UNIVERSITAS KLABAT

FAKULTAS EKONOMI

Universitas Klabat is committed to excellence in Sevent-day Adventist Christian education and strives to create
an environment where students can develop noble characters for eternity and where they can acquire the
values, knowledge, and skills necessary for a lifetime leadership, service, and responsible citizenship.

COURSE OUTLINE ADVANCED ACCOUNTING 1

1st SEMESTER, SCHOOL YEAR 2014/2015
Course Title:
Course Number:
Lecturer:
e-mail:
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Advanced Accounting I
AKUN 410 (3 credits)
Dr. Stanley S. Nangoy
jonan_nangoy@yahoo.com
https://groups.yahoo.com/group/unklab-advancedaccounting
unklab-advancedaccounting@yahoogroups.com

Required Texts :
1. Beams, F.A., Anthony, J.H., Bettinghaus, B., Smith, K. 2012, Advanced Accounting 11th
edition, Upper Saddle River, New Jersey; Pearson Prentice Hall International edition
(ISBN 0-13-283036-1)
2. Hoyle, Schaefer, Doupnik, 2012, Advanced Accounting 8th edition, New York; Irwin
McGraw-Hill Publishing (ISBN 0-07-299188-7)
3. Source of Information from internet related topics.
Course Description
This course is a comprehensive study of business combinations, the equity and cost methods
of accounting for investments in common stock, and consolidated financial statement
preparation. Furthermore this course explores topics such as Intercompany Profit
Transactions, Changes in Ownership Interests, Indirect and Mutual Holdings, Subsidiary
Preferred Stocks, Consolidated EPS & Income Taxation, Consolidation Theories Push-Down
Accounting, Joint Venture, and Derivatives & Foreign Currencies.
Prerequisite: AKUN 313
.

Course Objectives:
Students will be required to analyse corporate financial records and address specialized
advanced accounting issues in Business Combination and Stock Ownership & Investment.

Upon successful conclusion of Advanced Accounting I, students are expected to understand

and be able to analyse/prepare/record/report:
1. Accounting for Business Combination.
2. Accounting for Stock Investments when significant influence and control exist.
3. Consolidated Financial Statements and the Consolidation Process.
4. Intercompany transactions- Inventories, Plant Assets, Bonds.
5. Consolidations-Changes in Ownership Interests.
6. Indirect Mutual Holdings.
7. Subsidiary Preferred stocks, Consolidated Earnings per Share, and Consolidated
Income Taxation.
8. Consolidation theory, Push-Down Accounting and Corporate Joint Ventures
9. Derivatives and Foreign Currency: Concepts and Common Transactions
This course seeks to prepare students for careers in both private and public accounting,
finance, and business consulting. Specifically, it is intended to promote honesty and
integrity in dealing with accounting issues as well as good judgment, critical thinking and
technical competency, help develop life-long research skills, foster communication skill
development.
Learning Method and Class requirements
1.

There will be two sessions per week which will include lectures, and activities in
exploring the latest Generally Accepted Accounting Principles (GAAP) as well as Prinsip-prinsip
Akuntansi Indonesia (PAI) in analysing corporate business transactions, then use excel based
spread sheet program in solving accounting exercises, problems and evaluations.

2.

Each student needs to buy the text-book, in order to participate in the class activities.

3.

Regular class attendance is required.

4.

Students are required to join the class interactive groups at

https://groups.yahoo.com/group/unklab-advancedaccounting

5.

Students are encouraged to read widely not limiting one to prescribed books but to
any books, magazines, journals, web-sites which cover a particular topic being learnt in class.

6.

Students are encouraged to work in groups when doing exercises, problems and their
homework. However quizzes and chapter tests will be conducted regularly to assess individual
understanding for each topic discussed during the week.

7.

Students should adequately prepare for quizzes, tests and examinations.

Meetings and Topics Presentation

Date
18, 20 August

25,27 August

1, 3 September

8 September
10, 15
September

Topics

Learning Objectives
Understanding the economic motivations
underlying business combination.
Learn about alternative forms of business
combination, from both the legal and
Chapter 1 :
accounting perspective.
Business Combination
Introduce accounting concepts for business
combinations, emphasizing the acquisition
methods.
See how firms record fair values of assets and
liabilities in an acquisition.
Recognize investors varying levels of
influence or control, based on the level of
stock ownership.
Anticipate how accounting adjusts to reflect
the economics underlying varying levels of
Chapter 2:
investor influence.
Stock Investment- Investor Apply the fair value/cost and equity methods
Accounting and Reporting
of accounting for stock investment.
Identify factors beyond stock ownership that
affect an investors ability to exert influence
or control over an investee.
Apply the equity method to stock investment
Learn how to test goodwill for impairment
Recognize the benefits and limitations of
consolidated financial statements
Understand requirements for including a
subsidiary in consolidated financial
statement
Apply consolidation concepts to parent
company recording of an investment in a
subsidiary company at the date of acquisition
Record the fair value of the subsidiary at the
Chapter 3:
date of acquisition
An Introduction to

Learn the concept of non-controlling interest

Consolidated Financial
when a parent company acquires less than
Statements
100% of subsidiarys outstanding common
stock
Prepare consolidated balance sheets
subsequent to the acquisition date, including
preparation of eliminating entries
Amortize the excess of fair values over the
book value in the periods subsequent to the
acquisition
Apply the concepts underlying preparation
of a consolidated income statement
Create an electronic spreadsheet to prepare a
consolidated statement
Test 1
Chapter 1, 2, 3
Prepare consolidated work paper for the year of
acquisition when parent uses the complete

Chapter 4 :
Consolidation
Techniques and Procedures

17, 22
September

Chapter 5:
Intercompany Profit
Transaction- Inventories

24, 29
September

Chapter 6:
Intercompany Profit
transactions- Plant Assets

1 October

Midterm Exams

equity method to account for its investment

in a subsidiary
Prepare consolidation work paper for the years
subsequent to acquisition
Locate errors in consolidation work
paper
Assign fair value to identifiable net assets
Apply concepts to prepare a consolidated
statement of cash flows
Create electronic spreadsheet to prepare a
consolidation work paper
Understand the alternative trial balance
consolidation work paper format
Understand differences in consolidation work
paper techniques when the parent company
uses either an incomplete equity method or
the cost method
Understand the impact of intercompany profit
in inventories on preparing consolidation
work papers
Apply the concepts of up-steams versus downstreams inventory transfers
Defer unrealized inventory profits remaining in
the ending inventory
Recognize realized, previously deferred
inventory profits in the beginning inventory.
Adjust calculation of non-controlling interest
amounts in the presence of intercompany
inventory profits.
Understand differences in consolidation work
paper techniques related to intercompany
inventory profits when parent company uses
either an incomplete equity method or the
cost method.
Assess the impact of intercompany profit on
transfers of plant assets in preparing
consolidation work paper
Defer unrealized profits on plant assets
transfers by either the parent or subsidiary
Recognize realized previously deferred profits
on plant assets transfers
Adjust the calculation of non-controlling
interest share in the presence of
intercompany profits on plant assets transfers
Understand differences in consolidation work
paper techniques for plant asset transfers
when parent company uses either an
incomplete equity method or the cost method
Chapter 4, 5, 6

6, 8 October

Chapter 7:
Intercompany Profit
Transactions- Bonds

13, 15, 20
October

Chapter 8:
Consolidations-Changes I
Ownership Interests

22, 27, 29
October

3 November
10, 12, 17
November

19, 24
November

Differentiate between intercompany receivables

and payables, and assets or liabilities of the
consolidated. Reporting entity.
Demonstrate how how a consolidated reporting
entity constructively retires debt.
Defer unrealized gains/losses and later
recognize realized gains/losses on bond
transfers between parent and subsidiary.
Adjust calculation of non-controlling interest
share amounts in the presence of
intercompany gains/losses on debts transfer
Electronic supplement for account for bond
transactions by both investors and issuers
Electronic supplement:
Understand differences in consolidation work
paper techniques for debt transfers when
parent company uses either an incomplete
equity method or the cost method
Prepare consolidated Statement when parents
ownership percentage increases or
decreases during the reporting periods.
Apply consolidation procedures to interim
acquisitions.
Record subsidiary/investee stock issuances
and treasury stock transactions

Prepare consolidated statements when the

Chapter 9:
parents controls through indirect holdings.
Indirect and Mutual Holdings
Apply consolidation procedures to the special
case of mutual holdings.
Test 3

Chapter 7, 8, 9

Modify consolidation procedures for subsidiary

with outstanding preferred stock.
Chapter 10:
Subsidiary Preferred Stocks, Calculate basic and diluted EPS for
consolidated entity.
Consolidated Earnings per
share and consolidated Income Understand the complexities of accounting for
taxation
income taxes by consolidated entities.
Electronic supplement : Account for branch
operations
Compare and contrast the elements of
consolidation approaches under traditional,
parent company, and contemporary/entity
theory
Chapter 11:
Consolidation Theories, Push- Adjust subsidiary assets and liabilities to fair
values using push-down accounting
down accounting, and corporate
joint venture
Account for corporate and unincorporated joint
ventures
Identify variable interest entity
Consolidate a variable interest entity

26, November
1 December

Chapter 12:
Derivatives and Foreign
Currency- Concepts and
common transactions

3-10
December

Final Exams

Grading system
1. Class Attendance
2. Quizzes
3. Group Assignment

: 10 %
: 10 %
:5%

Understand the definition of a derivative and

the types of risks that derivatives can
manage.
Understand the structure, benefits, and costs of
options, futures, forward contracts and
swaps.
Understand key concepts related to foreign
currency exchange rate, such as indirect and
direct quotes; floating, fixed and multiple
exchange rates; and spot, current and
historical exchange rates.
Explain the difference between receivable or
payable measurement and denomination.
Record foreign currency- denominated sales/
receivables, and purchases/payables at the
initial transaction date, year-end, and the
receivable or payable settlement date
Chapter 10, 11, 12

4. Chapter tests
5. Midterm test
6. Final Exams

: 25%
: 25%
: 25%