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Higher accounting, typically studied at the advanced undergraduate or graduate (MBA/Master’s) level, moves beyond the basic financial and managerial concepts and delves into specialized, complex areas required for large-scale corporate reporting, taxation, and decision-making.
The topics covered are generally grouped into three main areas: Advanced Financial Reporting, Specialized Management Accounting Services in Buffalo, and Advanced Taxation.
This area focuses on applying sophisticated accounting standards to complex, real-world business structures and transactions.
Business Combinations (Mergers & Acquisitions): The methods for accounting for a company acquiring another. This involves calculating and recognizing Goodwill, understanding the Consolidation of financial statements, and preparing consolidated reports as if the parent and subsidiary were one single economic entity.
Derivatives and Hedging: Accounting for complex financial instruments (futures, options, swaps) used to manage risks like interest rate or foreign currency fluctuations. This involves fair value accounting and the rigorous documentation required for hedge accounting.
Leases: Applying complex lease accounting standards (such as ASC 842 or IFRS 16) that require many operating leases to be capitalized (recorded on the balance sheet) as a Right-of-Use (ROU) Asset and a Lease Liability.
Revenue Recognition (ASC 606): In-depth study of the five-step model for recognizing revenue from contracts with customers, focusing on variable consideration, principal-versus-agent considerations, and complex multi-element contracts.
Pensions and Post-Retirement Benefits: Calculating and reporting the complex assets and liabilities related to defined benefit and defined contribution pension plans, including actuarial gains and losses.
While basic managerial accounting covers cost allocation, higher accounting focuses on strategic decision-making and performance evaluation in complex manufacturing or service environments.
Activity-Based Costing (ABC): Moving beyond traditional cost allocation to identify all significant activities and assign costs based on the actual consumption of resources by each product or service. This yields far more accurate product profitability data.
Throughput Accounting: A lean management approach that maximizes profit by optimizing the bottleneck in the production process, focusing on the rate at which the system generates money (throughput) versus inventory and operational expenses.
Variance Analysis and Control: Detailed analysis of differences between budgeted (standard) costs and actual costs for materials, labor, and overhead, often broken down into price and quantity variances to pinpoint managerial responsibility.
Transfer Pricing: Setting the price for goods or services exchanged between two separate divisions within the same large company. This is a critical management decision that impacts divisional performance evaluation and international tax strategy.
This area studies the advanced application of tax law and the complex regulatory environment.
Corporate Taxation: Deep dive into the federal and state tax laws governing corporations, including tax planning strategies, corporate tax computation, and compliance with special deductions and credits.
Partnerships and S Corporations: Specialized tax accounting for flow-through entities, which involves complex issues like basis tracking and the treatment of partners’ capital accounts.
Auditing and Assurance: While a separate discipline, advanced Accounting Services Buffalo includes the rigorous study of Auditing Standards (GAAS), internal controls (COSO framework), and risk assessment procedures used by auditors to verify the fairness of complex financial statements.