Advanced Financial Accounting
Overview
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. In addition this course explores accounting theory as applied to special problems such as accounting for partnerships, segment and interim reporting. International accounting issues including foreign currency financial statement translation are also introduced in this course.
Students will be required to analyze the financial records of a company and address specialized accounting issues. Upon successful conclusion of Advanced Accounting, the course will have outlined the following topic areas:
l An Introduction to Business Combination Concepts and Definitions.
l Accounting for Stock Investments when significant influence and control exist.
l An Introduction to Consolidated Financial Statements and the Consolidation Process.
l An understanding of Partnership Accounting and Changes in Partnership Interests.
l An introduction to Global Accounting Standards and Diversity.
l Emphasize the importance of ethical behavior in Business.
Syllabus
l Part 1
The legal form of business combination; accounting concept of a business combination; accounting for business combination under the purchase method
l Part 2
Accounting for stock investment; equity method of accounting – A one-line consolidation; interim acquisition of an investment interest; investment in a step-by-step acquisition; sale of an equity interest; stock purchases directly from the investee; extraordinary items.
l Part 3
Business combination consummated through stock acquisitions; consolidated balance at date of acquisition; consolidated balance sheet after acquisition; allocation of excess to identifiable net assets and goodwill; consolidated income statement
l Part 4
Consolidation under the equity method; locating errors; excess allocated to identifiable net assets; consolidated statement of cash flows; preparing a consolidation worksheet.
l Part 5
Intercompany inventory transactions; downstream and upstream sales; unrealized profits from downstream sales; unrealized profits from up stream sales.
l Part 6
Intercompany profit on nondepreciable plant assets; intercompany profits on depreciable plant assets; plant assets sold at other than fair value; inventory items purchased for use as operating assets.
l Part 7
Intercompany bond transactions; constructive gains and losses on intercompany bonds; parent-company bonds purchased by subsidiary; subsidiary bonds purchased by parents.
l Part 8
Acquisitions during an accounting period; piecemeal acquisitions; sale of ownership interests; changes in ownership interests from subsidiary stock transactions; stock dividends and stock splits by a subsidiary.
l Part 9
Affiliation structures; indirect holdings—father-son-grandson structure; indirect holdings – connecting affiliates structure; mutual holdings --- parent stock held by subsidiary; subsidiary stock mutually held.
l Part 10
Foreign exchange concepts and definitions; foreign currency transactions other than forward contracts; accounting for derivative instruments and hedging activities; foreign currency derivatives and hedging activities.
l Part 11
Objectives of translation and the functional currency concept; application of the functional currency concepts; hedging a net investment in a foreign entity.
l Part 12
Partership