Tomas Del Rosario College

Capitol Drive, San Jose, Balanga City, Bataan

Telefax No.: (047)791-6152; Tel. Nos.: (047) 237-3511, 237-0841

BACHELOR OF SCIENCE IN ACCOUNTANCY

(Course Syllabus)

Course: Actg. 4

Course Title: Financial Accounting & Reporting, Part II

Course Credit: Six (6) units

Prerequisite: Financial Accounting & Reporting, Part I

Course Description

This course is a continuation of Financial Accounting & Reporting, Part I, It is designed to cover the
financial accounting principles relative to recognition, measurement, valuation, and financial statement
of presentation of liabilities and shareholders’ equity, including disclosure requirements. The related
internal control, ethical issues, and management of liabilities and owner(s)’ equity are also covered. It
also deals with contemporary issues such as leases, employees’ retirement benefits, deferred taxes, and
other current related items.

Course Outline:

1. Accounting for Liabilities – Current Liabilities

1.1 Definition and composition
1.2 Recognition and measurement of financial/nonfinancial liabilities
1.2.1 Recognition and measurement of financial liabilities whose amount are
definite – trade payables, short-term notes payable, commercial paper,
current portion of long-term debts, accrued expenses
1.2.2 Recognition of current non-financial liabilities – unearned revenues,
customer’s deposits, outstanding gift certificates, liability for warranty,
outstanding premiums, deposits for returnable containers, bonuses,
unearned service contracts, others
1.2.3 Derivatives
1.2.4 Financial statement presentation and disclosures
2. Noncurrent Liabilities
2.1 Definition and Composition
2.2 Recognition and measurement of noncurrent liabilities
2.3 Accounting for bonds payable
2.3.1 Issuance of bonds; accounting for interest and amortization of premium or
discount using straight-line and effective interest methods
2.3.2 Extinguishment of bonds prior to maturity (including conversion bonds
into ordinary shares)
2.3.3 Financial statement presentation and disclosures
 2.4 Accounting for Long-term Notes Payable
2.4.1 Nature of long-term notes payable
2.4.2 Accounting for issuance of notes (Issued for cash; stated rate and market,
Issued for assets or services; stated rate and market rate different,
Installment note issued for noncash consideration, Innovative mortgage
notes, Note with an unrealistic interest rate
2.5 Provisions, Dontingent Liabilities
2.5.1 Definition and nature
2.5.2 Financial statement presentation and disclosures
3. Accounting for Shareholders’ Equity
3.1 Contributed Capital
3.1.1 Share capital – definition and classification (Ordinary shares, Preference
shares – cumulative, noncumulative, participating and non participating)
3.1.2 Authorization, subscription, and issuance of share capital
3.1.3 Subscription defaults
3.1.4 Share issuance costs
3.1.5 Additional paid-in-capital-definition and sources
3.1.6 Right issues, share warrants, and share options
3.1.7 Share appreciation rights
3.1.8 Redemption and conversion of preference shares
3.1.9 Share recapitalization and share splits
3.1.10 Treasury shares
3.1.11 Financial statement presentation and disclosures
3.2 Retained Earnings
3.2.1 Definition
3.2.2 Fundamental errors (Correction of errors in prior period’s income, Change
in accounting policies)
3.2.3 Accounting for appropriations and subsequent reversals
3.2.4 Accounting for dividends – cash, property, share, scrip, liquidating
3.2.5 Financial statement presentation and disclosures
3.3 Other Shareholders’ Equity Items
3.3.1 Revaluation surplus
3.3.2 Unrealized losses on decline in value of available-for-sale securities
3.3.3 Foreign currency translation adjustment
4. Special Topics
4.1 Leases
4.1.1 Nature and classification
4.1.2 Accounting for leases – lessee’s viewpoint: Operating lease, Capital
lease/finance lease
4.1.3 Accounting for leases – lessor’s viewpoint: Operating lease, Direct
Financing lease, Sales-type lease, Sale of assets during lease term
4.1.4 Accounting for sale-leaseback transactions
 4.1.5 Leveraged lease
4.1.6 Disclosure requirements for leases
4.2 Accounting for Employee Benefits
4.2.1 Employee benefits defined
4.2.2 Short-term employee benefits (Recognition and measurement)
4.2.3 Post-employment benefits [Nature of pension plan, Types of pension plan
(Defined contribution pension plans, Defined benefit pension plans),
Accounting for pension plans]
4.2.4 Termination benefits
4.2.5 Equity compensation benefits
4.2.6 Pre-retirement compensation plans
4.2.6.1 Share-based compensation plans (Share award plans, Share
option plans, Share appreciation right, Share purchase plans)
4.3 Share-based Payment

Suggested References
 Alfreson, Keith, L. Ken, R. Picker, P. Pacter, and J. Radford. (2005). Applying International
Accounting Standards. Australia: John Wiley and Sons Australia, Ltd.
 Cabrera, E. B. Financial Accounting and Reporting, Theory and Practice Volume 2, 2007
Edition, Manila: GIC Enterprises
 Baysa, Gloria T., MC. Y. Lupisan, and E. F. Ledesma. (2006). Financial Accounting Theory.
Mandaluyong City: Millennium Books, Inc.
 Robles, N. and P. M. Empleo. (2005). Intermediate Accounting Volume 2 Mandaluyong City:
Millennium Books, Inc.
 Padilla, N. (2005). Financial Accounting – Theory of Accounts. Manila: GIC Enterprises.
 Valix, C. T. and J. Peralta. (2005). Financial Accounting Volume 2 (Based on PAS, PFRS, IAS,
IFRS). Manila: GIC Enterprises
 Weygandt, Kieso, and Warfield (2004). Intermediate Accounting (2004) 11th Ed., Mandaluyong
City: Millennium Books, Inc.
 Compilation of Philippine Accounting Standards (PAS), Philippine Financial Reporting
Standards (PFRS).