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. 5

Course Title: Financial Accounting & Reporting, Part III

Course Credit: Three (3) units

Prerequisite: Financial Accounting & Reporting, Part II

Course Description

This course is the culmination of the Financial Accounting cluster. It deals with the preparation of a
properly classified balance sheet, income statement, statement of changes in equity, and statement of
cash flows, including the required disclosures and notes to the financial statements. It also covers
reconstruction of accounts from incomplete records, change from cash basis to accrual basis of
accounting, correction of errors, accounting changes, discontinued operations, earnings per share,
accounting for changing prices, interim reporting, segment reporting, and other current related items.
The students will also be exposed to the financial statements of specialized industries.

Course Outline:

1. Review of the accounting process

1.1 Nature
1.2 Phases
1.2.1 Recording phase
1.2.2 Summarizing phase
1.3 Adjusting, closing and reversing entries
2. Presentation of general-purpose financial statements
2.1 Nature of general-purpose financial statements
2.2 Over-all considerations in the preparation and presentation of financial statements
2.3 Minimum requirements for the content of financial statements
2.3.1 Balance sheet
2.3.2 Income statement
2.3.3 Statement of changes in owners’ equity
2.3.4 Statement of cash flows
2.3.5 Accounting and explanatory notes
2.4 Principles of disclosure
3. Accounting for results of operations
3.1 Approaches to income measurement
 3.1.1 Economic approach
3.1.2 Transaction approach
3.2 Concepts of capital and capital maintenance
3.2.1 Financial concept
3.2.2 Physical concept
3.3 Comprehensive income
3.4 Bases for recognition of income
3.4.1 Accrual basis
3.4.2 Cash basis
3.4.3 Modified cash basis
3.5 Elements of income statement
3.5.1 Income
3.5.2 Expenses
3.6 Revenue, expenses, gains and losses
3.6.1 Definition
3.6.2 Recognition
3.6.3 Measurement
3.6.4 Disclosure requirements
3.7 Information required to be presented on the face of the income statement in the notes
3.7.1 Revenue
3.7.2 Finance costs
3.7.3 Share of profit or loss of associates and joint ventures accounted for using
the equity method
3.7.4 Tax expense
3.7.5 A single amount comprising the total of the post-tax profit or loss of
discontinued operations and the post-tax gain or loss recognized on the
measurement to fair value less costs to sell or on the disposal of the assets
or disposal group(s) constituting the discontinued operation
3.7.6 Profit or loss
3.7.7 Write-downs of inventories to net realizable value or of property, plant,
and equipment to recoverable amounts, as well as reversals of such write-
downs
3.7.8 Disposals of items of property, plant and equiment
3.7.9 Discontinuing operations
3.7.10 Litigation settlements
3.7.11 Other reversals of provisions
3.8 Discontinued operations
3.8.1 Definition and nature
3.8.2 Accounting treatment
3.8.3 Financial statement presentation and disclosures
4. Balance sheet
4.1 Classifications
 4.1.1 Assets and liabilities (Current, Noncurrent)
4.1.2 Owners’ equity (Contributed capital, Retained earnings, Capital
maintenance adjustments)
4.2 Information required to be presented on the face of the balance sheet or in the notes
5. Statement of cash flows
5.1 Purposes of the statement
5.2 Defining cash and cash equivalents
5.3 Classifications of cash flows (Operating activities, Investing activities, Financing
activities)
5.4 Reporting cash flows from operating activities (Direct method, Indirect method)
5.5 Other disclosure requirements
6. Reconstruction of accounts
6.1 Statements from incomplete records (single-entry system)
6.2 Conversion from cash to accrual basis
7. Interim reporting
7.1 Definition and nature
7.2 Approaches in treatment of interim period [Independent approach (discreet approach),
Dependent approach (integral approach)]
7.3 Minimum components of interim financial reports
7.4 Recognition and measurement of income and expenses reported in the interim financial
statements
8. Segment reporting
8.1 Definition and nature
8.2 Types of segments (Business, Geographical)
8.3 Identification of reportable segments
8.4 Presentation and disclosure requirements
9. Accounting for changing prices and reporting in hyperinflationary economies
9.1 Accounting for changing prices
9.1.1 Review of historical cost and stability of money concepts
9.1.2 Rationale for accounting for changing prices
9.1.3 Monetary vs. nonmonetary items
9.1.4 Constant peso accounting vs. current cost accounting
9.1.5 Preparation of financial statements using constant peso accounting and
current cost accounting
9.2 Reporting in hyperinflationary economies
9.2.1 Characteristics which indicate the existence of hyperinflation
9.2.2 Restatement procedures
9.2.3 Restatement of financial statements (Restating balance sheet, Restating
income statement, Restating components of equity)
9.2.4 Investee reporting in the currency of a hyperinflationary economy
10. The professional activities of accountants: applying IAS and IFRS
10.1 Critically appraising, evaluating proposed changes and promoting changes in
 10.1.1 Accounting theories and principles
10.1.2 Concepts
10.1.3 IFRSs, IASs, Exposure Drafts of IASs and other IASB publications
10.2 Monitoring and evaluating
10.2.1 International issues and case law
10.2.2 Ethical issues

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.
 Padilla, N. (2006). Financial Accounting – Theory of Accounts. Manila: GIC Enterprises.
 Robles, N. and P. M. Empleo. (2005). Intermediate Accounting Volume 2. Mandaluyong City:
Millennium Books, Inc.
 Valencia, E. and G. Roxas. (2004). Financial Accounting. Mandaluyong City: Millennium
Books, Inc.
 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 (PAS), Philippine Financial Reporting Standards (PFRS).