Lahore University of Management Sciences

ACCT 221 Corporate Financial Reporting

Fall Semester 2016
Instructors
Room No.
Office Hours
Email
Telephone
Secretary/TA
TA Office Hours
Course URL (if any)

Atifa Dar / Waqar Ali

416 / 422
TBA
Atifa.Dar@lums.edu.pk / Waqar_Ali@lums.edu.pk
042-3560-8394
Secretary: Kashif Saeed / Ahmad Ali TA: TBA
TBA
http://suraj.lums.edu.pk/~ro/

COURSE BASICS
Credit Hours
Lecture(s)
Recitation/Lab (per week)
Tutorial (per week)

3
2
On need basis
On need basis

Duration
Duration
Duration

75 minutes
On need basis
On need basis

COURSE DISTRIBUTION
Core
Elective
Open for Student Category
Close for Student Category

Core

COURSE DESCRIPTION
The course builds on your knowledge of accounting theory and techniques as used to record, process, and report financial
information. While some emphasis is placed on analysis, interpretation, and use of accounting data for investing, credit, and
management decisions, the reporting function of accounting to external users (investors and creditors) will be stressed.
Current financial reporting and disclosure requirements, plus controversial and emerging practices, will be discussed in class. The
course will examine asset and income determination, preparation and interpretation of financial statements, and related
disclosure requirements. Please note that this course is a building block for the financial reporting issues encountered in the
daily professional life.

COURSE PREREQUISITE(S)

ACCT 100 Principles of Financial Accounting

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COURSE OBJECTIVES & LEARNING OUTCOMES
Upon successful completion of the course, students should be able to:
1. Demonstrate understanding of the fundamental concepts, mainstream theories, international accounting
standards and practices in financial reporting;
2. Identify financial reporting issues faced by investors in analyzing different companies based on financial
reporting standards;
3. Apply financial reporting requirements to ascertain financial position, financial performance and cash flows of
companies of diverse nature.
4. Discuss and debate a variety of topics in emerging areas of accounting and their relevance to business financial
decisions including the ethical and global perspectives;
5. Present and defend their analysis and recommendations effectively, both in oral and written forms. (General
Learning Goal)

UNDERGRADUATE PROGRAM LEARNING GOALS & OBJECTIVES

General Learning Goals & Objectives
Goal 1 Effective Written and Oral Communication
Objective: Students will demonstrate effective writing and oral communication skills
Goal 2 Ethical Understanding and Reasoning
Objective: Students will demonstrate that they are able to identify and address ethical issues in an organizational
context.
Goal 3 Analytical Thinking and Problem Solving Skills
Objective: Students will demonstrate that they are able to identify key problems and generate viable solutions.
Goal 4 Application of Information Technology
Objective: Students will demonstrate that they are able to use current technologies in business and management
context.
Goal 5 Teamwork in Diverse and Multicultural Environments
Objective: Students will demonstrate that they are able to work effectively in diverse environments.
Goal 6 Understanding Organizational Ecosystems
Objective: Students will demonstrate that they have an understanding of Economic, Political, Regulatory, Legal,
Technological, and Social environment of organizations.
Major Specific Learning Goals & Objectives
Goal 7 (a) Discipline Specific Knowledge and Understanding
Objective: Students will demonstrate knowledge of key business disciplines and how they interact including
application to real world situations (including subject knowledge).
Goal 7 (b) Understanding the science behind the decision-making process (for MGS Majors)
Objective: Students will demonstrate ability to analyze a business problem, design and apply appropriate
decision-support tools, interpret results and make meaningful recommendations to support the decision-maker
Indicate below how the course learning objectives specifically relate to any program learning goals and objectives.

MAPPING OF OBJECTIVES
PROGRAM LEARNING GOALS
AND OBJECTIVES

COURSE LEARNING OBJECTIVES

COURSE ASSESSMENT ITEM

Goal 1 Effective Written and Oral

Communication

Students get a number of opportunities to

demonstrate their ability to communicate
effectively (CLO #5)

CP, Quiz and Exam

Goal 2 Ethical Understanding and

Reasoning

Ethical perspectives in some of the case studies

are highlighted (CLO #4)

CP, Quiz and Exam

Lahore University of Management Sciences

Goal 3 Analytical Thinking and
Problem Solving Skills
Goal 4 Application of Information
Technology
Goal 5 Teamwork in Diverse and
Multicultural Environments
Goal 6 Understanding
Organizational Ecosystems

Goal 7 (a) Discipline Specific

Knowledge and Understanding
(Subject Knowledge)
Goal 7 (b) Understanding the
science behind the decisionmaking process

Major Goal: Analytical thinking and problem

solving skills are essential for success in this
course (CLO #1-3)
Introduction and Use of e-learning software

CP, Quiz, and Exam

Discussion and debate thereon of diverse topics in

classroom will allow this objective to be met.
Develop students understanding of the
interaction of firm specific variables with the
securities markets, industry, and the economy
(CLO #4)
Major Goal: Comprehensive coverage of topics in
CFR (CLO #1-5)

CP

N/A

N/A

Assignments, Cases

CP, Quiz and Exam

CP, Quiz and Exam

GRADING BREAKUP AND POLICY

Class Participation & Attendance: 10%
Quizzes:
25%
Midterm:
30%
Group Presentation:
5%
Final Examination:
30%
Course Instructions:
Quizzes will be announced and there will be no makeup quizzes. If you miss more than 5 classes you will automatically get an F
grade in the course. You are expected to be punctual and seated before the class starts. A zero minute policy holds and late arrival
will mean zero class participation for that session. It is important to note that the course structure is integrated and missing a class
will have a negative impact on understanding of concepts and performance.

EXAMINATION DETAIL

Quizzes

Yes/No: Yes
Combine/Separate: TBA
Duration: TBA
Preferred Date: TBA
Exam Specifications: TBA

Midterm Exam

Yes/No: Yes
Combine/Separate: TBA
Duration: TBA
Preferred Date: TBA
Exam Specifications: TBA

Final Exam

Yes/No: Yes
Combine Separate: TBA
Duration: TBA
Exam Specifications: TBA

Lahore University of Management Sciences

Lectures
1-2

Chapter: Title /
Topic / IAS or IFRS
Chapter 2:
Conceptual
Framework for
Financial
Reporting / IAS 1

3-4

Chapter 10:
Acquisition and
Disposal PPE (incl.
Borrowing Costs) /
IAS 16, 23 & 40

Chapter 11:
Depreciation,
Impairment and
Depletion / IAS 16,
& 36

6-7

Chapter 12:
Intangible Assets /
IAS 38

9 - 11

Chapter 9:
Inventories:
Additional
Valuation Issues

Chapter 18:
Revenue
Recognition / IFRS

SESSION OBJECTIVES
1. Describe the usefulness of a conceptual framework.
2. Describe efforts to construct a conceptual framework.
3. Understand the objective of financial reporting.
4. Identify the qualitative characteristics of accounting information.
5. Define the basic elements of financial statements.
6. Describe the basic assumptions of accounting.
7. Explain the application of the basic principles of accounting.
8. Describe the impact that the cost constraint has on reporting accounting
information.
1. Describe property, plant, and equipment.
2. Identify the costs to include in the initial valuation of property, plant, and
equipment.
3. Describe the accounting problems associated with self-constructed assets.
4. Describe the accounting problems associated with interest capitalization.
5. Understand accounting issues related to acquiring and valuing plant assets.
6. Describe the accounting treatment for costs subsequent to acquisition.
7. Describe the accounting treatment for the disposal of property, plant, and
equipment.
8. Overview of investment properties and their accounting treatment.
9. Distinguish between investment properties and property, plant and equipment.
1. Explain the concept of depreciation.
2. Identify the factors involved in the depreciation process.
3. Compare activity, straight-line, and diminishing-charge methods of depreciation.
4. Explain component depreciation.
5. Explain the accounting issues related to asset impairment.
6. Explain the accounting procedures for depletion of mineral resources.
7. Explain the accounting for revaluations.
8. Explain how to report and analyze property, plant, equipment, and mineral
resources.
1. Describe the characteristics of intangible assets.
2. Identify the costs to include in the initial valuation of intangible assets.
3. Explain the procedure for amortizing intangible assets.
4. Describe the types of intangible assets.
5. Explain the accounting issues for recording goodwill.
6. Explain the accounting issues related to intangible asset impairments.
7. Identify the conceptual issues related to research and development costs.
8. Describe the accounting for research and development and similar costs.
9. Indicate the presentation of intangible assets and related items.
1. Describe and apply the lower-of-cost-or- net realizable value rule.
2. Explain when companies value inventories at net realizable value.
3. Explain when companies use the relative standalone sales value method to value
inventories.
4. Discuss accounting issues related to purchase commitments.
5. Determine ending inventory by applying the gross profit method.
6. Determine ending inventory by applying the retail inventory method.
7. Explain how to report and analyze inventory.
1. Understand revenue recognition issues.
2. Identify the five steps in the revenue recognition process.
3. Identify the contract with customers.

Lahore University of Management Sciences

15

12 - 13

Chapter 13:
Current Liabilities,
Provisions and
Contingencies /
IAS 37

14

Chapter 23:
Statement of Cash
Flows

15
16 - 17

Midterm
Chapter 15: Equity
(excl. Appendix)

18 - 19

Chapter 17:
Investments (excl.
Appendices) / IAS
32 & IFRS 9

20

Chapter 22:
Accounting
Changes and Error
Analysis / IAS 8

4. Identify the separate performance obligations in the contract.

5. Determine the transaction price.
6. Allocate the transaction price to the separate performance obligations.
7. Recognize revenue when the company satisfies its performance obligation.
8. Identify other revenue recognition issues.
9. Describe presentation and disclosure regarding revenue.
*10.
Apply the percentage-of-completion method for long-term contracts.
*11.
Apply the cost-recovery method for long-term contracts.
*12.
Identify the proper accounting for losses on long-term contracts.
*13.
Explain revenue recognition for franchises.
1.
Describe the nature, type, and valuation of current liabilities.
2.
Explain the classification issues of short-term debt expected to be refinanced.
3.
Identify types of employee-related liabilities.
4.
Explain the accounting for different types of provisions.
5.
Identify the criteria used to account for and disclose contingent liabilities and
assets.
6.
Indicate how to present and analyze liability-related information.
1.
Describe the purpose of the statement of cash flows.
2.
Identify the major classifications of cash flows.
3.
Prepare a statement of cash flows.
4.
Differentiate between net income and net cash flow from operating activities.
5.
Determine net cash flows from investing and financing activities.
6.
Identify sources of information for a statement of cash flows.
7.
Contrast the direct and indirect methods of calculating net cash flow from operating
activities.
8.
Discuss special problems in preparing a statement of cash flows.
9.
Explain the use of a worksheet in preparing a statement of cash flows.
1.
Discuss the characteristics of the corporate form of organization.
2.
Identify the key components of equity.
3.
Explain the accounting procedures for issuing shares.
4.
Describe the accounting for treasury shares.
5.
Explain the accounting for and reporting of preference shares.
6.
Describe the policies used in distributing dividends.
7.
Identify the various forms of dividend distributions.
8.
Explain the accounting for share dividends and share splits.
9.
Indicate how to present and analyze equity.
1.
Describe the accounting framework for financial assets.
2.
Understand the accounting for debt investments at amortized cost.
3.
Understand the accounting for debt investments at fair value.
4.
Describe the accounting for the fair value option.
5.
Understand the accounting for equity investments at fair value.
6.
Explain the equity method of accounting and compare it to the fair value method
for equity investments.
7.
Discuss the accounting for impairments of debt investments.
8.
Describe the accounting for transfer of investments between categories.
1.
2.
3.
4.

Identify the two types of accounting changes.

Describe the accounting for changes in accounting policies.
Understand how to account for retrospective accounting changes.
Understand how to account for impracticable changes.

Lahore University of Management Sciences

21

22

23

24 - 26

27 28

IAS 10 / Handout /
Chapter 24:
Presentation and
Disclosure (excl.
Appendices)
IAS 34 / IFRS 5 /
Handout / Chapter
24: (as above)

IAS 24 / Handout /
Chapter 24: (as
above)
Consolidation,
Associates & Joint
Ventures / IFRS 3
& IAS 28

Group
Presentations

5.
Describe the accounting for changes in estimates.
6.
Describe the accounting for correction of errors.
7.
Identify economic motives for changing accounting policies.
8.
Analyze the effect of errors.
Events after the reporting date:
(i) Distinguish between and account for adjusting / non-adjusting events after the
reporting date.
(ii) Identify items requiring separate disclosure, including their accounting treatment
and required disclosures.
1. The understanding of the need of interim financial statements.
2. Specific implementation issues.
3. Describe the accounting problems associated with interim reporting.
4. Discuss the importance of identifying and reporting the results of discontinued
operations.
5. Define and account for non-current assets held for sale and discontinued
operations.
6. Indicate the circumstances where separate disclosure of material items of income
and expense is required.
1. Discuss the disclosure requirements for related-party transactions.
2. Indicate the effect that the related party relationship may have on the separate and
the consolidated financial statements.
1.
Describe the concept of a group as a single economic unit.
2.
Explain and apply the definition of a subsidiary within relevant accounting
standards.
3.
Identify and outline using accounting standards and other applicable regulation the
circumstances in which a group is required to prepare consolidated financial statements.
4.
Describe the circumstances when a group may claim exemption from the
preparation of consolidated financial statements.
5.
Explain why directors may not wish to consolidate a subsidiary and outline using
accounting standards and other applicable regulation the circumstances where this is
permitted.
6.
Explain the need for using coterminous year ends and uniform accounting polices
when preparing consolidated financial statements.
7.
Explain why it is necessary to eliminate intragroup transactions.
1. Students will present to the class on reporting requirements around one of the
disclosure areas (financial statement items) covered above.
2. They would relate in their presentation these requirements to extracts from the
audited accounts of a business.

TEXTBOOK(S)/SUPPLEMENTARY READINGS
Recommended Textbook:
Intermediate Accounting, 2nd edition, Kieso, Weygandt, Warfield.
Supplementary Material:
IAS/IFRS Text
Further material provided during course progress.