Financial Accounting with International Financial Reporting Standards by Jerry J. Weygandt

CHAPTER 1
Accounting in Action

The Chapter Preview describes the purpose of the chapter and highlights major topics.
Chapter Preview
The following Feature Story highlights the importance of having good financial information and knowing how
to use it to make effective business decisions. Whatever your pursuits or occupation, the need for financial
information is inescapable. You cannot earn a living, spend money, buy on credit, make an investment, or pay
taxes without receiving, using, or dispensing financial information. Good decision-making depends on good
information.
The Feature Story helps you picture how the chapter topic relates to the real world of accounting and business.
Feature Story
Knowing the Numbers
Many students who take this course do not plan to be accountants. If you are in that group, you might be
thinking, “If I’m not going to be an accountant, why do I need to know accounting?” In response, consider the
quote from Harold Geneen, the former chairman of a major international company: “To be good at your
business, you have to know the numbers—cold.”
Success in any business comes back to the numbers. You will rely on them to make decisions, and managers
will use them to evaluate your performance. That is true whether your job involves marketing, production,
management, or information systems.
In business, accounting is the means for communicating the numbers. If you don’t know how to read financial
statements, you cannot really know your business.

Many companies spend significant resources teaching their employees basic accounting so that they can read
financial statements and understand how their actions affect the company’s financial results. Employers need
managers in all areas of the company to be “financially literate.”
Taking this course will go a long way to making you financially literate. In this text, you will learn how to read
and prepare financial statements, and how to use basic tools to evaluate financial results.
Appendices A, B, and C of this text provide real financial statements of three companies from different
countries that report using International Financial Reporting Standards (IFRS): Taiwan Semiconductor
Manufacturing Company (TSMC) Ltd. (TWN), Nestlé SA (CHE), and Delfi Limited (SGP). Throughout this
text, we increase your familiarity with financial reporting by providing numerous references, questions, and
exercises that encourage you to explore these financial statements. In addition, we encourage you to visit each
company’s website where you can view its complete annual report.
Even though these three companies are based in three different countries, they all follow IFRS. This means
they all follow the same basic accounting principles. As a result, their financial statements are very similar.
Therefore, by learning these basic principles as presented in this text, you will be well equipped to begin
understanding the financial results of companies around the world.
The Chapter Outline presents the chapter’s topics and subtopics, as well as practice opportunities.

Financial Accounting with International Financial Reporting Standards by Jerry J. Weygandt