of 25 cents postage.
“Two Hundredth Anniversary of the Incorporation of the Town of
Lexington.” 1913. Proceedings and Addresses. Paper. 37 pp. Price
$0.20.
“Lexington Historical Society. A sketch of its origin and
achievements.” 1886-1912. By Fred S. Piper. Paper. 10 pp. Price
$0.10.
“The Rev. Jonas Clark, Minister and Patriot in Lexington for 50
Years.” 1755-1805. By Rev. Charles F. Carter. 1912. 10 pp. Price
$0.10.
“Munroe Tavern—the Custodian’s Story.” 1925. 31 pp. Price $0.35.
18 Postal Card Views of Historic Lexington, 8 of which are
copyrighted including the Hancock-Clark House, Buckman Tavern,
Munroe Tavern, Minuteman Statue, interiors, etc. Price $0.03 each,
$0.45 the set.
Photographs. The Lexington Historical Society has an extensive
collection of photographs of Historic Lexington. Printed on heavy
paper (usually 7½ × 9). Price $1.25 each, postage paid.
Other volumes and Lantern Slides in preparation.
 TRANSCRIBER’S NOTE:
Obvious typographical errors have been corrected.
*** END OF THE PROJECT GUTENBERG EBOOK "LEXINGTON": A
PAGEANT-DRAMA OF THE AMERICAN FREEDOM ***

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