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6 Income taxes 123 8.7 Modifications to terms and conditions on which
6.1 The nature of income tax 124 equity instruments were granted 208
6.2 Differences between accounting 8.8 Cash-settled share-based payment transactions 209
profit and taxable profit 124 8.9 Disclosure 212
6.3 Accounting for income taxes 126 Summary 214
6.4 Calculation of current tax 127 Discussion questions 214
6.5 Recognition of current tax 131 References 214
6.6 Payment of tax 131 Exercises 214
6.7 Tax losses 132 Academic perspective 217
6.8 Calculation of deferred tax 133
9 Inventories 219
6.9 Recognition of deferred tax liabilities
9.1 The nature of inventories 220
and deferred tax assets 139
9.2 Measurement of inventory upon
6.10 Change of tax rates 142
initial recognition 221
6.11 Other issues 142
9.3 Determination of cost 221
6.12 Presentation in the financial statements 143
9.4 Accounting for inventory 224
6.13 Disclosures 144
9.5 End-of-period accounting 227
Summary 148
9.6 Assigning costs to inventory on sale 231
Discussion questions 148
9.7 Net realisable value 234
References 148
9.8 Recognition as an expense 236
Exercises 148
9.9 Disclosure 236
Academic perspective 153
Summary 237
7 Financial instruments 155 Discussion questions 237
7.1 Introduction 156 References 238
7.2 What is a financial instrument? 158 Exercises 238
7.3 Financial assets and financial liabilities 159 Academic perspective 243
7.4 Distinguishing financial liabilities
from equity instruments 160 10 Employee benefits 245
7.5 Compound financial instruments 163 10.1 Introduction to accounting for employee benefits 246
7.6 Interest, dividends, gains and losses 164 10.2 Scope and purpose of IAS 19 246
7.7 Financial assets and financial liabilities: scope 164 10.3 Defining employee benefits 246
7.8 Derivatives and embedded derivatives 166 10.4 Short-term employee benefits 246
7.9 Financial assets and financial liabilities: 10.5 Post-employment benefits 253
categories of financial instruments 168 10.6 Accounting for defined contribution
7.10 Financial assets and financial liabilities: post-employment plans 254
recognition criteria 171 10.7 Accounting for defined benefit
7.11 Financial assets and financial post-employment plans 255
liabilities: measurement 171 10.8 Other long-term employee benefits 263
7.12 Financial assets and financial liabilities: offsetting 181 10.9 Termination benefits 266
7.13 Hedge accounting 181 Summary 268
7.14 Disclosures 188 Discussion questions 268
Summary 194 References 268
Discussion questions 194 Exercises 269
References 194 Academic perspective 273
Exercises 194
Academic perspective 197 11 Property, plant and equipment 275
11.1 The nature of property, plant and equipment 276
8 Share-based payment 199 11.2 Initial recognition of property, plant
Introduction 200 and equipment 277
8.1 Application and scope 200 11.3 Initial measurement of property,
8.2 Cash-settled and equity-settled share-based plant and equipment 278
payment transactions 201 11.4 Measurement subsequent to initial recognition 283
8.3 Recognition 201 11.5 The cost model 283
8.4 Equity-settled share-based payment transactions 202 11.6 The revaluation model 289
8.5 Vesting 204 11.7 Choosing between the cost model and
8.6 Treatment of a reload feature 207 the revaluation model 299

vi CONTENTS
 11.8 Derecognition 300 15 Impairment of assets 417
11.9 Disclosure 301 15.1 Introduction to IAS 36 418
11.10 Investment properties 303 15.2 When to undertake an impairment test 418
Summary 305 15.3 Impairment test for an individual asset 420
Discussion questions 312 15.4 Cash-generating units — excluding goodwill 426
References 313 15.5 Cash-generating units and goodwill 430
Exercises 313 15.6 Reversal of an impairment loss 432
Academic perspective 319 15.7 Disclosure 433
12 Leases 321 Summary 434
Introduction 322 Discussion questions 438
12.1 What is a lease? 322 References 438
12.2 Classification of leases 323 Exercises 439
12.3 Classification guidance 324 Academic perspective 444
12.4 Accounting for finance leases by lessees 330
Online chapter A Exploration for and evaluation of
12.5 Accounting for finance leases by lessors 336 mineral resources
12.6 Accounting for finance leases by Online chapter B Agriculture
manufacturer or dealer lessors 341
12.7 Accounting for operating leases 342 Part 3
12.8 Accounting for sale and leaseback transactions 346
PRESENTATION AND DISCLOSURES 447
12.9 Changes to the leasing standards 348
Summary 349 16 Financial statement presentation 449
Discussion questions 349 Introduction 450
Exercises 349 16.1 Components of financial statements 450
Academic perspective 354
16.2 General principles of financial statements 451
13 Intangible assets 355 16.3 Statement of financial position 452
Introduction 356 16.4 Statement of profit or loss and other
13.1 The nature of intangible assets 358 comprehensive income 457
13.2 Recognition and initial measurement 360 16.5 Statement of changes in equity 463
13.3 Measurement subsequent to initial recognition 364 16.6 Notes 466
13.4 Retirements and disposals 367 16.7 Accounting policies, changes in accounting
estimates and errors 468
13.5 Disclosure 367
16.8 Events after the reporting period 473
Summary 371
Summary 475
Discussion questions 372
Discussion questions 475
References 373
References 476
Exercises 373
Academic perspective 376 Exercises 476
Academic perspective 482
14 Business combinations 379
14.1 The nature of a business combination 380
17 Statement of cash flows 485
14.2 Accounting for a business combination — Introduction and scope 486
basic principles 381 17.1 Purpose of a statement of cash flows 486
14.3 Accounting in the records of the acquirer 383 17.2 Defining cash and cash equivalents 486
14.4 Recognition and measurement of assets 17.3 Classifying cash flow activities 487
acquired and liabilities assumed 383 17.4 Format of the statement of cash flows 489
14.5 Goodwill and gain on bargain purchase 385 17.5 Preparing a statement of cash flows 491
14.6 Shares acquired in the acquiree 392 17.6 Other disclosures 506
14.7 Accounting in the records of the acquiree 392 Summary 509
14.8 Subsequent adjustments to the initial accounting Discussion questions 509
for a business combination 395 References 509
14.9 Disclosure — business combinations 398 Exercises 509
Summary 400 Academic perspective 515
Discussion questions 406
References 406 18 Operating segments 517
Exercises 407 18.1 Objectives of financial reporting by segments 518
Academic perspective 414 18.2 Scope 518

CONTENTS vii
18.3 A controversial standard 518 22 Consolidation: intragroup transactions 605
18.4 Identifying operating segments 520 Introduction 606
18.5 Identifying reportable segments 522 22.1 Rationale for adjusting for intragroup
18.6 Applying the definition of reportable transactions 606
segments 524 22.2 Transfers of inventory 607
18.7 Disclosure 524 22.3 Intragroup services 613
18.8 Applying the disclosures in practice 527 22.4 Intragroup dividends 614
18.9 Results of the post-implementation 22.5 Intragroup borrowings 616
review of IFRS 8 531 Summary 617
Summary 532 Discussion questions 625
Discussion questions 532 Exercises 626
References 532
Exercises 532
23 Consolidation: non-controlling interest 635
Academic perspective 535
23.1 Non-controlling interest explained 636
19 Other key notes disclosures 537 23.2 Effects of an NCI on the consolidation
process 638
Introduction 538
23.3 Calculating the NCI share of equity 644
19.1 Related party disclosures 538
23.4 Adjusting for the effects of intragroup transactions 656
19.2 Earnings per share 543
23.5 Gain on bargain purchase 658
Summary 554
Summary 660
Discussion questions 554
Discussion questions 672
References 555
Exercises 672
Exercises 555
Academic perspective 557
24 Translation of the financial statements
Part 4 of foreign entities 679
24.1 Translation of a foreign subsidiary’s
ECONOMIC ENTITIES 559 statements 680
24.2 Functional and presentation currencies 680
20 Consolidation: controlled entities 561
24.3 The rationale underlying the functional
Introduction 562 currency choice 680
20.1 Consolidated financial statements 562 24.4 Identifying the functional currency 683
20.2 Control as the criterion for consolidation 564 24.5 Translation into the functional currency 684
20.3 Preparation of consolidated financial statements 569 24.6 Changing the functional currency 689
20.4 Business combinations and consolidation 570 24.7 Translation into the presentation currency 689
20.5 Disclosure 572 24.8 Consolidating foreign subsidiaries — where
Summary 574 local currency is the functional currency 691
Discussion questions 574 24.9 Consolidating foreign subsidiaries — where
Exercises 575 functional currency is that of the parent
entity 698
21 Consolidation: wholly owned 24.10 Net investment in a foreign operation 699
subsidiaries 577 24.11 Disclosure 700
21.1 The consolidation process 578 Summary 700
21.2 Consolidation worksheets 579 Discussion questions 701
21.3 The acquisition analysis: determining References 701
goodwill or bargain purchase 580 Exercises 701
21.4 Worksheet entries at the acquisition date 583
21.5 Worksheet entries subsequent to Online chapter C Associates and joint ventures
the acquisition date 588 Online chapter D Joint arrangements
21.6 Revaluations in the records of the
subsidiary at acquisition date 595 Glossary 707
21.7 Disclosure 595 Index 717
Summary 598
Discussion questions 598
Exercises 598

viii CONTENTS
PREFACE
With International Financial Reporting Standards (IFRS®) now being mandated for listed companies in
100+ countries across the globe, it has become a truly global set of standards for financial reporting. IFRS
Standards have also become the example for national accounting standards. The credit crisis has shown
that a stable, globally accepted set of financial reporting standards is important to maintain transparency
in financial communication by companies to their constituents.
An understanding of the IFRS Standards is therefore paramount for all those involved in financial
reporting or preparing to attain such a role. It provides not just technical knowledge and in-depth under-
standing of the financial reporting process, but does so in a global business environment. Applying IFRS
Standards, fourth edition, has been written to meet the needs of accountancy students and practitioners in
understanding the complexities of IFRS Standards.
This publication is the fourth edition of the book. It has now established itself as a text that is used by
academics and practitioners throughout the world. We have welcomed the comments and suggestions
received from various people and have tried to ensure that these are reflected in this edition.

What’s new in this edition?

The fourth edition addresses the major changes to a number of accounting standards and the release of
new IFRS Standards, in particular:
• the IASB’s Conceptual Framework for Financial Reporting
• IFRS 9 Financial Instruments
• IFRS 15 Revenue from Contracts with Customers
• IFRS 16 Leases.
The chapters covering these topics reflect these changes and discuss the consequences.
An important new feature has been introduced for the first time in this edition. Academic perspec-
tives can be found at the end of all chapters in the first three parts of the book (i.e. chapters 1 to
19). These academic perspectives summarise and highlight certain findings from published research in
accounting and other fields that pertain to a chapter’s topic. Referring to these Perspectives should give
the reader a basic understanding of questions that accounting researchers have attempted to address.
Note, however, that the academic perspectives do not furnish a comprehensive review of related liter-
ature. Rather, they provide a starting point for further reading and exploration of relevant academic
research.
Applying IFRS Standards fourth edition, also comes equipped with discussion questions and exercises at
the end of each chapter, specifically designed to test the reader’s understanding of the content. A wealth of
additional learning materials can also be found at www.wiley.com/college/picker, including:
• Four additional chapters entitled: Exploration for and evaluation of mineral resources; Agriculture;
Associates and joint ventures; Joint arrangements
• Instructor slides
• Testbank
• Additional exercises
• Solutions manual
• Access to the IFRS Learning Resources
In writing this book, we have endeavoured to ensure that the following common themes flow throughout
the text:
• Accounting standards are underpinned by a conceptual framework. Accounting standards are not simply
a rulebook to be learnt by heart. An understanding of the conceptual basis of accounting, and
the rationale behind the principles espoused in particular standards, is crucial to their consistent
application in a variety of practical applications.
• The International Accounting Standards Board (IASB®) financial reporting standards are principles-based.
Although a specific standard is a stand-alone document, the principles in any standard relate to and are
interpreted in conjunction with other standards. To appreciate the application of a specific standard,
an understanding of the reasoning within other standards is required. We have endeavoured where
applicable to refer to other accounting standards that are connected in principle and application.
In particular, extensive references are made to the Basis for Conclusions documents accompanying
each standard issued by the IASB. This material, although not integral to the standards, explains the
reasoning process used by the IASB and provides indicators of changes in direction being proposed by
the IASB.
• Accounting standards have a practical application. The end product of the standard-setting process must
be applied by accounting practitioners in a variety of organisational structures and practical settings.
While a theoretical understanding of a standard is important, practitioners should be able to apply
the relevant standard. The author of each chapter has demonstrated the practical application of the

PREFACE ix
 accounting standards by providing case studies, examples and journal entries (where relevant). The
references to practical situations require the reader to pay close attention to the detailed information
discussed, given that such a detailed examination is essential to an understanding of the standards.
Having only a broad overview of the basic principles is insufficient.
Writing a book like this is impossible without the help and input from many people. Much of the
knowledge and insights reflected in this book have been gained through discussions and debates with
many colleagues and with staff associated with the standard-setting bodies, particularly at the IASB. We
thank them for sharing their perspectives and experience. We would like to thank the following people
in particular. A team of people from EY’s Global IFRS team in London, consisting of Angela Covic, Pieter
Dekker, Steinar Kvifte, Victoria O’Leary, Alexandra Poddubnaya, Serene Seah-Tan and Charlene Teo, wrote
and reviewed individual chapters of the book. Richard Barker from Saïd Business School, Oxford Univer-
sity reviewed the chapters in Part 4. Erik Roelofsen from Rotterdam School of Management, Erasmus Uni-
versity Rotterdam and PwC reviewed the Academic Perspectives. Elisabetta Barone from Brunel Business
School updated the testbank. We would also like to thank Natalie Forde from Cardiff Business School and
other anonymous reviewers who have provided valuable feedback and recommendations during the devel-
opment of the fourth edition. In addition, we extend our thanks to the people at Wiley and professional
freelancers for their help realising this edition, including Juliet Booker, Steve Hardman, Georgia King,
Joyce Poh and Joshua Poole as well as Jennifer Mair and Paul Stringer. Last but not least, writing a book
takes huge commitment, and this has left less time for family and friends. We thank them also for their
support and understanding.
Finally, in a time when the world, with its increasing sophistication, seems to produce situations and
pronouncements that have added complexity, we hope that this book assists in the lifelong learning pro-
cess that ourselves and the readers of this book are continuously engaged in.

Ruth Picker
Kerry Clark
John Dunn
David Kolitz
Gilad Livne
Janice Loftus
Leo van der Tas

May 2016

x PREFACE
ABOUT THE AUTHORS
Ruth Picker
Ruth Picker BA, FCA, FSIA, FCPA, was Global Leader, Global IFRS Services, Global Professional Practice,
with EY between 2009 and 2013. Ruth has over 30 years’ experience with EY and has held various leader-
ship roles during this time. Up until June 2009, Ruth was Managing Partner — Melbourne and the Oceania
Team Leader of Climate Change and Sustainability Services. Prior to this role, Ruth was a senior partner in
the Technical Consulting Group, Global IFRS and the firm’s Professional Practice Director (PPD) respon-
sible for directing the firm’s accounting and auditing policies with the ultimate authority on accounting
and auditing issues.
Ruth’s authoritative insight and understanding of accounting policy and regulation was acknowledged
through her appointment to the International Financial Reporting Interpretations Committee (IFRIC®),
the official interpretative arm of the International Accounting Standards Board (IASB®). She was a member
of IFRIC between 2006 and 2013.
Ruth has conducted numerous ‘Directors’ Schools’ for listed company boards. These schools were
designed by Ruth and are aimed at enhancing the financial literacy of listed company board members.
She is a frequent speaker and author on accounting issues and has been actively involved in the Australian
accounting standard-setting process, being a past member and former deputy chair of the Australian
Accounting Standards Board (AASB) and having served on the Urgent Issues Group for 3 years. She has
been a long-standing lecturer and Task Force member for the Securities Institute of Australia, serving that
organisation for 17 years.
Her written articles have been published in numerous publications, and she is frequently quoted in the
media on accounting and governance issues.

Kerry Clark
Kerry Clark BCom, CA, CPA, is an Associate Partner in EY’s Financial Accounting Advisory Services team
in Calgary, Canada. Kerry provides accounting guidance to clients and staff advising on various financial
reporting matters under International Financial Reporting Standards (IFRS® Standards) and United States
generally accepted accounting principles and has over 25 years of experience with EY.
Kerry is a member of CPA Canada’s Oil and Gas Industry Task Force, the Canadian Association of Petro-
leum Producers’ IFRS Committee, EY’s internal expert network on the new revenue recognition and leases
standards and EY’s Global Oil and Gas Industry Network.
Kerry’s accounting experience spans a variety of industries, with a specific focus over the past several
years on financial reporting issues in the energy industries, including oil and gas, infrastructure and util-
ities in Canada. Prior to this Kerry was a key member of EY’s Technical Consulting Group, Global IFRS
based in Melbourne, Australia, where she was responsible for advising clients on the application of IFRS
Standards to complex transactions with a specific focus on the communications, entertainment and tech-
nology industry sectors.
Kerry frequently assists clients in understanding the financial reporting implications of complex trans-
actions such as complicated infrastructure construction and partnership arrangements, leases, acquisitions
and joint arrangements. She has been involved in the authoring of many EY publications and Charter
magazine articles and assisted Ruth Picker in conducting ‘Directors’ Schools’ for listed company boards.
She has also spoken on accounting issues in many different forums in both Canada and Australia.

John Dunn
John Dunn is a lecturer at the University of Strathclyde in Glasgow, where he teaches financial accounting
and auditing. He has published widely on those topics and others. He is a qualified accountant with exten-
sive experience of examining for professional bodies.

David Kolitz
David Kolitz, BComm (Natal), BCom (Hons) (SA), MCom (Wits) is Senior Lecturer in the Business School at
the University of Exeter. He was previously Associate Professor and Assistant Dean in the Faculty of Commerce,
Law and Management at the University of the Witwatersrand, Johannesburg. He is an experienced accounting
academic and the lead author/co-author of three other books in the area of Financial Accounting.

Gilad Livne
Gilad Livne, PhD, CPA, is a professor of accounting at the University of Exeter Business School. Previously
Gilad served on the accounting faculty of the London Business School and Cass Business School. Gilad

ABOUT THE AUTHORS xi

 received his MSc and PhD in accounting at the University of California at Berkeley, and BA (Accounting
and Economics) in Tel Aviv University.
Gilad’s teaching involves financial statement analysis, international accounting as well as advanced
financial accounting courses. Gilad has taught on Undergraduate, MBA, Executive MBA, Sloan, Ph.D., and
MSc programmes. In addition to teaching at Cass and LBS, Gilad has also taught at HEC (Paris), New
Economic School (Moscow), Lancaster University, University of Lausanne (Switzerland), Oulu University
(Finland) and on various company-specific programmes. Gilad has also consulted and appeared on TV
and various radio programmes.
Gilad’s research looks into auditor independence, international accounting, fair value accounting, and
compensation. Gilad currently serves on a number of editorial boards of accounting journals. His research
has been published in several journals including European Accounting Review, Journal of Banking and Finance,
Journal of Business Finance and Accounting, Journal of Corporate Finance, and Review of Accounting Studies.

Janice Loftus
Janice Loftus BBus, MCom (Hons) FCPA is an associate professor in accounting at the University of Adelaide,
Australia. Her teaching interests are in the area of financial accounting and she has written several study
guides for distance learning programmes. Janice’s research interests are in the areas of financial reporting
and social and environmental reporting. She co-authored Accounting Theory Monograph 11 on solvency
and cash condition with Professor M.C. Miller. She has numerous publications on international financial
reporting standards, risk reporting, solvency, earnings management, social and environmental reporting,
and developments in standard setting in Australian and international journals. Janice co-authored Financial
Reporting, Understanding Australian Accounting Standards and Accounting: Building Business Skills published by
John Wiley & Sons Australia. Prior to embarking on an academic career, Janice held several senior accounting
positions in Australian and multinational corporations.

Leo van der Tas

Leo van der Tas (PhD, RA) is the Global IFRS Leader at EY in London since 2013, before which he was
the Global IFRS Technical Director at EY in London. In that role he is responsible for the IFRS Standards
policy of EY and consistency of IFRS Standards implementation within the EY network. He is senior tech-
nical partner at EY in the Netherlands. He was a member of the IFRIC (and predecessor Standing Interpre-
tations Committee of the IASB) between 1997 and 2006 and a member of the IFRS Foundation Advisory
Council between 2009 and 2013.
Leo has been part-time full professor of financial reporting at Tilburg University, the Netherlands, since
2010 and before that part-time full professor at Erasmus University Rotterdam, the Netherlands, since
1993. He chaired the committee for permanent education in financial reporting of the Dutch Institute of
Accountants (NIVRA) until 2010.
Leo has been a member of the Consultative Working Group of the Standing Corporate Reporting Com-
mittee of the European Securities and Market Authority (ESMA) in Paris, France, since 2010. From 2007 to
2012 he was a member of the Advisory Committee on Financial Reporting of the Netherlands Authority
for the Financial Markets (AFM) in Amsterdam, the Netherlands.
He has published many books and articles in the area of international accounting and is a frequent
speaker and teacher on the subject.
He was seconded to the European Commission in Brussels, Belgium, for a period of 2 years to assist in
the development of the Commission’s policy in the area of European accounting harmonisation.

xii ABOUT THE AUTHORS

ACRONYMS
AFS Available-for-sale
AGM Annual general meeting
ASC Accounting Standards Codification
BCVR Business combinations value reserve
CEO Chief Executive Officer
CGU Cash-generating unit
CODM Chief Operating Decision Maker
COO Chief Operating Officer
DBL(A) Defined benefit liability (asset)
DBO Defined benefit obligation
ED Exposure draft
EFRAG European Financial Reporting Advisory Group
EPS Earnings per share
FAS Financial Accounting Standards
FASB US Financial Accounting Standards Board
FIFO First-in, first-out
FV Fair value
FVOCI Fair value through other comprehensive income
FVPL Fair value through profit or loss
GAAP US generally accepted accounting principles
IAS® International Accounting Standards
IASB® International Accounting Standards Board
IASC International Accounting Standards Committee, predecessor of the IASB
IDC Initial direct costs
IFRIC® International Financial Reporting Interpretations Committee, now the IFRS®
Interpretations Committee
IFRS® International Financial Reporting Standards
IPO Initial public offering
LIBOR London interbank offered rate
MLP Minimum lease payments
NCI Non-controlling interest
OCI Other comprehensive income
PV Present value
R&D Research and development
ROA Return on assets
SAC Standards Advisory Council
SARs Share appreciation rights
SFAS US Statement of Financial Accounting Standards
SPPI Solely payments of principal and interest
TSR Total shareholder return
US GAAP see GAAP

ACRONYMS xiii
 Part 1

Framework
Conceptual
1 The IASB and its Conceptual Framework 3
 1 The IASB and its
Conceptual Framework

LEARNING After studying this chapter, you should be able to:

OBJECTIVES
1 describe the organisational structure of the key players in setting International Financial
Reporting Standards (IFRS® Standards)
2 describe the purpose of a conceptual framework — who uses it and why
3 explain the qualitative characteristics that make information in financial statements useful
4 discuss the going concern assumption underlying the preparation of financial statements
5 define the basic elements in financial statements — assets, liabilities, equity, income and
expenses
6 explain the principles for recognising the elements of financial statements
7 distinguish between alternative bases for measuring the elements of financial statements
8 outline concepts of capital.

CHAPTER 1 The IASB and its Conceptual Framework 3

 INTRODUCTION
The purpose of this book is to identify and explain the major concepts and principles of International
Financial Reporting Standards (IFRS® Standards) and to help you develop skills in applying them in busi-
ness contexts. You may be familiar with the accounting treatment for various transactions, such as the
purchase of inventory. The text will build on that knowledge and consider the principles and techniques
required or permitted by IFRS Standards in accounting for a range of transactions, events and circumstances.
This first chapter provides an outline of the International Accounting Standards Board (IASB®) and its role
in setting international accounting standards, which are generally referred to as IFRS Standards. It also explains
that the IASB develops those IFRS Standards on the basis of some fundamental principles. While IFRSs take
precedence, the concepts and principles expounded in the Conceptual Framework for Financial Reporting (the
Conceptual Framework) are generally reflected in the requirements of IFRS Standards. IFRS Standards are
principles-based standards, rather than rules-based standards, even though the volume of guidance under
IFRS Standards has expanded considerably over the years. This means that professional judgement is needed in
applying IFRS Standards as they rely more on concepts and principles, such as a requirement that a value be
measured reliably, rather than on objective prescriptions, such as quantitative tests for classification of leases.
The Conceptual Framework establishes the qualitative characteristics financial information needs to have in
order to be useful, as well as definitions and recognition criteria for the elements of financial statements. These
principles underlie the exercise of professional judgement in applying IFRS Standards. The Conceptual Frame-
work is also an important source of guidance to standard setters in the development of new standards and to
preparers of financial statements in the absence of an applicable accounting standard. Accordingly, study of
the Conceptual Framework provides a useful foundation to understanding and applying IFRS Standards.

LO1 1.1 THE INTERNATIONAL ACCOUNTING STANDARDS

BOARD (IASB)
The purpose of this section is to provide an understanding of the structure of the IASB and its role in the
determination of IFRS Standards. Much of this information has been obtained from the website of the
IASB, www.ifrs.org. To keep up to date with what the IASB is doing, this website should be regularly visited.

1.1.1 Formation of the IASB

In 1972, at the 10th World Congress of Accountants in Sydney, Australia, a proposal was put forward for the
establishment of an International Accounting Standards Committee (IASC). In 1973, the IASC was formed
by 16 national professional accountancy bodies from nine countries — Canada, the United Kingdom,
the United States, Australia, France, Germany, Japan, the Netherlands and Mexico. By December 1998,
the membership of the IASC had expanded and the committee had completed its core set of accounting
standards.
However, the IASC was seen as having a number of shortcomings:
• It had weak relationships with national standard setters; this was due in part to the fact that the
representatives on the IASC were not representative of the national standard setters but rather of
national professional accounting bodies.
• There was a lack of convergence between the IASC standards and those adopted in major countries,
even after 25 years of trying.
• The board was only part time.
• The board lacked resources and technical support.
In 1998, the committee responsible for overseeing the operations of the IASC began a review of the
IASC’s operations. The results of the review were recommendations that the IASC be replaced with a
smaller, full-time International Accounting Standards Board. In 1999, the IASC board approved the con-
stitutional changes necessary for the restructuring of the IASC. A new International Accounting Standards
Committee Foundation was established and its trustees appointed. By early 2001, the members of the IASB
and the Standards Advisory Council (SAC) were appointed, as were technical staff to assist the IASB.
The IASB initially adopted the International Accounting Standards (IAS® Standards), with some mod-
ifications, as issued by the IASC (e.g. IAS 2 Inventories). As standards were revised or newly issued by the
IASB, they were called International Financial Reporting Standards (e.g. IFRS 8 Operating Segments). So the
term International Financial Reporting Standards includes both IFRS Standards and IAS Standards.

1.1.2 The standard-setting structure of the IASB

Available on the IASB website is a document entitled IASB and the IASC Foundation: Who We Are and
What We Do. This document is available in ten languages. The IASB is an independent standard-setting
board. The IFRS Interpretations Committee (formerly IFRIC) issues interpretations of and guidance on the

4 PART 1 Conceptual Framework

requirements of IFRS Standards in relation to accounting for specific transactions or events. Compliance
with IFRS Standards includes compliance with IFRIC® Interpretations.
The IASB and IFRS Interpretations Committee are appointed and overseen by a geographically and pro-
fessionally diverse group of trustees (IFRS Foundation Trustees) who are publicly accountable to a moni-
toring board made up of public authorities, which currently comprises representatives from the Japanese
and, US capital market regulators and IOSCO (International Organization of Securities Commissions), as
well as a representative from the European Commission. The IFRS Foundation Trustees appoint an IFRS
Advisory Council, which provides strategic advice to the IASB and informs the IFRS Foundation Trustees.
This structure can be seen diagrammatically in figure 1.1.

Monitoring Board
of public capital market authorities

appoints, monitors report to

Trustees of the IFRS Foundation

(Governance)

appoint inform oversee, review effectiveness,

informs
appoint and finance

IFRS Advisory Council Standard setting

International Accounting Standards Board (IASB)

provides strategic (IFRSs/IFRS for SMEs)
advice

IFRS Interpretations Committee

(IFRICs)
SME Implementation Group

Operations
Education Initiative, IFRS Taxonomy (XBRL), Content Services

FIGURE 1.1 Institutional structure of international standard setting

Source: IASB (2016).

As of July 2015, the Constitution envisages that the IASB comprises 16 members but the actual number
of members is currently14. The IFRS Foundation has issued a proposal to reduce the number of IASB Board
members to 13. The members are experts with a mix of recent practical experience in setting accounting
standards, preparing, auditing, or using financial statements and accounting education. While the mix of
members is not based on geographical criteria, the trustees endeavour to ensure that the IASB is not dom-
inated by any particular constituency or geographical interest.
The trustees approved the publication of the booklet IASB and IFRS Interpretations Committee Due Process
Handbook in 2013. It is available on the IASB’s website. The due process for issuing IFRSs comprises the
following six stages:
1. Setting the agenda. The IASB considers the relevance and reliability of the information that could be pro-
vided, the existing guidance (if any), the potential for enhanced convergence of accounting practice, the
quality of the standard to be developed and any resource constraints.
2. Planning the project. The IASB decides whether it should undertake the project by itself or jointly with
another standard setter such as the US Financial Accounting Standards Board (FASB).
3. Developing and publishing the discussion paper. The IASB may issue a discussion paper; however, this is not
mandatory.
4. Developing and publishing the exposure draft (ED). The IASB must issue an ED. This is a mandatory step.
5. Developing and publishing the standard. The IASB may re-expose an ED, particularly where there are major
changes since the ED was first released in stage 4.

CHAPTER 1 The IASB and its Conceptual Framework 5

 As part of stages 4 and 5, the IASB may hold regular meetings with interested parties, including other
standard-setting bodies, to help understand unanticipated issues related to the practical implementa-
tion and potential impact of the ED or IFRS respectively.
6. Procedures involving consultation and evaluation after an IFRS has been issued. The IASB may carry out post-
implementation reviews of each new IFRS.
The IASB has full discretion over its technical agenda and over the assignment of projects, potentially to
national standard setters. In preparing the IFRSs, the IASB has complete responsibility for all technical mat-
ters including the preparation and issuance of standards and exposure drafts, including any dissenting opin-
ions on these, as well as final approval of interpretations developed by the IFRS Interpretations Committee.
IASB meetings are normally held every month and last between three and five days. The meetings
are open to the public. Interested parties can attend the meetings in person, or may listen and view the
meeting via the IASB webcast. Subsequent to each meeting, the decisions are summarised in the form of a
publication called IASB Update which is available on the IASB website.

1.1.3 IFRS Interpretations Committee

The IFRS Interpretations Committee reviews newly identified financial reporting issues that are not specif-
ically dealt with in IFRSs, and issues for which unsatisfactory or conflicting interpretations have emerged
or may emerge. The IFRS Interpretations Committee endeavours to reach a consensus on appropriate
accounting treatment and provides authoritative guidance on the issue concerned. The interpretations
issued by the committee are referred to as IFRIC Interpretations, taking their name from the previous
name given to the committee, the International Financial Reporting Interpretations Committee (IFRIC).
When approved by the IASB, IFRIC Interpretations have equivalent status to standards issued by the IASB;
that is, although IFRIC Interpretations are not accounting standards, they form part of IFRSs such that
compliance with IFRSs means compliance with both accounting standards issued by the IASB and IFRIC
Interpretations approved by the IASB. More recently the IFRS Interpretations Committee has been asked by
the IASB to help with the drafting of minor amendments to standards and with the Annual Improvement
Projects. The latter are annual packages of changes to standards that are minor or narrow in scope.

1.1.4 Advisory bodies

The IASB has formal advisory bodies that provide a means for the Board to consult and engage with inter-
ested parties from a range of backgrounds and geographical areas. These advisory bodies include the:
• IFRS Advisory Council
• Capital Markets Advisory Committee
• Emerging Economies Group
• Global Preparers Forum
• SME Interpretations Group.
Working groups may be established for major projects to provide the IASB with access to additional
expertise as required; for example, the Employee Benefits Working Group and the Insurance Working
Group. Further information about advisory bodies, including reports and summaries of discussions, can
be obtained from the IASB’s website.

LO2 1.2 THE PURPOSE OF A CONCEPTUAL FRAMEWORK

In 1989, the IASC, the predecessor to the IASB, adopted the Framework for the Preparation and Presentation
of Financial Statements (the Framework). The Framework borrowed heavily from the Statements of Financial
Accounting Concepts developed by the FASB in the 1970s. This document was superseded by the Concep-
tual Framework for Financial Reporting (the Conceptual Framework) in 2010, developed jointly by the IASB
and the FASB.
The purpose of a conceptual framework is to provide a coherent set of principles:
• to assist standard setters to develop a consistent set of accounting standards for the preparation of
financial statements
• to assist preparers of financial statements in the application of accounting standards and in dealing
with topics that are not the subject of an existing applicable accounting standard
• to assist auditors in forming an opinion about compliance with accounting standards
• to assist users in the interpretation of information in financial statements.
The Conceptual Framework issued by the IASB provides guidance to preparers in the application of IFRSs.
The role of the Conceptual Framework in providing guidance for dealing with accounting issues that are
not addressed by an IFRS is explicitly reinforced in IFRSs. IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors requires preparers to consider the definitions, recognition criteria and measurement
concepts in the Conceptual Framework when developing accounting policies for transactions, events or con-
ditions in the absence of an IFRS that specifically applies or that applies to similar circumstances. The
requirements of IAS 8 are considered in more detail in chapter 16.

6 PART 1 Conceptual Framework

 Based upon feedback from the agenda consultation in 2011 it became clear to the IASB that an update
of the Conceptual Framework was needed. A discussion paper was issued in 2013 and an exposure draft in
2015. In the remainder of the chapter the existing Conceptual Framework is described. An overview of pro-
posed changes can be found in section 1.9.
This chapter is based upon the IASB’s current Conceptual Framework which is rather patchy as it com-
prises four chapters, two of which (chapters 1 and 3) are final, one (chapter 2) is work in progress, and
one (chapter 4) comprises the leftover bits of the old Framework that have not been amended yet:
• Chapter 1: The objective of general purpose financial reporting
• Chapter 2: The reporting entity (in progress, to be added by the IASB)
• Chapter 3: The qualitative characteristics of useful financial reporting
• Chapter 4: The Framework (1989): the remaining text (comprising underlying assumption, definition
and recognition of elements of financial statements, measurement and concepts of capital).

1.2.1 The objective of financial reporting

The IASB’s Conceptual Framework deals only with the objective of general purpose financial reporting; that
is, financial reporting intended to meet the information needs common to a range of users who are unable
to command the preparation of reports tailored to satisfy their own particular needs.
Paragraph OB2 of the IASB Conceptual Framework states the objective of general purpose financial
reporting:
The objective of general purpose financial reporting is to provide financial information about the reporting
entity that is useful to present and potential equity investors, lenders and other creditors in making decisions
about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt
instruments, and providing or settling loans and other forms of credit.
This objective reflects several value judgements made by the IASB about the role of financial state-
ments, which are described in the Basis for Conclusions on Chapter 1: The objective of general purpose financial
reporting. The Basis for Conclusions includes the following arguments:
• Financial statements should reflect the perspective of the entity rather than the perspective of the
entity’s equity investors. The focus is then on the entity’s resources and the changes in them rather
than on the shareholders as owners of the entity. Shareholders are providers of resources as are those
who provide credit resources to the entity. Under the entity perspective, the reporting entity is deemed
to have substance of its own, separate from that of its owners (paragraph BC1.8).
• The key users of financial statements are capital providers — existing and potential investors and
lenders. An entity obtains economic resources from capital providers in exchange for claims on
those resources. Because of these claims, capital providers have the most critical and immediate
need for economic information about the entity. These parties also have common information
needs. The focus on these users of information, as opposed to other potential users such as
government, regulatory bodies, employees and customers, is a narrowing of the user groups in
comparison to the groups considered in the former version of the IASB Conceptual Framework
(paragraphs BC1.9–1.12).
Before the objective of general purpose financial reporting can be implemented in practice, the basic
qualitative characteristics of financial reporting information need to be specified. Further, it is necessary to
define the basic elements — assets, liabilities, equity, income and expenses — used in financial statements.

1.2.2 The reporting entity

Chapter 2 of the Conceptual Framework is reserved for the reporting entity. In March 2010, the IASB released
an exposure draft titled Exposure Draft ED/2010/2 Conceptual Framework for Financial Reporting — The
Reporting Entity. However, before finalising this chapter, the Board decided to include it in the exposure
draft of a new Conceptual Framework, which was released in 2015 (refer to section 1.9).

LO3 1.3 QUALITATIVE CHARACTERISTICS OF USEFUL

FINANCIAL INFORMATION
What characteristics should financial information have in order to be included in general purpose finan-
cial reporting? The following section discusses both the qualitative characteristics of useful information
and the constraint on providing useful information. The qualitative characteristics are divided into funda-
mental qualitative characteristics and enhancing qualitative characteristics.

1.3.1 Fundamental qualitative characteristics

For financial information to be decision useful, it must possess two fundamental qualitative characteristics:
• relevance
• faithful representation.

CHAPTER 1 The IASB and its Conceptual Framework 7

 Relevance
Paragraphs QC6 to QC10 of the IASB’s Conceptual Framework elaborate on the qualitative characteristic of
relevance. Information is relevant if:
• it is capable of making a difference in the decisions made by the capital providers as users of financial
information
• it has predictive value, confirmatory value or both. Predictive value occurs where the information
is useful as an input into the users’ decision models and affects their expectations about the future.
Confirmatory value arises where the information provides feedback that confirms or changes past or
present expectations based on previous evaluations
• it is capable of making a difference whether the users use it or not. It is not necessary that the
information has actually made a difference in the past or will make a difference in the future.
Information about the financial position and past performance is often used as the basis for predicting
future financial position and performance and other matters in which users are directly interested, such as
future dividends and wage payments, future share prices, and the ability of the reporting entity to pay its debts
when they fall due. The predictive ability of information may be improved if unusual or infrequent transac-
tions and events are reported separately in the statement of profit or loss and other comprehensive income.
Materiality is an entity-specific aspect of the relevance of information. Information is material if its
omission or misstatement could influence the decisions that users make about a specific reporting entity
(paragraph QC11).
Small expenditures for non-current assets (e.g. tools) are often expensed immediately rather than depre-
ciated over their useful lives to save the clerical costs of recording depreciation and because the effects on
performance and financial position measures over their useful lives are not large enough to affect decisions.
Another example of the application of materiality is the common practice by large companies of rounding
amounts to the nearest thousand units of currency (e.g. euros or dollars) in their financial statements.
Materiality is a relative matter — what is material for one entity may be immaterial for another. A
$10 000 error may not be important in the financial statements of a multimillion-dollar company, but it
may be critical to a small business. The materiality of an item may depend not only on its relative size
but also on its nature. For example, the discovery of a $10 000 bribe may be a material event even for a
large company. Judgements as to the materiality of an item or event are often difficult. Management make
judgements based on their knowledge of the company and on past experience. Auditors make their own
judgements about materiality when auditing the financial statements.

Faithful representation
Paragraphs QC12 to QC16 of the IASB’s Conceptual Framework elaborate on the concept of faithful rep-
resentation. Faithful representation is attained when the depiction of an economic phenomenon is com-
plete, neutral, and free from material error. This results in the depiction of the economic substance of the
underlying transaction. Note the following in relation to these characteristics:
• A depiction is complete if it includes all information necessary for faithful representation.
• Neutrality is the absence of bias intended to attain a predetermined result. Providers of information
should not influence the making of a decision or judgement to achieve a predetermined result.
• As information is provided under conditions of uncertainty and judgements must be made, there is not
necessarily certainty about the information provided. It may be necessary to disclose information about
the degree of uncertainty in the information in order that the disclosure attains faithful representation.
As explained in paragraph BC3.23 of the Basis for Conclusions on Chapter 3: Qualitative characteristics of
useful financial information, the boards noted that there are various notions as to what is meant by reli-
ability. The boards believe that the term ‘faithful representation’ provides a better understanding of the
quality of information required (paragraph BC3.24).
The two fundamental qualitative characteristics of financial information may give rise to conflicting guid-
ance on how to account for phenomena. For example, the measurement base that provides the most relevant
information about an asset will not always provide the most faithful representation. The Conceptual Frame-
work (paragraphs QC17–QC18) explains how to apply the fundamental qualitative characteristics. Once the
criterion of relevance is applied to information to determine which economic information should be con-
tained in the financial statements, the criterion of faithful representation is applied to determine how to
depict those phenomena in the financial statements. The two characteristics work together. Either irrelevance
(the economic phenomenon is not connected to the decision to be made) or unfaithful representation (the
depiction is incomplete, biased or contains error) results in information that is not decision useful.

1.3.2 Enhancing qualitative characteristics

The Conceptual Framework (paragraph QC19) identifies four enhancing qualitative characteristics:
• comparability
• verifiability
• timeliness
• understandability.

8 PART 1 Conceptual Framework

 These characteristics are complementary to the fundamental characteristics. The enhancing character-
istics distinguish more useful information from less useful information. In relation to these enhancing
qualities, note:
• Comparability is the quality of information that enables users to identify similarities in and differences
between two sets of economic phenomena. Making decisions about one entity may be enhanced if
comparable information is available about similar entities; for example, if profit per share is calculated
using the same accounting policies.
• Verifiability is a quality of information that helps assure users that information faithfully represents the
economic phenomena that it purports to represent. Verifiability is achieved if different independent
observers could reach the same general conclusions that the information represents the economic
phenomena or that a particular recognition or measurement model has been appropriately applied.
• Timeliness means having information available to decision makers before it loses its capacity to
influence decisions. If such capacity is lost, then the information loses its relevance. Information may
continue to be timely after it has been initially provided, for example, in trend analysis.
• Understandability is the quality of information that enables users to comprehend its meaning.
Information may be more understandable if it is classified, characterised and presented clearly and
concisely. Users of financial statements are assumed to have a reasonable knowledge of business and
economic activities and to be able to read a financial report.
Alternative accounting policies exist in the treatment of many items, such as property, plant and equip-
ment; investment properties; and financial instruments. The IASB have expressed their position regarding
the consistency of accounting methods in accounting standard IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors, which states that an entity must select and apply its accounting policies in
a consistent manner from one period to another. Consistency of practices between entities is also desired.
Any change made in an accounting policy by an entity must be disclosed by stating the nature of the
change, the reasons the change provides reliable and more relevant information, and the effect of the
change in monetary terms on each financial statement item affected. For example, a change in policies
may be disclosed in a note such as this:
During the year, the company changed from the first-in first-out to the weighted average cost method of
accounting for inventory because the weighted average cost method provides a more relevant measure of the
entity’s financial performance. The effect of this change was to increase cost of sales by $460 000 for the current
financial year.
Note that the need for consistency does not require a given accounting method to be applied throughout
the entity. An entity may very well use different inventory methods for different types of inventory and
different depreciation methods for different kinds of non-current assets. (Different inventory costing and
depreciation methods are discussed in chapters 9 and 11, respectively.) Furthermore, the need for consistency
should not be allowed to hinder the introduction of better accounting methods. Consistency from year
to year or entity to entity is not an end in itself, but a means for achieving greater comparability in the
presentation of information in general purpose financial reporting. The need for comparability should not
be confused with mere uniformity or consistency. It is not appropriate for an entity to continue to apply
an accounting policy if the policy is not in keeping with the qualitative characteristics of relevance and
faithful representation.

1.3.3 Cost constraint on useful financial reporting

Paragraphs QC35 to QC37 of the Conceptual Framework note that cost is the constraint that limits the
information provided by financial reporting. The provision of information incurs costs. The benefits of
supplying information should always be greater than the costs. Costs include costs of collecting and pro-
cessing information, costs of verifying information, and costs of disseminating information. The non-pro-
vision of information also imposes costs on the users of financial information as they seek alternative
sources of information.

LO4 1.4 GOING CONCERN ASSUMPTION

The Conceptual Framework retains the going concern assumption. Financial statements are prepared under
the assumption that the entity will continue to operate for the foreseeable future. Past experience indicates
that the continuation of operations in the future is highly probable for most entities. Thus, it is assumed
that an entity will continue to operate at least long enough to carry out its existing commitments. This
assumption is called the going concern assumption or sometimes the continuity assumption.
Adoption of the going concern assumption has important implications in accounting. For example, it
is an assumption used by some to justify the use of historical costs in accounting for non-current assets
and for the systematic allocation of their costs to depreciation expense over their useful lives. Because it
is assumed that the assets will not be sold in the near future but will continue to be used in operating
activities, current market values of the assets are sometimes assumed to be of little importance. If the entity

CHAPTER 1 The IASB and its Conceptual Framework 9

Random documents with unrelated
content Scribd suggests to you:
“Pris’ner!” bawled Appleweight—“an’ you the guv’nor’s gal——”
“You have hit the situation exactly, Mr. Appleweight; and as far as the
office of governor is concerned, it is capably filled by the young
gentleman on your left, Mr. Thomas Ardmore. Let us now adjourn to
his house, where, if I am not mistaken, a bit of cold fowl is usually to
be found on the sideboard at this hour. But hold”—and Jerry checked
her horse—“where can we lodge this gentleman, Mr. Ardmore, until
we decide upon his further fate?”
“We might put him in the wine cellar,” suggested Ardmore.
“No,” interposed Collins. “I fancy that much of your fluid stock has
paid revenue tax, and most of it has passed none too lightly through
the custom-house. It would be unwarrantably cruel to lock Mr.
Appleweight in such quarters, with the visible marks of taxation all
around him. Still, the sight of the stamps would probably destroy his
thirst, though his rugged independence might so far assert itself that
he would smash a few of your most expensive importations out of
sheer deviltry.”
“He shall be treated with the greatest consideration,” said Jerry; and
thereafter, no further adventure befalling them, they reached Ardsley,
where their arrival occasioned the greatest excitement.
 CHAPTER XIV.
A MEETING OF OLD FRIENDS.

Habersham’s men had proved exceedingly timid when it came to

the business of threshing the woods for Appleweight, whom they
regarded with a new awe, now that he had vanished so mysteriously.
They had searched the woods guardedly, but the narrow paths that
led away into the dim fastnesses of Ardsley were forbidding, and
these men were not without their superstitions. They had awaited for
years an opportunity to strike at the Appleweight faction; they had at
last taken their shot, and had seemingly brought down their bird; but
their lack of spirit in retrieving the game had been their undoing.
They had only aroused their most formidable enemy, who would
undoubtedly lose no time in seeking revenge. They were a dolorous
band who, after warily beating the woods, dispersed in the small
hours of the morning, having found nothing but Appleweight’s wool
hat, which only added to their mystification.
“We ought to have taken him away on the run,” said Habersham
bitterly, as he and Griswold discussed the matter on the veranda of
the prosecutor’s house and watched the coming of the dawn. “I
didn’t realize that those fellows lived in such mortal terror of the old
man; but they refused to make off with him until the last of his friends
had got well out of the way. I ought to have had more sense myself
than to have expected the old fox to sit tied up like a calf ready for
market. We had all his friends accounted for—those that weren’t at
prayer meeting were marked down somewhere else, and we had a
line flung pretty well round the church. Appleweight’s deliverance
must have come from somewhere inside the Ardmore property.
Perhaps the game warden picked him up.”
“Perhaps the Indians captured him,” suggested Griswold, yawning,
“or maybe some Martian came down on a parachute and hauled him
up. Or, as scarlet fever is raging at Mr. Ardmore’s castle”—and his
tone was icy—“Appleweight was probably seized all of a sudden,
and broke away in his delirium. Let’s go to bed.”
At eight o’clock he and Habersham rode into Turner Court House,
and Griswold went at once to the inn to change his clothes. No
further steps could be taken until some definite report was received
as to Appleweight’s whereabouts. The men who had attempted the
outlaw’s capture had returned to their farms, and were most
demurely cultivating the soil. Griswold was thoroughly disgusted at
the ridiculous failure of Habersham’s plans, and not less severe
upon himself for failing to push matters to a conclusion the moment
the outlaw was caught, instead of hanging back to await the safe
dispersion of the Mount Nebo congregation.
It had been the most puerile transaction possible, and he was aware
that a report of it, which he must wire at once to Miss Barbara
Osborne, would not impress that young woman with his capacity or
trustworthiness in difficult occasions. The iron that had already
entered into his soul drove deeper. He had ordered a fresh horse,
and was resolved to return to Mount Nebo Church for a personal
study of the ground in broad daylight.
As he crossed the musty parlour of the little hotel, to his great
astonishment Miss Osborne’s black Phœbe, stationed where her
eyes ranged the whole lower floor of the inn, drew attention to
herself in an elaborate courtesy.
“Miss Barb’ra wish me t’ say she done come heah on business, and
she like fo’ to see yo’ all right away. She done bring huh seddle, and
war a-gwine ridin’ twell you come back. She’s a-gittin’ ready, and I’ll
go tell huh you done come. She got a heap o’ trubble, thet young
missis, so she hev,” and the black woman’s pursed lips seemed to
imply that Professor Griswold was in some measure responsible for
Miss Osborne’s difficulties.
As he stared out into the street a negro brought a horse bearing a
better saddle than Mingo County had ever boasted, and hitched it
near the horse he had secured for himself. An instant later he heard
a quick step above, and Miss Osborne, sedately followed by the
black woman, came downstairs. She smiled and greeted him
cordially, but there was trouble in her brown eyes.
“I didn’t warn you of my coming. I didn’t want to be a nuisance to
you; but there’s a new—a most unaccountable perplexity. It doesn’t
seem right to burden you with it—you have already been so kind
about helping me; but I dare not turn to our oldest friends—I have
been afraid to trust father’s friends at all since Mr. Bosworth acted so
traitorously.”
“My time is entirely at your service, Miss Osborne; but I have a
shameful report to make of myself. I must tell you how miserably I
have failed, before you trust me any further. We—that is to say, the
prosecuting attorney of this county and a party he got together of
Appleweight’s enemies—caught the outlaw last night—took him with
the greatest ease—but he got away from us! It was all my fault, and
I’m deeply disgusted with myself!”
He described the capture and the subsequent mysterious
disappearance of Appleweight, and confessed the obvious necessity
for great caution in further attempts to take the outlaw, now that he
was on guard. Barbara laughed reassuringly at the end of the story.
“Those men must have felt funny when they went back to get the
prisoner and found that he had gone up into the air. But there’s a
new feature of the case that’s more serious than the loss of this man
——” and the trouble again possessed her eyes.
“Well, it’s better not to have our problems too simple. Any lawyer can
win an easy case—though I seem to have lost my first one for you,”
he added penitently.
She made no reply, but drew from her purse a cutting from a
newspaper and handed it to him.
“That’s from last night’s Columbia Vidette, which is very hostile to my
father.”
He was already running over the heavily leaded column that set forth
without equivocation the fact that Governor Osborne had not been in
Columbia since he went to New Orleans. It scouted the story that he
was abroad in the state on official business connected with the
Appleweight case—the yam which Griswold had forced upon the
friendly reporter at the telegraph office in Columbia. The governor of
a state, the Vidette went on to elaborate, could not vanish without
leaving some trace of himself, and a Vidette representative had
traced the steps of Governor Osborne from New Orleans until—the
italics are the Vidette’s—he had again entered South Carolina under
cover of night and for purposes which, for the honour of the state,
the Vidette hesitated to disclose.
The writer of the article had exhausted the possibilities of gentle
suggestion and vague innuendo in an effort to create an impression
of mystery and to pique curiosity as to further developments, which
were promised at any hour. Griswold’s wrath was aroused, not so
much against the newspaper, which he assumed had some fire for
its smothered trifle of smoke, but against the governor of South
Carolina himself, who was causing the finest and noblest girl in the
world infinite anxiety and pain.
“The thing is preposterous,” he said lightly. “The idea that your father
would attempt to enter his own state surreptitiously is inconceivable
in these days when public men are denied all privacy, and when it’s
any man’s right to deceive the press if he finds it essential to his own
comfort and peace; but the intimation that your father is in South
Carolina for any dishonourable purpose is preposterous. One thing,
however, is certain, Miss Osborne, and that is that we must produce
your father at the earliest possible moment.”
“But”—and Barbara hesitated, and her eyes, near tears as they
were, wrought great havoc in Griswold’s soul—“but father must not
be found until this Appleweight matter is settled. You understand
without making me speak the words—that he might not exactly view
the matter as we do.”
It was a painful subject; and the fact that she was driven by sheer
force of circumstances to appeal to him, a stranger, to aid her to
perform a public service in her father’s name rallied all his good
impulses to her standard. It was too delicate a matter for discussion;
it was a thing to be ignored; and he assumed at once a lighter tone.
“Come! We must solve the riddle of the lost prisoner at once, and
your father will undoubtedly give an excellent account of himself
when he gets ready. Meanwhile the fiction that he is personally
carrying the war into the Appleweight country must be maintained,
and I shall step to the railway station and wire the Columbia
newspaper in his name that he is in Mingo County on the trail of the
outlaws.”
The messages were composed by their joint efforts at the station,
with not so much haste but that an associate professor of admiralty,
twenty-nine years old, could defer in the most trifling matters to the
superior literary taste of a girl of twenty whose brown eyes were very
pleasant to meet in moments of uncertainty and appeal.
He signed the messages Charles Osborne, Governor, with a flourish
indicative of the increased confidence and daring which Miss
Osborne’s arrival had brought to the situation.
“And now,” said Griswold, as they rode through the meagre streets of
Turner’s, “we will go to Mount Nebo Church and see what we can
learn of Appleweight’s disappearance.”
“The North Carolina papers are making a great deal of Governor
Dangerfield’s activity in trying to put down outlawry on the border,”
said Barbara. “Marked copies of the newspapers are pouring into
papa’s office. I can but hold Mr. Bosworth responsible for that. We
may count upon it that he will do all in his power to annoy us”—and
then, as Griswold looked at her quickly, he was aware that she had
coloured and averted her eyes; and while, as a lawyer, he was
aware that words of two letters might be provocative of endless
litigation of the bitterest sort, he had never known before that us, in
itself the homeliest of words, could cause so sweet a distress. It
seemed that an interval of several years passed before either spoke
again.
“We are quite near the estate of your friend, Mr. Ardmore, aren’t
we?” asked Barbara presently.
“I fancy we are,” replied Griswold, but with a tone so coldly at
variance with his previous cordial references to the master of Ardsley
that Barbara looked at him inquiringly.
“I’m sorry that I should have given you the impression, Miss
Osborne, that Mr. Ardmore and I are friends, as I undoubtedly did at
Columbia. He has, for some unaccountable reason, cut my
acquaintance in a manner so unlike him that I do not pretend to
explain it; nor, I may add, is it of the least importance.”
“I was a little surprised,” returned Barbara, with truly feminine instinct
for mingling in the balm of consolation the bitterest and most
poisonous herbs, “that you should have had for a friend a man who
frankly follows girls whose appearance he fancies. Even Mr.
Ardmore’s democratic enthusiasm for the downtrodden laundry girl
does not wholly mitigate the winking episode.”
“He had, only a few days ago, invited me to visit him, though I had
been to his house so often that the obscurest servant knew that I
was privileged even beyond the members of Mr. Ardmore’s own
family in my freedom of the place. When I saw that his house would
be a convenient point from which to study the Appleweight situation,
I wired him that I was on the way, and to my utter amazement he
replied that he could not entertain me—that scarlet fever was
epidemic on the estate—on those almost uncounted acres!”
And with a gulp and a mist in his eyes, Griswold drew rein and
pointed, from a hill that had now borne them to a considerable
height, toward Ardsley itself, dreamily basking in the bright morning
sunlight within its cinture of hills, meadows, and forest.
“I never saw the place before! It’s perfectly splendid!” cried Barbara,
forgetting that Griswold must be gazing upon it with the eyes of an
exile viewing grim, forbidding battlements that once hailed him in
welcome.
“It’s one of the most interesting houses in America,” observed
Griswold, who strove at all times to be just.
“There’s a flag flying—I can’t make out what it is,” said Barbara.
“It’s probably to give warning of the scarlet fever; it would be like
Ardy to do that. But we must hurry on to Mount Nebo.”
He knew the ways of Ardsley thoroughly; better, in fact, than its
owner ever had in old times; but in his anger at Ardmore he would
not set foot on the estate if he could possibly avoid doing so in
reaching the scene of the night’s contretemps. He found without
difficulty the trail taken by Habersham’s men, and in due course of
time they left their horses a short distance from the church and
proceeded on foot.
“It seems all the stupider in broad daylight,” said Griswold, after he
had explained just what had occurred, and how the captors, in their
superstitious awe of Appleweight, had been afraid to carry him off
the moment they were sure of him, but had slipped back among their
fellows to wait until the coast was perfectly clear. To ease his deep
chagrin Barbara laughed a good deal at the occurrence as they
tramped over the scene discussing it. They went into the woods back
of the church, where Griswold began to exercise his reasoning
powers.
“Some one must have come in from this direction and freed the man
and taken him away,” he declared.
He knelt and marked the hoof-prints where Appleweight had been
left tied; but the grass here was much trampled, and Griswold was
misled by the fact, not knowing that news of Appleweight’s strange
disappearance had passed among the outlaw’s friends by the swift
telegraphy of the border, and that the whole neighbourhood had
been threshed over hours before. It might have been some small
consolation to Griswold had he known that Appleweight’s friends and
accomplices were as much at a loss to know what had become of
the chieftain as the men who had tried so ineffectually to kidnap him.
From the appearance of the trampled grass many men had taken a
hand in releasing the prisoner, and this impression did not clarify
matters for Griswold.
“Where does this path lead?” asked Barbara.
“This is Ardsley land here, this side of the church, and that trail leads
on, if I remember, to the main Ardsley highway, with which various
other roads are connected—many miles in all. It’s inconceivable that
the deliverers of this outlaw should have taken him into the estate,
where a sort of police system is maintained by the forestry corps. I
don’t at all make it out.”
He went off to explore the heavy woods on each side of the trail that
led into Ardsley, but without result. When he came gloomily back he
found that in his absence Barbara had followed the bridle-path for a
considerable distance, and she held out to him a diminutive pocket
handkerchief, which had evidently been snatched away from its
owner—so Barbara explained—by a low-hanging branch of an oak,
and flung into a blackberry bush, where she had found it. It was a
trifle, indeed, the slightest bit of linen, which they held between them
by its four corners and gravely inspected.
“Feminine, beyond a doubt,” pronounced Griswold sagely.
“It’s a good handkerchief, and here are two initials worked in the
corner that may tell us something—‘G. D.’ It probably belongs to
some guest at Ardsley. And there’s a very faint suggestion of orris—
it’s a city handkerchief,” said Barbara with finality, “but it has suffered
a trifle in the laundry, as this edge is the least bit out of drawing from
careless ironing.”
“And I should say, from a certain crispness it still retains, that it
hasn’t been in the forest long. It hasn’t been rained on, at any rate,”
added Griswold.
“But even the handkerchief doesn’t tell us anything,” said Barbara,
spreading it out, “except that some woman visitor has ridden here
within a few days and played drop the handkerchief with herself or
somebody else to us unknown.”
“She may have been a scarlet fever patient from Ardsley; you’d
better have a care!” And Griswold’s tone was bitter.
“I’m not afraid; and as I have never been so near Ardsley before, I
should like to ride in and steal a glimpse. There’s little danger of
meeting the lord of the manor, I suppose, or any of his guests at this
hour, and we need not go near the house.”
He saw that she was really curious, and it was not in his heart to
refuse her, so they followed the bridle-path through the cool forest,
and came in due course to the clearing where Jerry had first
confessed herself lost, and thereafter had suffered the captured
outlaw to point her the way home.
“The timber has been cut here since my last visit, but I remember the
bridle-paths very well. They all reach the highroad of the estate
ultimately. We may safely take this one, which has been the most
used, and which climbs a hill that gives a fine outlook.”
The path he chose had really been beaten into better condition than
either of the others, and they rode side by side now. A deer feeding
on a grassy slope raised its head and stared at them, and a fox
scampered wildly before them. It seemed that they were shut in from
all the world, these two, who but a few days before had never seen
each other, and it was a relief to him to find that she threw off her
troubles and became more animated and cheerful than he had yet
seen her. His comments on her mount, which was sorry enough,
were amusing; and she paused now and then to peer into the tops of
the tallest trees, under the pretence that Appleweight had probably
reverted to the primordial and might be found at any minute in one of
the branches above them. Her dark-green habit, and the soft hat to
match, with its little feather thrust into the side, spoke for real usage;
and the gauntleted hand that swung lightly at her side inadvertently
brushed his own once—and he knew that this must not happen
again! When their eyes met it was with frank confidence on her part,
and it seemed to him that they were very old friends, and that they
had been riding through this forest, or one identical with it, since the
world began. It is thus that a man with any imagination feels first
about a woman who begins to interest him—that there was never
any beginning to their acquaintance that can be reckoned as time
and experience are measured, but that he has known her for
countless years; and if there be a poetic vein in him, he will indulge
in such fancies as that he has seen her as a priestess of Aphrodite in
the long ago, dreaming upon the temple steps; or that he has
watched her skipping pebbles upon the violet storied sea against a
hazy background of cities long crumbled into dust. Such fancies as
these are a part of love’s gentle madness, and luckier than she
knows is the girl who awakens in a lover this eager idealization. If he
can turn a verse for her in which she is added to the sacred Nine,
personifying all sweet, gentle, and gracious things, so much the
better.
Just what he, on the other hand, may mean to her; just what form of
deification he evokes in her, he can never know; for the women who
write of such matters have never been those who are sincere or
worth heeding, and they never will be, so long as woman’s heart
remains what it has been from the beginning—far-hidden, and filled
with incommunicable secret beliefs and longings, and tremulous with
fears that are beyond man’s power to understand.
Griswold had missed the white rose that he had begun to associate
with Barbara, and he grew suddenly daring and spoke of it.
“You haven’t your rose to-day.”
“Oh, I’m beyond the source of supply! I have a young friend, a girl,
who makes her living as a florist—not a purely commercial
enterprise, for she experiments and develops new varieties, and is
quite wonderful; and that white rose is her own creation—it is
becoming well known. She named it for me, and she sends me at
least one every day—she says it’s my royalty—if that’s what you
lawyers call that sort of thing.”
“We lawyers rarely have anything so interesting as that to apply the
word to! So that rose is the Barbara?” and it gave him a feeling of
recklessness to find himself speaking her name aloud. “There are
large conservatories on the estate, over there somewhere; I might
risk the scarlet fever by attacking the gardener and demanding a
Barbara for you.”
“I’m afraid my little flower hasn’t attained to the grandeur of Ardsley,”
she laughed. “But pray, where are we?”
They had reached the highroad much sooner than Griswold had
expected, and he checked his horse abruptly, remembering that he
was persona non grata on this soil.
“We must go back; I mustn’t be seen here. The workmen are
scattered all about the place, and they all know me.”
“Oh, just a little farther! I want to see the towers of the castle!”
If she had asked him to jump into the sea he would not have
hesitated; and he was so happy at being with her that his heart sang
defiance to Ardmore and the splendours of Ardsley.
They were riding now toward the red bungalow, where he had often
sprawled on the broad benches and chaffed with Ardmore for hours
at a time. Tea was served here sometimes when there were guests
at the house; and Griswold wondered just who were included in the
party that his quondam friend was entertaining, and how Mrs.
Atchison was progressing in her efforts to effect a match between
Daisy Waters and her brother.
The drives were nearly all open to the public, so that by the letter of
the law he was no intruder; but beyond the bungalow he must not
go. Sobered by the thought of his breach with Ardmore, he resolved
not to pass the bungalow whose red roof was now in sight.
“It’s like a fairy place, and I feel that there can be no end to it,”
Barbara was saying. “But it isn’t kind to urge you in. We certainly are
doing nothing to find Appleweight, and it must be nearly noon.”
It was just then—he vividly recalls the moment—as Griswold felt in
his waistcoat for his watch, that Miss Jerry Dangerfield, with Thomas
Ardmore at her side, galloped into view. They were racing madly, like
irresponsible children, and bore boisterously down upon the two
pilgrims.
Jerry and Ardmore, hatless and warm, were pardonably indignant at
thus being arrested in their flight, and the master of Ardsley, feeling
for once the dignity of his proprietorship, broke out stormily.
“I would have you know—I would have you know——” he roared,
and then his voice failed him. He stared; he spluttered; he busied
himself with his horse, which was dancing in eagerness to resume
the race. He quieted the beast, which nevertheless arched and
pawed like a war-horse, and then the master of Ardsley bawled:
“Grissy! I say, Grissy!”
Miss Osborne and Professor Griswold, on their drooping Mingo
County nondescripts, made a tame picture before Ardmore and his
fair companion on their Ardsley hunters. The daughter of the
governor of South Carolina looked upon the daughter of the
governor of North Carolina with high disdain, and it need hardly be
said that this feeling, as expressed by glacial glances, was evenly
reciprocal, and that in the contemptuous upward tilt of two charming
chins the nicest judgment would have been necessary to any fair
opinion as to which state had the better argument.
The associate professor of admiralty was known as a ready debater,
and he quickly returned his former friend’s salutation, and in much
the contumelious tone he would have used in withering an adversary
before a jury.
“Pardon me, but are you one of the employees here?”
“Why, Grissy, old man, don’t look at me like that! How did you——”
“I owe your master an apology for riding upon his property at a time
when pestilence is giving you cause for so much concern. The
death-rate from scarlet fever is deplorably high——”
“Oh, Grissy!” cried Ardmore.
“You have addressed me familiarly, by a nickname sometimes used
by intimate friends, though I can’t for the life of me recall you. I want
you to know that I am here in an official capacity, on an errand for
the state of South Carolina.”
Miss Dangerfield’s chin, which had dropped a trifle, pointed again
into the blue ether.
“You will pardon me,” she said, “but an agent of the state of South
Carolina is far exceeding his powers when he intrudes upon North
Carolina soil.”
“The state of South Carolina does what it pleases and goes where it
likes,” declared Miss Barbara Osborne warmly, whereupon Mr.
Ardmore, at a glance from his coadjutor, waxed righteously
indignant.
“It’s one thing, sir, for you to ride in here as a sightseer, but quite
another for you to come representing an unfriendly state. You will
please choose which view of the matter I shall take, and I shall act
accordingly.”
Griswold’s companion spoke to him earnestly in a low tone for a
moment, and then Griswold addressed Ardmore incisively.
“I don’t know what you pretend to be, sir; but it may interest you to
know that I am the governor of South Carolina!”
“And this gentleman,” cried Jerry, pointing to Ardmore with her riding-
crop, “though his hair is mussed and his scarf visibly untied, is none
other than the governor of North Carolina, and he is not only on his
own property, but in the sovereign state of which he is the chief
executive.”
Professor Griswold lifted his hat with the least flourish.
“I congratulate the state of North Carolina on having reposed
authority in hands so capable. If this young lady is correct, sir, I will
serve official notice on you that I have reason to believe that a
person named Appleweight, a fugitive from justice, is hiding on your
property and in your state, and I now formally demand that you
surrender him forthwith.”
“If I may introduce myself,” interposed Jerry, “I will say to you that my
name is Geraldine Dangerfield, and that this Appleweight person is
now at Mr. Ardmore’s house.”
“I suppose,” replied Miss Osborne with gentle irony, “that he has the
pink parlour and leads the conversation at table.”
“You are quite mistaken,” replied Ardmore; “but if it would afford you
any satisfaction to see the outlaw you may look upon him in my wine
cellar, where, only an hour ago, I left him sitting on a case of
Chateau Bizet ’82. My further intentions touching this scoundrelly
South Carolinian I need not now disclose; but I give you warning that
the Appleweight issue will soon and for ever be terminated, and in a
manner that will greatly redound to the credit and the glory of the Old
North State.”
Professor Griswold’s hand went to his moustache with a gesture that
smote Ardmore, for he knew that it hid that inscrutable smile that had
always baffled him.
“I trust,” said Griswold, “that the prisoner, whom we cannot for a
moment concede to be the real Appleweight, will not be exposed to
scarlet fever, pending a settlement of this matter. It is my
understanding that the Bizet ’82 is a fraudulent vintage that has
never been nearer France than Paris, Illinois, and if the prisoner in
your cellar drinks of it I shall hold you officially responsible for the
consequences. And now, I have the honour to bid you both good-
morning.”
He and Barbara swung their horses round and retraced their way,
leaving Ardmore and Jerry gazing after them.
When the shabby beasts from the stable at Turner Court House had
borne Miss Osborne and Griswold out of sight beyond the bungalow,
Ardmore turned blankly to Jerry.
“Have I gone blind or anything? Unless I’m crazy that was dear old
Grissy, but who is that girl?”
“That is Miss Barbara Osborne, and I hope she has learned such a
lesson that she will not be snippy to me any more, if she is the
president-general of the Daughters of the Seminole War.”
“But where do you suppose she found Grissy?”
“I don’t know, I’m sure; nor, Mr. Ardmore, do I care.”
“He said he represented the state of South Carolina—do you
suppose the governor has really employed him?”
“I do not,” said Jerry emphatically; “for he appears intelligent, and
intelligence is something that would never appeal to Governor
Osborne. It is quite possible,” mused Jerry aloud, “that Miss
Osborne’s father had disappeared like mine, and that she is running
his office with Mr. Griswold’s aid. If so, we shall probably have some
fun before we get through with this.”
“If that’s true we shall have more than fun!” exclaimed Ardmore,
thoroughly aroused. “You don’t know Grissy. He’s the smartest man
alive, and if he’s running this Appleweight case for Governor
Osborne, he’ll keep us guessing. Why did I ever send him that
scarlet fever telegram, anyhow? He’ll fight harder than ever for that,
and all I wanted was to keep him away until we had got all through
with this business here, so I could show him what a great man I had
been, and how I had been equal to an opportunity when it offered.”
“I wish you to remember, Mr. Ardmore, that you still have your
opportunity, and that I expect you to carry this matter through to a
safe conclusion and to the honour of the Old North State.”
“I have no intention of failing, Miss Dangerfield;” and with this they
turned and rode slowly back toward the house.
Professor Griswold and Miss Osborne were silent until the forest
again shut them in.
Then, in a sequestered spot, Griswold suddenly threw up his head
and laughed long and loud.
“It doesn’t strike me as being so amusing,” remarked Miss Osborne.
“They have Appleweight in their wine cellar, and I don’t see for the
life of me how we are going to get him out.”
“What’s funny, Miss Osborne, is Ardy—that he and I should be pitted
against each other in a thing of this kind is too utterly ridiculous. Ardy
acting as governor of North Carolina beats anything that ever
happened on this continent. But how do you suppose he ever met
Miss Dangerfield, who certainly is a self-contained young woman?”
“The answer to that riddle is so simple,” replied Miss Osborne, “that I
am amazed that you fail to see it for yourself. Miss Dangerfield is
undoubtedly the girl with the winking eye.”
“Oh no!” protested Griswold.
“I don’t hesitate to announce that as a fact. Miss Geraldine
Dangerfield, beyond any question, is the young lady whom Mr.
Ardmore, your knight-errant friend, went forth for to seek. Just how
they met we shall perhaps learn later on. But just now it seems
rather necessary for us to adopt some plan of action, unless you feel
that you do not wish to oppose your friend.”
“Oppose him! I have got to whip him to the dust if I shake down the
very towers of his stronghold! It’s well we have the militia on the
road. With the state army at our back we can show Tommy Ardmore
a few things in state administration that are not dreamed of in his
philosophy.”
“Do you suppose they really have Appleweight?” asked Barbara.
“Not for a minute! They told us that story merely to annoy us when
they found what we were looking for. That touch about the wine
cellar is characteristically Ardmoresque. If they had Appleweight you
may be sure they wouldn’t keep him on the premises.”
Whereupon they rode back to Turner Court House much faster than
they had come.
 CHAPTER XV.
THE PRISONER IN THE CORN-CRIB.

Jerry and Ardmore sat at a long table in the commodious Ardsley

library, which was a modification of a Gothic chapel. It was on the
upper floor, with broad windows that had the effect of bringing the
landscape indoors, and the North Carolina sky is, we must concede,
a pleasant thing to have at one’s elbow. A large accumulation of mail
from the governor’s office at Raleigh had been forwarded, and Jerry
insisted that it must be opened and disposed of in some way.
Governor Dangerfield was, it appeared, a subscriber to a clipping
bureau, and they had been examining critically a batch of cuttings
relating to the New Orleans incident. Most of them were in a frivolous
key, playfully reviving the ancient query as to what the governor of
North Carolina really said to the governor of South Carolina. Others
sought causes for the widely-reported disappearance of the two
governors; and still other reports boldly maintained that Governors
Dangerfield and Osborne were at their capitals engaged in the duties
of their respective offices.
“It’s a good thing we got hold of Collins,” observed Ardmore, putting
down a clipping from a New York paper in which the reports of
Governor Dangerfield’s disappearance were analyzed and tersely
dismissed; “for he knows how to write, and he’s done a splendid
picture of your father on his throne attending to business; and his
little stingers for Osborne are the work of genius.”
“There’s a certain finish about Mr. Collins’s lying that is refreshing,”
replied Jerry, “and I cannot help thinking that he has a brilliant future
before him if he enters politics. Nothing pains me more than a
careless, ill-considered, silly lie, which is the best that most people
can do. But it would be very interesting to know whether Governor
Osborne has really disappeared, or just how your friend the Virginia
professor has seized the reins of state. Do you suppose he got a jug
from somewhere, and met Miss Osborne and——”
“Do you think—do you think—she may have—er—possibly—closed
one eye in his direction?” asked Ardmore dubiously.
“Mr. Ardmore”—and Jerry pointed at him with a bronze paper-cutter
to make sure of his attention—“Mr. Ardmore, if you ever imply again
by act, word, or deed that I winked at you I shall never, never speak
to you again. I should think that a man with a nice sister like Mrs.
Atchison would have a better opinion of women than you seem to
have. I never saw you until you came to my father’s house to tell me
about the jug—and you know I didn’t. And as for that Barbara
Osborne, while I don’t doubt that even in South Carolina a Daughter
of the Seminole War might wink at a gentleman in a moment of
extreme provocation, I doubt if she did, for she lacks animation, and
has no more soul than a gum overshoe.”
The obvious inconsistency of this pronouncement caused Ardmore
to frown in the stress of his thought; and he stared helplessly along
the line of the accusing paper-cutter into Jerry’s eyes.
“Oh, cheer up!” she cried in her despair of him; “and forget it, forget
it, forget it! I’ll say this to you, Mr. Ardmore, that if I ever winked at
you—and I never, never did—I’m sorry I did it! Some time when you
haven’t so much work on your hands as you have this morning just
think that over and let me know where you land. And now, look at
these things, please.”
“What is all this stuff?” he demanded, as she tossed him a pile of
papers.
“They refer to the application for pardon of a poor man who’s going
to be hanged for murder to-morrow unless we do something for him;
and he has a wife and three little children, and he has never
committed any other crime but to break into a smoke-house and
steal a side of bacon.”
“Did he shoot in self-defence, or how was it?” asked Ardmore
judicially.
“He killed a painless dentist who pulled the wrong tooth,” answered
Jerry, referring to the papers.
“If that’s all I don’t think we can stand for hanging him. I read a piece
against capital punishment in a magazine once, and the arguments
were very strong. The killing of a dentist should not be a crime
anyhow, and if you know how to pardon a man, why let’s do it; but
we’d better wait until the last minute, and then send a telegram to the
sheriff to stop the proceedings just before he pulls the string, which
makes it most impressive, and gives a better effect.”
“I believe you are right about it,” said Jerry. “There’s an old pardon
right here in this bundle which we can use. It was made out for
another man who stole a horse that afterwards died, which papa said
was a mitigating circumstance; but the week before his execution the
man escaped from jail before papa could pardon him.”
“Suppose we don’t let them hang anybody while we’re running the
state,” suggested Ardmore; “it’s almost as though you murdered a
man yourself, and I couldn’t tie my neckties afterwards without a
guilty feeling. I can’t imagine anything more disagreeable than to be
hanged. I heard all of Tristan und Isolde once, and I have seen half
an Ibsen play, and those were hard things to bear, but I suppose
hanging would be just as painful, and there would be no supper
afterwards to cheer you up.”
“You shouldn’t speak in that tone of Afterwards, Mr. Ardmore,” said
Jerry severely. “It isn’t religious. And while we’re on the subject of
religion, may I ask the really, truly wherefore of Miss Daisy Waters’s
sudden return to Newport?” and Jerry’s tone and manner were
carelessly demure.
“She went home,” replied Ardmore, grinning; “she left Ardsley for two
reasons, one of which she stated at the breakfast-table and the other
she handed me privately.”
“She said at the breakfast-table that she was called home by
incipient whooping-cough in the household of her brother-in-law’s
cousin’s family.”
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