INDIAN INSTITUTE OF MANAGEMENT INDORE

POSTGRADUATE PROGRAM IN MANAGEMENT 2012-14

ACADEMIC YEAR 2012-2013 TERM I

Managerial Accounting and Control I (MAC I)
Course outline

INSTRUCTORS

Prof. Hariprasad B.
Prof. Neeta Nagar
Prof. Vijay Kumar Gupta

COURSE OBJECTIVES

Accounting is the language of business. It attempts to measure and report corporate performance.
Users of financial statements demand the performance measure in a variety of decisions they
make. Managers use accounting in making decisions; while investors use it for valuing stocks.
The bankers and lender rely on accounting information to decide to whether to lend money to
business. The accounting information is also crucial in evaluating the performance of employees
at various levels in an organization. This course is designed with the following objectives:
(i) Help the participants to become intelligent users of accounting information
(a) Understand the rules and managements discretion
(b) Understand what explains the rules and the type of management discretion
(c) Understand how events affect firm value
(ii) Make the participants comfortable looking through an annual report
(iii) Develop the ability in participants to use financial statements to assess a
companys performance
(iv) Participants to get a sense of the limitations of financial statement data


PEDAGOGY:
Cases,minicases and annual report discussion.

TEXT:
Accounting: Text and Cases, (12
th
Edition)
Robert N Anthony, David F Hawkins and Kenneth A Merchant (AHM)

EVALUATION

Quizzes 25%
Mid-term Examination 25%
End-term Examination 30%
Case Analysis / Home Assignments 20%

SESSION SCHEDULE


MODULE 1: PREPARATION OF FINANCIAL STATEMENTS


Session 1: Balance Sheet
Reading: AHM: Chapter 2: Basic Accounting Concepts: The Balance Sheet
Case: Smoky Valley Caf


Sessions 2: Income Statement An Introduction
Reading: AHM: Chapter 3: Basic Accounting Concepts: The Income Statement
Case: Mansa Building [IIMA / F&A-0089R]


Sessions 3: Income Statement- Merchandising firms
Reading: (1)AHM: Chapter 4: Accounting Records and Systems
(2) Note on Accounting for Merchandising Companies
Case: AHM: Case 4 4: Waltham Oil and Lube Centre, Inc.


Sessions 4: Income Statement- Merchandising firms(contd.)
Reading: AHM: Chapter 4: Accounting Records and Systems
Case: AHM: Case 4 4: Waltham Oil and Lube Centre, Inc.


Session 5: Income Statement Manufacturing companies
Reading: AHM: Chapter 6: Cost of Sales and Inventories, pgs. 154-158
Case: Birla3M [IIMA / F&A-0462]

Session 6: Cash Flow Statement
Reading: AHM: Chapter 11: Statement of Cash Flows
Case: Chemalite, Inc. [B] [9-195-130]


Session 7: Cash Flow Statement (contd.)
Case: Chemalite, Inc. [B] [9-195-130]



MODULE 2: ACCOUNTING POLICIES AND MANAGERIAL CHOICES


Session 8 Revenue Recognition
Reading: AHM: Chapter 5: Revenue and Monetary Assets
Case: AHM: Case 5 2: Grennell Farm


Session 9 Issues in Revenue Recognition
Reading: Revenue Recognition and Reporting [9-101-050]
Case: Boston Automation [9-103-041]


Session 10 Accounting for Inventory
Reading: (1) AHM: Chapter 6: Cost of Sales and Inventories
(2) The Question of LIFO or FIFO: Which is Preferable? [9-104-087]
Case: Merrimack Tractors and Mowers, Inc.: LIFO or FIFO? [3217]


Session 11 Accounting for Depreciation
Reading: (1) AHM: Chapter 7: Long-lived Nonmonetary Assets and Their Amortization
(2) Accounting for Property, Plant, and Equipment and Other Assets [9-193-046]
Case: Depreciation at Delta and Singapore Airlines [9-198-001]


Session 12 Accounting for Long Lived Assets
Reading: (1) AHM: Chapter 7: Long-lived Nonmonetary Assets and Their Amortization
(2) Asset Reporting[9-101-014]
Case: Land Securities Group [A] [9-105-014]

Session 13 Accounting for Equity
Reading: AHM: Chapter 9: Sources of Capital: Owners Equity
Case: Kemp Foods Corporation [9-110-101]

Session 14 Accounting for Liabilities
Reading: AHM: Chapter 8: Sources of Capital: Debt
Case: Accounting for the Intel Pentium Chip Flaw [9-101-072]


Session 15 Accounting for Leases
Reading: (1) Lease Accounting and Analysis [9-100-003]
(2) Lease Reporting and Analysis
Case: A Note on Comdiscos Lease Accounting [9-196-122]


Session 16 Accounting for Income Taxes
Reading: Income Tax Reporting and Analysis
Case: Taxing situations: Two cases on income taxes and Financial Reporting [9-191-071]


MODULE 3 FINANCIAL STATEMENT ANALYSIS


Session 17 Understanding of Annual Report
Reading: AHM: Chapter 14: Understanding of Annual Report
Discussion: Annual Report of Hindustan Unilever Limited


Session 18 Understanding of Annual Report (contd.)
Reading: Financial Performance Reporting [9-103-046]
Discussion: Annual Report of Hindustan Unilever Limited


Session 19 Financial Statement Analysis
Reading: AHM: Chapter 13: Financial Statement Analysis
Case: Analyzing the Financial Statements of Hindustan Unilever Limited


Session 20 Review