Mary the Queen College (Pampanga), Inc.

JASA, San Matias, Guagua, Pampanga

Course Title : Accounting for Business Combinations

Course Code : BCACC

No. of Units : 3 units

Course Description : This course deals with business combination, consolidation and hedging instrument likely to be encountered by accountants. The study of the various topics in
this course is based on the amendments of PFRS 3 regarding confident consideration that is not within the scope of PFRS 9/PAS 39, the amendments to PAS 27 regarding the use of
equity method in the Separate Financial Statements, and the effect of PFRS 9 on hedging activities. This course covers the study of the principles and application of accounting
techniques or methodology in solving business combinations & consolidations. It also exposes the students to the different transactions denominated in a foreign currency, in order to
develop the skills of analyzing the nature and uses of derivative instruments as well as the concept in hedging a foreign currency exchange rate risk.

Learning Outcomes

At the end of the course, the students should be able to:

Cognitive
1. Effectively communicate orally and in writing using English and Filipino;
2. Articulate broad coherent knowledge in their field of specialization;
3. Demonstrate competencies required in their specific field of practice;
4. Participate in the generation of new knowledge or in research and development projects;
5. Apply lifelong learning skills in facing new challenges;
6. Work effectively either independently or collaboratively in multi-disciplinary and multi-cultural teams;
7. Manifest awareness of Filipino and Capampangan historical and cultural heritage.

Psychomotor
1. Manifest a living relationship with God through personal prayer, reception of sacraments and devotion to Mary;
2. Live out and practice the teachings of the church in matters of faith and morals;
3. Observe honesty, fairness and justice in all of one’s undertakings;
4. Assume responsibility and accountability for one’s actions and decisions;
5. Demonstrate willingness to work beyond what is expected by sharing gladly and generously one’s time, talent and treasure;
6. Prioritize others over personal needs despite some personal inconvenience
7. Observe professional ethics.
Affective
1. Share in the life and mission of the church;
2. Practice corporal works of mercy;
3. Utilize one’s expertise and talent for the common good;
4. Demonstrate in one’s life a preferential option for the poor;
5. Serve as an agent of social transformation;
6. Participate actively in the discussion and peaceful resolution of national or local issues;
7. Advocate and exercise environmental stewardship;
8. Exercise responsible citizenship through law-abidance, vigilance and patriotism.

Number of Hours: 54 hours

Course Outline and Timeframe

Week Topics
1 Home Office and Branch Accounting
2 Introduction to Business Combinations
3 Business Combination Legal and Accounting Procedures and Quiz
4 Consolidation Concepts and Procedures
5 Consolidation at Acquisition Date
6 Quiz & Prelim Exam
7 Consolidation at Subsequent Date Part 1
8 Consolidation at Subsequent Date Part 2
9 Quiz and Separate Financial Statements
10 Intercompany Transactions part 1
11 Intercompany Transactions part 2
12 Quiz & Midterm Exam
13 Foreign Currency Concepts
14 Foreign Currency Transactions and Translation
15 Quiz and Derivatives
16 Derivatives
17 Hedging
18 Quiz & Final Exam
ACCOUNTING FOR BUSINESS COMBINATIONS
Learning Plan

Learning Outcome Topic Synchronous Asynchronous Resources Assessment LMS/Platform

Activities/Presenta Activities/Presentati
tions ons
Students should be Discussion Lecture 1. Millan, Z.V. Recitation  Neo LMS
able to 1 Home Office and Branch (2020). Accounting  Google
1 Home Office and Accounting for Business Seatwork Classroom
Branch Accounting 1.1 Transactions on the Student-led Combinations.  Google Meet
1.1 Reconcile books of home office discovery Baguio City, Assignment  Zoom
Experiential
differences and branch Philippines:  Facebook
between the 1.2 Reconciliation of
Learning Bandoline Activity Groupchat
reciprocal reciprocal accounts Enterprise
accounts 1.3 Preparation of financial 2. Dayag, A.J. (2021).
1.2 Prepare individual statements and Advanced Quizzes
and combined accounting for special Accounting Vol. 2.
financial transactions Manila,
statements Philippines: Lajara
1.3 Account for Publishing House
special procedures
in home office and
branch accounting
and special
transactions in
agency
transactions

2.1 Compare and

contrast merger and 2 Business combinations-
stock acquisition under statutory merger and
PFRS 3. statutory consolidation
2.2 Discuss the reason 2.1 Reasons for business
for business combination
combination as 2.2 Types of business
defined by business combinations
organizations. 2.3 Methods/ legal forms of
2.3 Identify the types effecting business
of business combination
combination under 2.4 Acquisition of Assets
 PFRS 3 2.5 Statutory merger/
2.4 Compute the statutory consolidation
goodwill/ bargain 2.6 Accounting concepts of
purchase gain as business combination
of the acquisition 2.7 Goodwill/ Bargain
date under PFRS 3 purchase gain
paragraph 32. 2.8 Application of the
2.5 Prepare the acquisition method to a
financial combination in which no
statements of the consideration is
acquirer company transferred
after the merger in
conformity with
PFRS 3. `
3. Separate and consolidated
3.1 Differentiate financial statements- Date of
purchase of net acquisition
assets and 3.1 Purchase of net assets
purchase of equity vs. purchase of equity
under PFRS 3. 3.2 Recording investments
3.2 Determine the cost at cost (Parents Book)
of investment 3.3 Consolidated balance
using the stock sheet at the date of
acquisition method acquisition: Wholly-owned
of effecting and Partially-owned
business subsidiaries
combination 3.4 Subsidiary has recorded
3.3 Prepare goodwill and dividends at
consolidated acquisition date
balance sheet at 3.5 Nature and presentation
the date of of the non-controlling
acquisition for interest
wholly-owned and
partially-owned
subsidiaries under
PFRS 10. 4.Separate and consolidated
3.4 Compute the financial statements-
goodwill to be Subsequent to date of
recognized using acquisition
full-goodwill and 4.1Consolidated Financial
partial goodwill Statements subsequent to
 approaches. date of acquisition
3.5 Determine the 4.2 Separate financial
nature and statements
presentation of 4.3 Consolidated financial
NCI using fair statements – Cost/ Equity
value option 1 and model
2. 4.4 Dividend Income
4.5Consolidated Net
4.1 Prepare the Income
separate and 4.6 Consolidated Retained
consolidated earnings
financial 4.7 Non-controlling interest:
statements of the Partial and Full goodwill
parent company method
subsequent to date
of acquisition
under PFRS 10.
4.2 Compute the
dividend income
to be recognized
from a subsidiary
under PFRS 3
paragraph 38A.
4.3 Determine the
consolidated net
income and
retained earnings
under the entity
theory.
4.4 Compute the NCI
using the partial
and full goodwill
method.

PRELIM
EXAMINATION

5.1 Identify the 5. Elimination of unrealized Discussion Lecture Millan, Z.V. (2020). Recitation
objective of profit intercompany sales of Accounting for
eliminating the effects inventory Business Seatwork
of unrealized 5.1 Effects of intercompany Student-led Combinations. Baguio
intercompany sales of sales of merchandise in the Experiential discovery City, Philippines: Assignment
merchandise in the determination of Learning Bandoline Enterprise
consolidated balances consolidated balances Activity
of sales, cost of sales 5.2 Downstream sales: Dayag, A.J. (2021).
and inventory. Determination of Advanced Accounting Quizzes
5.2 Identify the effects consolidated sales, cost of Vol. 2. Manila,
of intercompany sales sales and inventory balances Philippines: Lajara
of merchandise in the –Cost Method Publishing House
determination of 5.3 Upstream sales:
consolidated balances. Determination of
5.3 Prepare the consolidated sales, cost of
necessary entries in sales and inventory balances
eliminating –Cost Method
downstream 5.4 Determination of amount
intercompany of Intercompany profit
inventory, unrealized
profit in ending
inventory using the
cost model. .
5.4 Prepare the
necessary entries in
eliminating upstream
intercompany
inventory, unrealized
profit in ending
inventory using the
cost model. 6. Elimination of unrealized
5.5 Compute the gains or losses on
amount of intercompany sales of
intercompany profit property and equipment
under 100% (total) and 6.1 Intercompany Sales of
partial elimination. depreciable property
6.2 Downstream sales:
6.1 Prepare the Effects on intercompany
eliminating entries of sale of depreciable property
unrealized gains or on determination of
losses on consolidated balances
intercompany sales of 6.3 Upstream sales: Effects
PPE under PFRS 3. on intercompany sale of
6.2 Determine the depreciable property on
effects on determination of
intercompany sale of consolidated balances
depreciable property in 6.4 Consolidated Net
the determination of Income and Retained
consolidated balances Earnings
under downstream and 6.6 Disposal of Property &
upstream sales. Equipment by Purchasing
6.3 Compute the affiliate – cost and equity
consolidated income method
and retained earnings
using the full goodwill
and partial goodwill
approach.
6.4 Compute revenue
to be recognized over
time under percentage
of completion and cost
recovery method under
PRFS 15.
6.5Determine the
effects of disposal of
property and 7.Foreign Currency
equipment by Transactions
purchasing affiliate 7.1.Exchange rates – Means
using the cost model of Translation
approach. 7.2 Types of Foreign
Exchange Rate Exposure
7.1. Discuss the 7.3 Import/ Borrowing;
meaning of Foreign Export/ Lending
Currency Transaction 7.4Treatment of Transaction
under PAS 21 Gains and Losses
paragraphs 20-26.
7.2 Explain the
meaning of exchange
rates – means of
translation under PAS
21 Revised. 8. Foreign Currency
7.3 Identify the types Translation
of foreign exchange 8.1 Translation of Financial
rate exposure in Statements of Foreign
conformity with PAS Operations
21. 8.2 Presentation Currency
7.4 Analyze the versus
treatment of Functional Currency
transaction gains and 8.3 Hyperinflationary
losses at balance sheet Economy
date and on the date of 8.4 An Analysis of Foreign
settlement. Currency Translation
Reserve Statement of
8.1. Discuss the Comprehensive Income
requirements in and Statement of
translating financial Shareholders’ Equity
statements of foreign
operations under PAS 8.5 An Analysis of
21. theTranslation/
8.2 Distinguish Remeasurement Gain or
presentation currency Loss
and functional 8.6 Goodwill arising from
currency as stated the Acquisition of
under PAS 21. Foreign Subsidiaries
8.3 Enumerate the 8.7 Foreign Operations in a
indicators of Hyperinflationary
hyperinflationary Environment
economy as stated by
PAS 29.

8.4 Analyze foreign

currency translation
reserve statement of
comprehensive income
and statement of
shareholders’ equity
using remeasurement
or temporal method.
8.5 Compute the
goodwill arising from
the acquisition of
foreign subsidiaries.
8.6 Restate the
financial statements of
foreign operations in a
hyperinflationary
environment using
functional currency
method.

MIDTERM
EXAMINATION
9. Hedging Foreign Discussion Lecture Millan, Z.V. (2020). Recitation  Neo LMS
9.1 Discuss the Currency Exchange Rate Accounting for  Google
meaning of derivatives Risk Business Seatwork Classroom
instruments in 9.1 Derivative Instruments Student-led Combinations. Baguio  Google Meet
accordance with PAS 9.2 Four Cornerstone discovery City, Philippines: Assignment  Zoom
Experiential
39. Decision Bandoline Enterprise  Facebook
Learning
9.2 Identify the four 9.3 Hedge Instrument Activity Groupchat
cornerstone decisions 9.4The conditions for Dayag, A.J. (2021).
of PAS 39. Hedge Accounting Advanced Accounting Case Study
9.2 Explain hedging 9.5 Accounting for a Cash Vol. 2. Manila,
instrument in Flow Hedge Philippines: Lajara Quizzes
conformity with 9.6 Foreign Currency Publishing House
paragraph 9 of PAS Forward Contracts
39. 9.7 Futures, Swaps and
9.3 Enumerate the Options
conditions for hedge
accounting under 9. 8Hedge of Net Investment
paragraph 99 of PAS in Foreign Operations
39.
9.4 Determine the
procedures for
accounting for a cash
flow hedge in PAS 39
paragraphs 95-100.
9.5 Discuss the 2
approaches of
accounting for
recording forward
contracts.
9.6 Prepare the journal
entries in accounting
 for swaps, options and
future contracts
9.7 Prepare the journal
entries in hedge of net
investment in a foreign
operations in
conformity with PAS
39.

FINAL
EXAMINATION

Course Requirements :
 Students are expected to be punctual and attend classes regularly.
 Advance reading of the assigned topics should be done by the students.
 Students are also expected to participate actively in class through the practice drills, recitation and board work.
 They should pass course requirements like assignments, index card summaries and other documents on time.
 In case a student is absent, an excuse letter signed by the parent or guardian should be submitted to the teacher.
 The students shall ensure that the classroom is neat, orderly and conducive for learning.

Grading:

40% Quizzes (6 quizzes)

20 % Seatwork
40 % Major Exam (Prelim, Midterms and Finals)

Consultation Schedule : ______________________________

Day(s): __________________________ Time: __________________________

Prepared by: Approved by:

Robert Carl Angelo Arrojo, CPA William I. Asenci, CPA, MBA (Signed) Dr. Lannie D. Galvan, AFBE
Faculty Dean VPAA

Date: 08/03/2021