Course Information

Course code
Course Title Advanced Financial Accounting I
Degree Program BA Degree in Accounting and Finance
Lecturer
information
ETCTS Credits 6
Contact Hours 4
Course Description This course addresses the skills needed to apply some selected standards in
business environments. The topics covered in the course include employee
benefits, income taxes, share-based compensation, agriculture, insurance
contracts, and asset valuation.

Course Objectives In this course students examine several complex topics and their effect on
financial reporting and disclosure. The course is designed to cover a selected
group of advanced financial accounting topics under IFRS.

Upon successful completion of this course the student will have reliably
demonstrated the ability to:
 Record, analyze and report financial information related to income taxes,
biological assets, insurance contracts, share-based compensations, and
employee benefits.
WEEKS Course Contents
1. Income Taxes
1.1. The tax base concept
1.2. Recognition of deferred tax liabilities and assets
1.2.1. Future taxable temporary differences
1.2.2. Future deductible temporary differences
1.3. Recognition of current and deferred tax
1.4. Accounting for net operating losses
1.5. Income tax presentation and disclosures

2. Share-based Compensation
2.1. Overview of Share-based Payments
2.2. Share-based Payments Settled with Equity
2.3. Share-based Payments Settled with Cash
2.4. Share-based Payments with Cash Alternatives
2.5. Counterparty Has Choice of Settlement
2.6. Issuer Has Choice of Settlement
2.7. Share-based Payment Disclosures

3. Accounting for Agriculture

3.1. Basic Terms and Scope
3.2. The Nature of Biological Assets
3.3. Recognition and Measurement of Biological Assets
3.4. Presentation and Disclosure Issues
 4. Insurance Contracts
4.1. Insurance Contract Aggregation
4.2. Initial Recognition of Insurance Contracts
4.3. Initial Measurement of Insurance Contracts
4.4. Estimated Future Cash Flows
4.5. Discount Rates Used
4.6. Risk Adjustment for Non-Financial Risk
4.7. Contractual Service Margin
4.8. Subsequent Measurement of Insurance Contracts
4.9. Modification of Insurance Contracts
4.10. Derecognition of Insurance Contracts
4.11. Accounting Policy Changes
4.12. Presentation of Insurance Contract Information
4.13. Disclosures

5. Employee Benefits
5.1. Short-term employee benefits
5.1.1. Recognition and measurement
5.1.2. Disclosure
5.2. Termination benefits
5.2.1. Recognition and measurement
5.2.2. Disclosure
5.3. Post-employment benefits
Distinction between defined contribution plans and
defined benefit plans
11,12 6. Asset Valuation for Financial Reporting
6.1. Basics of valuation
6.2. Overview of International Valuation
Standards (IVS)
6.3. Valuation approaches
6.3.1. Market approach
6.3.2. Income approach
6.3.3. Cost approach
6.4. Valuation report
Teaching & Learning The teaching and learning methodology include lecturing, discussions, problem
Methods/strategy solving, and analysis. Take-home assignment will be given at the end of each
chapter for submission within a week. Solution to the assignments will be given
once assignments are collected. Cases with local relevance will also be given
for each chapter for group of students to present in a class room. The full and
active participation of students is highly encouraged.

Assessment/Evalua
tion The evaluation scheme will be as follows:

Test Test Test Case Analysis Assign Final Total

1 2 3 ment 1
10% 10% 10% 10% 10% 50% 100%
Ch. 1 Ch. Ch. 4 Ch. 5-7 Ch. 1-4 All Ch.
 3

Work load in hours Total ECT

Hours Required
Hrs S
Asses Adv
sment Tutor Self- Assig isin
Lectures Lab s ials Studies nment g
64  - 22 12 64  - -  162 6
Roles of the He/she will come to the class regularly on time and deliver the lecture in a
Instructor well-organized manner. Besides, at the end of each class he/she gives reading
assignment for the next class. He/she will make sure that proper assessments is
given. He/she is also responsible to give feedback for each assessment.
Roles of the students The success of this course depends on the students’ individual and collective
contribution to the class discussions. Students are expected to participate
voluntarily, or will be called upon, to contribute to set exercises and problems.
Students are also expected to read the assigned readings and prepare the cases
before each class so that they could contribute effectively to class discussions.
Students must attempt assignments by their own. Proficiency in this course comes
from individual knowledge and understanding. Copying the works of others is
considered as serious offence and leads to disciplinary actions.
Text and reference Text Book:
books Kieso, Weygandt and Warfield, Intermediate Accounting, IFRS Edition (3rd
Ed. John Wiley & Sons, Inc. 2014).

Reference Books
Kieso, Weygandt and Warfield, Intermediate Accounting, (15th Ed. John Wiley
& Sons, Inc. 2013).
Intermediate Accounting (IFRS Edition). Authors: Spiceland J., Sepe J., Nelson
M., Tan P., Low B., and Low, K.Y. Publisher: McGraw-Hill.
Nikolai, Bazley and Jones, Intermediate Accounting, (10th Ed. McGraw- Hill co.
2007).
http://www.ifrs.org/IFRSs/IFRs.html

Department Accounting & Finance

Program BA Degree in Accounting & Finance
Course Number
Course Title Advanced Financial Accounting II
ETCTS Credits 6
Contact Hours 4
 The course specifically deals with the accounting concepts and practices pertaining
to investments in joint arrangements, home office-branch operations, business

Course combinations, consolidated financial statements, foreign currency transactions and

Description translation of foreign currency financial statements, segment and interim reporting.

Course This course builds on the knowledge you obtained in your introductory and
Objectives intermediate financial accounting courses. The primary objective of the course is to
help students gain an in-depth understanding of the theory and current practice of
advanced and complex financial accounting issues for business firms. Upon
successful completion of this course, students will be able to:
 Identify the alternative forms of a joint
venture and describe the accounting treatment for investments in joint
arrangements;
 Apply proper accounting techniques to
account for branch operations and prepare combined financial statements for
home office and branch;
 Explain the nature of business combinations
and its accounting treatment;
 Explain the meaning and assessment of
control;
 Prepare consolidated financial statements
for companies with parent-subsidiary relationship on date of acquisition and
subsequent to date of acquisition;
 Explain and account for foreign currency
transactions and translate foreign currency financial statements; and
 Prepare segment and interim financial
reports.

Weeks Course Contents

1. Joint Arrangements
1.1. Meaning and types of joint arrangements
1.2. Accounting for investments in joint ventures
1.3. Accounting for joint operations
1.4. Accounting for joint ventures
1.5. Disclosure requirements

2. Accounting for Public Enterprises in Ethiopia

2.1. Overview of Proc. No. 25/1992 and other related
Provisions
2.2. Accounting for Formation and Operation
2.3. Privatization of Public Enterprises

3. Accounting for Sales Agencies and Branch Operations

3.1. Characteristics and Principles
3.2. Distinction between Agencies and Branches
3.3. Accounting Systems and the Accounting Entity
3.4. Accounting for Sales Agencies
3.5. Accounting for Branch Operations
3.5.1. Reciprocal (Intracompany) Accounts
3.5.2. Merchandise Shipments to Branches
3.5.3. Allocation of Expenses incurred by Home Office to
Branches
3.5.4. Accounting for Branch Fixed Assets
3.5.5. Combined Financial Statements for Home Office
and Branch
3.5.6. Reconciliation of Home Office and Branch
Accounts
3.5.7. Transactions among Branches
3.5.8. Disposal of a Branch

4. Business Combinations
4.1. Definitions and Motives
4.2. Methods of arranging Business Combinations
4.3. The Acquisition Method
4.3.1. Identifying the acquirer
4.3.2. Determining the acquisition date
4.3.3. Recognition and measurement of the identifiable
net assets of the Acquiree
4.3.4. Recognition and measurement of goodwill or a
gain from a bargain purchase
4.4. Disclosure requirements
4.5. Overview of business combinations in Ethiopian context

5. Consolidation on Date of Acquisition

5.1. Definition of subsidiary and control
 5.2. Assessing control
5.3. Accounting Requirements
5.4. Definition and presentation of non-controlling interests
5.5. Different reporting dates and accounting policies
5.6. Loss of Control
5.7. Consolidated Statement of Financial Position: Wholly
owned subsidiary
5.8. Consolidated Statement of Financial Position: Partially
owned subsidiary
5.9. Disclosure Requirements

6. Consolidation Subsequent to Acquisition

6.1. Accounting for investments in subsidiaries
6.2. Consolidated financial statements for wholly owned
subsidiary
6.3. Consolidated financial statements for partially owned
subsidiary
6.4. Consolidated financial statements: Intra-group trading
(Upstream and Downstream Transactions)
6.5. Disclosure requirements

7. The Effects of Changes in Foreign Exchange Rates

7.1. Definition of terms
7.2. Exchange Rates and Meaning of Translation
7.3. Types of currency-related exposures
7.4. Determination of functional currency
7.5. Accounting for foreign currency transactions
7.5.1. Recognition and reporting of exchange differences
7.6. Translation of foreign operations
7.6.1. Rationale/Objectives of translation
7.6.2. Translation methods & criteria for applications
7.7. Disclosure requirements

8. Segment and Interim Financial Reporting

8.1. Segment Reporting
8.1.1. Definition of an operating segment
8.1.2. Identifying externally reportable segments
8.1.3. Aggregation criteria
8.1.4. Quantitative thresholds
8.1.5. Disclosure
8.1.6. Measurement
 8.1.7. Entity-wide disclosures
8.2. Interim Reporting
8.2.1. Definitions
8.2.2. Content of an Interim Financial Report
8.2.3. Disclosure in Annual Financial Statements
8.2.4. Recognition and Measurement
8.2.5. Restatement of Previously Reported Interim
Periods

Assessment/Eval The evaluation scheme will be as follows:

uation Component Weight coverage
Test 1 15% Chapters 1-3
Test 2 15% Chapters 4-6
Assignment 1 5% Chapters 1-4
Assignment 2 5% Chapters 5-8
Quiz 1 5%
Quiz 2 5%
Final Exam 50% All chapters
Work Load in
Hours
Total ECT
Hours Required
Hrs S
Asses Adv
sment Tutor Self- Assig isin
Lectures Lab s ials Studies nment g
Text and Text Book:
64  - 22 12 64  - -  162 6
Reference Books Herauf D. & Hilton M. (2016). Modern Advanced Accounting in Canada. Eighth ed.
McGraw-Hill Canada.
Baker, R. E., Lembke, V. C., King, T. E., Jeffrey, C. G., & Christensen, T.
(2016). Advanced Financial Accounting. Eleventh edition. McGraw-Hill/Irwin.
Reference Books:
Cotter, D. (2012). Advanced Financial Reporting: A complete guide to IFRS.
Financial Times/Prentice Hall.
Beechy, T. H., & Farrell, E. (2015). Advanced Financial Accounting. Seventh
edition. Prentice Hall.
Hoyle, J. B., Schaefer, T. F., & Doupnik, T. S. & Wang, X. (2016). 13th edition.
Advanced Accounting. McGraw-Hill Education.
Ernst & Young LLP, International GAAP, John Wiley & Sons Ltd. (Latest edition).
Richard E.Baker et al. Advanced Accounting. 7th Edition, FT Prentice Hall-
 Financial Times, United Kingdom, 2004
Larsen, J. Modern Advanced Accounting. 11th edition. McGraw-Hill.
Commercial Code of Ethiopia
Public Enterprises Proclamation No. 25/1992
IFRS Blue Book (Latest edition)
IFRS Green Book (Latest edition)
IFRS Red Book (Latest edition)