8T H E D I T I O N
Darrell Herauf, CPA, CA, CGA
Carleton University
Murray W. Hilton, FCPA, FCA
University of Manitoba
ANSWERSHEET
WWW.TEX-CETERA.COM
, Modern Advanced Accounting in Canada
Eighth Edition
Copyright © 2016, 2013, 2010, 2008, 2005, 2003, 2000, 1996 by McGraw-Hill Ryerson Limited. All rights reserved.
No part of this publication may be reproduced or transmitted in any form or by any means, or stored in a data
base or retrieval system, without the prior written permission of McGraw-Hill Ryerson Limited, or in the case of
photocopying or other reprographic copying, a licence from The Canadian Copyright Licensing Agency (Access
Copyright). For an Access Copyright licence, visit www.accesscopyright.ca or call toll-free to 1-800-893-5777.
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a web site does not
indicate an endorsement by the authors or McGraw-Hill Ryerson, and McGraw-Hill Ryerson does not guarantee the
accuracy of the information presented at these sites.
ISBN-13: 978-1-25-908755-4
ISBN-10: 1-25-908755-7
1 2 3 4 5 6 7 8 9 0 WEB 1 9 8 7 6
Printed and bound in Canada.
Care has been taken to trace ownership of copyright material contained in this text; however, the publisher will
welcome any information that enables them to rectify any reference or credit for subsequent editions.
Director of Product Management: Rhondda McNabb
Product Manager: Keara Emmett
Executive Marketing Manager: Joy Armitage Taylor
Product Developer: Amy Rydzanicz
Senior Product Team Associate: Stephanie Giles
Supervising Editor: Jessica Barnoski
Photo/Permissions Editor: Nadine Bachan, MRM Associates
Copy Editor: Rodney Rawlings
Plant Production Coordinator: Sarah Strynatka
Manufacturing Production Coordinator: Sheryl MacAdam
Cover Design: Liz Harasymczuk
Cover Image: J.A. Kraulis/Masterfile
Interior Design: Liz Harasymczuk
Page Layout: SPi Global
Printer: Webcom, Ltd.
ANSWERSHEET
WWW.TEX-CETERA.COM
, About the Authors
Darrell Herauf, CPA, CA, CGA
Darrell Herauf teaches graduate and undergraduate courses in financial
accounting at the Eric Sprott School of Business, Carleton University. A
Chartered Professional Accountant with a business degree from the University
of Saskatchewan, this co-author of Modern Advanced Accounting in Canada
has also been the author of test banks and reviewer for several financial accounting
textbooks. He is the recipient of numerous teaching awards, and participates on
many committees at the university. He has been active in faculty administration,
having previously served as Accounting Area Coordinator and as Acting Director
of the Master of Accounting Program. Darrell has been involved in professional
accounting education at the Chartered Professional Accountants of Ontario for
over 30 years in a variety of roles, including teaching, developing case/program
material, and serving as a member of the Examinations subcommittee. For
28 years, he has been involved with the Certified General Accountants
Association of Canada as national examiner, course author, and consultant.
For relaxation, he enjoys cycling and skating.
Murray W. Hilton, FCPA, FCA
Murray Hilton holds the rank of Senior Scholar at the University of Manitoba
where he has continued to teach in the MBA programs since his retirement in
2002. For 35 years, he was Professor of Accounting at the university’s Asper
School of Business, teaching graduate and undergraduate courses in financial
accounting. A Chartered Professional Accountant with business degrees from
the University of Saskatchewan and Oregon State University, he has published
five advanced accounting books. In addition, he has been active in university
and faculty administration, having previously served as Head of the Department
of Accounting and Finance and as Director of the Master of Accountancy
Program. He is currently the Director of the Centre for Accounting Research and
Education. Murray has also been very involved in the accounting profession,
teaching CA and CMA courses for many years, and serving on numerous
national and provincial committees of both accounting bodies. He has on two
separate occasions been a member of the National Examination Board of the
Society of Management Accountants of Canada. In 1991, he received the FCA
designation from the Institute of Chartered Accountants of Manitoba, and in 1994
he was made an honorary member of the Society of Management Accountants of
Manitoba. For relaxation, he enjoys reading, golfing, and fishing.
ANSWERSHEET iii
WWW.TEX-CETERA.COM
, Contents in Brief
Preface ix
CHAPTER 1 Conceptual and Case Analysis Frameworks for Financial Reporting 1
CHAPTER 2 Investments in Equity Securities 62
CHAPTER 3 Business Combinations 99
CHAPTER 4 Consolidation of Non–Wholly Owned Subsidiaries 163
CHAPTER 5 Consolidation Subsequent to Acquisition Date 221
CHAPTER 6 Intercompany Inventory and Land Profits 319
CHAPTER 7 (A) Intercompany Profits in Depreciable Assets (B) Intercompany
Bondholdings 388
CHAPTER 8 Consolidated Cash Flows and Changes in Ownership 466
CHAPTER 9 Other Consolidation Reporting Issues 541
CHAPTER 10 Foreign Currency Transactions 612
CHAPTER 11 Translation and Consolidation of Foreign Operations 676
CHAPTER 12 Accounting for Not-for-Profit and Public Sector Organizations 758
Index IN-1
ANSWERSHEET
iv
WWW.TEX-CETERA.COM
Darrell Herauf, CPA, CA, CGA
Carleton University
Murray W. Hilton, FCPA, FCA
University of Manitoba
ANSWERSHEET
WWW.TEX-CETERA.COM
, Modern Advanced Accounting in Canada
Eighth Edition
Copyright © 2016, 2013, 2010, 2008, 2005, 2003, 2000, 1996 by McGraw-Hill Ryerson Limited. All rights reserved.
No part of this publication may be reproduced or transmitted in any form or by any means, or stored in a data
base or retrieval system, without the prior written permission of McGraw-Hill Ryerson Limited, or in the case of
photocopying or other reprographic copying, a licence from The Canadian Copyright Licensing Agency (Access
Copyright). For an Access Copyright licence, visit www.accesscopyright.ca or call toll-free to 1-800-893-5777.
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a web site does not
indicate an endorsement by the authors or McGraw-Hill Ryerson, and McGraw-Hill Ryerson does not guarantee the
accuracy of the information presented at these sites.
ISBN-13: 978-1-25-908755-4
ISBN-10: 1-25-908755-7
1 2 3 4 5 6 7 8 9 0 WEB 1 9 8 7 6
Printed and bound in Canada.
Care has been taken to trace ownership of copyright material contained in this text; however, the publisher will
welcome any information that enables them to rectify any reference or credit for subsequent editions.
Director of Product Management: Rhondda McNabb
Product Manager: Keara Emmett
Executive Marketing Manager: Joy Armitage Taylor
Product Developer: Amy Rydzanicz
Senior Product Team Associate: Stephanie Giles
Supervising Editor: Jessica Barnoski
Photo/Permissions Editor: Nadine Bachan, MRM Associates
Copy Editor: Rodney Rawlings
Plant Production Coordinator: Sarah Strynatka
Manufacturing Production Coordinator: Sheryl MacAdam
Cover Design: Liz Harasymczuk
Cover Image: J.A. Kraulis/Masterfile
Interior Design: Liz Harasymczuk
Page Layout: SPi Global
Printer: Webcom, Ltd.
ANSWERSHEET
WWW.TEX-CETERA.COM
, About the Authors
Darrell Herauf, CPA, CA, CGA
Darrell Herauf teaches graduate and undergraduate courses in financial
accounting at the Eric Sprott School of Business, Carleton University. A
Chartered Professional Accountant with a business degree from the University
of Saskatchewan, this co-author of Modern Advanced Accounting in Canada
has also been the author of test banks and reviewer for several financial accounting
textbooks. He is the recipient of numerous teaching awards, and participates on
many committees at the university. He has been active in faculty administration,
having previously served as Accounting Area Coordinator and as Acting Director
of the Master of Accounting Program. Darrell has been involved in professional
accounting education at the Chartered Professional Accountants of Ontario for
over 30 years in a variety of roles, including teaching, developing case/program
material, and serving as a member of the Examinations subcommittee. For
28 years, he has been involved with the Certified General Accountants
Association of Canada as national examiner, course author, and consultant.
For relaxation, he enjoys cycling and skating.
Murray W. Hilton, FCPA, FCA
Murray Hilton holds the rank of Senior Scholar at the University of Manitoba
where he has continued to teach in the MBA programs since his retirement in
2002. For 35 years, he was Professor of Accounting at the university’s Asper
School of Business, teaching graduate and undergraduate courses in financial
accounting. A Chartered Professional Accountant with business degrees from
the University of Saskatchewan and Oregon State University, he has published
five advanced accounting books. In addition, he has been active in university
and faculty administration, having previously served as Head of the Department
of Accounting and Finance and as Director of the Master of Accountancy
Program. He is currently the Director of the Centre for Accounting Research and
Education. Murray has also been very involved in the accounting profession,
teaching CA and CMA courses for many years, and serving on numerous
national and provincial committees of both accounting bodies. He has on two
separate occasions been a member of the National Examination Board of the
Society of Management Accountants of Canada. In 1991, he received the FCA
designation from the Institute of Chartered Accountants of Manitoba, and in 1994
he was made an honorary member of the Society of Management Accountants of
Manitoba. For relaxation, he enjoys reading, golfing, and fishing.
ANSWERSHEET iii
WWW.TEX-CETERA.COM
, Contents in Brief
Preface ix
CHAPTER 1 Conceptual and Case Analysis Frameworks for Financial Reporting 1
CHAPTER 2 Investments in Equity Securities 62
CHAPTER 3 Business Combinations 99
CHAPTER 4 Consolidation of Non–Wholly Owned Subsidiaries 163
CHAPTER 5 Consolidation Subsequent to Acquisition Date 221
CHAPTER 6 Intercompany Inventory and Land Profits 319
CHAPTER 7 (A) Intercompany Profits in Depreciable Assets (B) Intercompany
Bondholdings 388
CHAPTER 8 Consolidated Cash Flows and Changes in Ownership 466
CHAPTER 9 Other Consolidation Reporting Issues 541
CHAPTER 10 Foreign Currency Transactions 612
CHAPTER 11 Translation and Consolidation of Foreign Operations 676
CHAPTER 12 Accounting for Not-for-Profit and Public Sector Organizations 758
Index IN-1
ANSWERSHEET
iv
WWW.TEX-CETERA.COM
