Formal power series over a local ring ($(A[[x]],\mathfrak{m}A[[x]]+(x))$)

If $(A,\mathfrak{m})$ is a local ring, then $B=A[[x]]$ is local with maximal ideal $I=\mathfrak{m}B+xB$ and residue field $A/\mathfrak{m}$. A series $f=\sum a_n{x}^n$ is a unit if and only if $a_0$ is a unit. Necessity follows by taking constant coefficients of an inverse; sufficiency follows from the recursion $b_0=a_0^{-1}$ and $b_n=-a_0^{-1}{\sum }_{i=1}^n{a}_i{b}_{n-i}$ for its inverse. Thus the nonunits are precisely series with $a_0\in \mathfrak{m}$, which is exactly $I$, since $f=a_0+xg$. The constant-coefficient map followed by reduction modulo $\mathfrak{m}$ has kernel $I$ and image $A/\mathfrak{m}$.

For a local ring $(A,\mathfrak{m})$ with residue field $k$, put $B=A[[x]]$ and $I=\mathfrak{m}B+xB$. There is a natural $k$-vector space isomorphism $I/I^2\cong (\mathfrak{m}/{\mathfrak{m}}^2)\oplus k$. The inverse sends $(\bar{a},\bar{b})$ to the class of $a+bx$. It is well-defined because changing $a$ by ${\mathfrak{m}}^2$ or $b$ by $\mathfrak{m}$ changes the result by $I^2$. It is surjective since every $f\in I$ is congruent modulo $x^{2}B\subseteq I^2$ to its constant and linear terms. As $I^2={\mathfrak{m}}^{2}B+x\mathfrak{m}B+x^{2}B$, those coefficients of an element of $I^2$ lie in ${\mathfrak{m}}^2$ and $\mathfrak{m}$, respectively. This proves injectivity. Thus adjoining one formal variable increases finite embedding dimension by one.