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Advanced Financial Accounting

(Public version, For details, please check

Advanced Financial Accounting

Instructor and Contact Information

Dr. Pearl Tan

Associate Professor (Education) Tel: (65) 6828-0221
Room 5027 Fax: (65) 6828-0600
School of Accountancy Email:
60 Stamford Road, Level 5
Singapore 178900

Course Prerequisite

You should have completed ACCT334 (Intermediate Financial Accounting).

Course Objectives

This course is designed to meet the following primary objectives:

1. To provide students sound and in-depth technical and conceptual knowledge of advanced
accounting topics relating to complex transactions with the primary themes of accounting for
group entities and derivative instruments. Specific topics include business combinations
involving a group structure, consolidation principles and processes, consolidation of multi-level
group structures, changes in ownership interests, consolidated cash flow statements, equity
accounting, translation of foreign operations and accounting for derivative l instruments.

2. To inculcate an attitude of independent learning. Given the rapid changes in the environment
of accounting, the pedagogy provides a platform for students to develop a life-long habit of
independently analyzing, deconstructing and determining conceptual shifts in Financial
Reporting Standards (FRS). Students also pre-empt emerging issues in accounting by analyzing
future standards or emerging issues in the group project or discussing news reports on business
developments and new transactions which may have implications on the future of accounting.

3. To foster analytical thinking and the use of related disciplines (e.g. business strategy and
finance) to analyze specific accounting standards and to execute the group project.

Pearl Tan, Singapore Management University

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Advanced Financial Accounting
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Learning Goals and Skills Developments

This course contributes to the development of the following learning goal regarding accounting

LO1.1 Our students can recognize, develop, measure, record, validate and communicate financial
and other related information

In particular, students are expected to demonstrate the following technical accounting competencies
upon successful completion of this course:

Understand, explain and critically evaluate the principles underlying the accounting of complex
transactions relating to business combinations, group reporting, foreign currency translation and
accounting for financial instruments.
Deconstruct financial reporting standards to determine their structures and basis of conclusions.
Undo transactions at a legal entity level and re-enact consolidation and equity accounting entries
for the economic entity.
Construct balances in consolidated financial statements.
Deconstruct and analyze non-controlling interests and investments in associates.
Translate foreign currency financial statements and foreign currency balances and transactions.
Analyze translation gains and losses.
Recognize, measure and analyze the effects of financial instruments on the financial statements.

However, learning outcomes should go beyond technical accounting competencies. In particular, this
course also seeks to develop the following attributes through various class and assessment activities:

Analytical skills: Cases and unstructured Preparation questions provide opportunities for students
to identify issues, perform mental mapping of the structures in Financial Reporting Standards, apply
relevant concepts and analyze accounting information within its complex economic setting.

Communication: Students sharpen their ability to articulate explanations of complex accounting

processes and opinions on accounting issues in classroom discussions as well as in their group
project. In presenting their answers in class, students explain the why of their answers and not
simply know the how of solving the problem.

Team work: The group project, group facilitation and classroom activities provide opportunities for
students to work in teams, to interact with other teams and to build their inter-personal skills. Peer-
review is invoked to assess contributions to team work.

Active learning: The attitude of independent learning underscores this course. Students are
expected to keep up to date with changes in Financial Reporting Standards, read widely from the
business press and share insights in class.

Professional ethics: The course emphasizes the importance of ethics and integrity in the execution
of group work and in other assessment processes.

Pearl Tan, Singapore Management University

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Advanced Financial Accounting
(Public version, For details, please check

Textbook and References

Main textbook:
Tan, Pearl, Chu Yeong, Lim and Lee, Peter, Advanced Financial
Accounting: An IAS and IFRS Approach, McGraw-Hill 2014 Second
Edition (Tan, Lim and Lee) available in SMU BookLink.

Accounting standards:

Financial Reporting Standards (FRS), copyright of Accounting Standards Council (ASC) can be
downloaded free of charge from Please download the latest version of all FRSs
including the revised FRS 103 (2009) and FRS 110 (2011).

Please download IFRS 9 from the IASBs website: (or the Singapore Accounting
Standards Council website or SMU Librarys database Comperio. Only one person
can gain access to Comperio at any point in time.

The IASBs website provides the standard but not its basis of conclusions. The standard and the
basis of conclusions can be downloaded from SMU Librarys database Comperio (click browse
InternationalAccounting and Corporate Reporting Standards and Interpretation
International Standards IFRS 9 Financial Instruments

FRS 7 Statement of Cash Flows

FRS 21 The Effects of Changes in Foreign Exchange Rates
FRS 27 Separate Financial Statements
FRS 28 Investments in Associates and Joint Ventures
FRS 32 Financial Instruments: Presentation
FRS 39 Financial Instruments: Recognition and Measurement
FRS 103 Business Combinations
FRS 110 Consolidated Financial Statements (effective for periods beginning 1 Jan 2014)
IFRS 9 Financial Instruments (effective for periods beginning 1 Jan 2015)

Electronic databases:

Academic articles are an important and examinable complement to the technical texts and references
that are listed above. Students may research on relevant articles to substantiate their findings in the
group project.

Business press (e.g. Economist, Asian Wall Street Journal, Business Times, Straits Times Money Pages
etc). Students may share their insights on a particular business report and its implications on accounting
in class or use their insights to support their findings in the group project.

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Advanced Financial Accounting
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To pass the course, a student is required to obtain a TOTAL mark of 50% or better. Please check Vista
for announcements on assessment. The assessment components are listed below:

A. Class Activities 15%

B. Group Project 15%
C. Quizzes and Tests 20%
D. Final Examination 50%
Total 100%

More details will be announced on elearn

Academic Integrity

All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication,
facilitation of acts of academic dishonesty by others, unauthorized possession of exam questions, or
tampering with the academic work of other students) are serious offences. All work (whether oral or
written) submitted for purposes of assessment must be the students own work. Penalties for violation
of the policy range from zero marks for the component assessment to expulsion, depending on the
nature of the offense. When in doubt, students should consult the instructors of the course. Details
on the SMU Code of Academic Integrity may be accessed at

In addition, you should refer to School of Accountancy Writing Guide for any written work submitted for
this course.

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Advanced Financial Accounting
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Class sessions are of 3-hour duration and will include a review of study materials, class discussions/activities
and case discussions, where appropriate.

Week No Topic Readings

1 I Introduction Tan, Lim & Lee, Ch. 2-4
Group Reporting I: Review of FRS 110
Business Combinations (FRS 103) and FRS 103
application to group entities

2 Group Reporting II: Consolidation Tan, Lim & Lee, Ch. 4&5
principles and process FRS 103 (2009)

3 Group Reporting II (continued) Tan, Lim & Lee, Ch. 5&6

FRS 110
Group Reporting III: Associates FRS 28

4 Group Reporting IV : Change in FRS 103

ownership interests FRS 110
Tan, Lim & Lee, Ch. 7

5 Group Reporting V: Multi-level Tan, Lim & Lee, Ch. 7


6 Group Reporting VI: Consolidated Tan, Lim & Lee, Ch. 7

Cash Flow Statements FRS 7

7 Review and special issues relating to

group reporting
9 Review of Translation of Foreign Tan, Lim & Lee, Ch. 8
Currency Transactions and Balances FRS 21

Foreign Currency Translation of

foreign operations
10 Foreign Currency Translation and Tan, Lim & Lee, Ch. 8
Consolidation FRS 21

11 Financial Instruments I: Review of Tan, Lim & Lee, Ch. 9

main principles FRS 39
Financial Instruments II: Hedge
accounting and accounting for Tan, Lim & Lee, Ch.10
derivatives FRS 39

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Advanced Financial Accounting
(Public version, For details, please check

Week No Topic Readings

12 Financial Instruments II (continued): As above

13 Financial Instruments II (continued) As above


14 Revision Week
15 Examination Week

Prepared by: Pearl Tan, 12 October 2014

Vetted by: Seow Poh Sun, 23 December 2014

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