Lahore University of Management Sciences

ACCT 320 – Corporate Financial Reporting II

Spring 2020
Instructors Areeb Abduhoo Pasha
Room No. TBC
Office Hours TBC
Email areeb.pasha@lums.edu.pk
Telephone TBC
Secretary/TA TBC
TA Office Hours TBC
Course URL (if any) http://suraj.lums.edu.pk/~pco/

COURSE BASICS
Credit Hours 3
Lecture(s) 1 Duration 75 minutes
Recitation/Lab (per week) On need basis Duration On need basis
Tutorial (per week) 1 every 3 weeks Duration On need basis

COURSE DISTRIBUTION
Core Core
Elective
Open for Student Category
Close for Student Category

COURSE DESCRIPTION

The course builds on your knowledge of accounting theory and techniques as used to record, process, and report financial
information. CFR-I is a pre-requisite for this course as it expands on the complexities within the reporting standards. CFR-I mainly
focused on the Asset and Liability side of the Balance Sheet but CFR-II will dig deep in to Equity and Complexities in the Asset and
Liability side as well.

While some emphasis is placed on analysis, interpretation, and use of accounting data for investing, credit, and management
decisions, the reporting function of accounting to external users (investors and creditors) will be stressed.

Please note that this course is the final piece of the puzzle when it comes to reporting. The financial statements of companies
will be evaluated in class regularly. This will provide the building blocks for the financial reporting issues encountered in daily
professional life and will partially serve the purpose of preparing students for professional exams (Reporting).

COURSE PREREQUISITE(S)

 ACCT 100 Principles of Financial Accounting

ACCT 220 Corporate Financial Reporting I
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COURSE OBJECTIVES & LEARNING OUTCOMES

Upon successful completion of the course, students should be able to:

1. Demonstrate as understanding of the fundamental concepts, mainstream theories, international accounting

standards and practices in financial reporting;
2. Identify financial reporting issues faced by investors in analyzing different companies based on financial
reporting standards; (however, a part of this has already been covered in CFR 1)
3. Apply financial reporting requirements to ascertain financial position and financial performance of companies
of diverse nature.
4. Discuss and debate a variety of topics in emerging areas of accounting and their relevance to business financial
decisions including the ethical and global perspectives;
5. Present and defend their analysis and recommendations effectively, both in oral and written forms. (General
Learning Goal)

UNDERGRADUATE PROGRAM LEARNING GOALS & OBJECTIVES

General Learning Goals & Objectives

Goal 1 –Effective Written and Oral Communication

Objective: Students will demonstrate effective writing and oral communication skills
Goal 2 –Ethical Understanding and Reasoning
Objective: Students will demonstrate that they are able to identify and address ethical issues in an organizational
context.
Goal 3 – Analytical Thinking and Problem-Solving Skills
Objective: Students will demonstrate that they are able to identify key problems and generate viable solutions.
Goal 4 – Application of Information Technology
Objective: Students will demonstrate that they are able to use current technologies in business and management
context.
Goal 5 – Teamwork in Diverse and Multicultural Environments
Objective: Students will demonstrate that they are able to work effectively in diverse environments.
Goal 6 – Understanding Organizational Ecosystems
Objective: Students will demonstrate that they understand Economic, Political, Regulatory, Legal, Technological,
and Social environment of organizations.

Major Specific Learning Goals & Objectives

Goal 7 (a) – Discipline Specific Knowledge and Understanding

Objective: Students will demonstrate knowledge of key business disciplines and how they interact including
application to real world situations (including subject knowledge).
Goal 7 (b) – Understanding the “science” behind the decision-making process (for MGS Majors)
Objective: Students will demonstrate ability to analyze a business problem, design and apply appropriate
decision-support tools, interpret results and make meaningful recommendations to support the decision-maker
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Indicate below how the course learning objectives specifically relate to any program learning goals and objectives.

MAPPING OF OBJECTIVES
PROGRAM LEARNING GOALS
AND OBJECTIVES
Goal 1 –Effective Written and Oral
Communication
COURSE LEARNING OBJECTIVES COURSE ASSESSMENT ITEM
Students get a number of opportunities to CP, Quizzes, Project and Exams
demonstrate their ability to communicate
effectively

Goal 2 –Ethical Understanding and
Reasoning
Goal 3 – Analytical Thinking and
Problem-Solving Skills
Goal 4 – Application of Information
Technology
Goal 5 – Teamwork in Diverse and
Multicultural Environments
Ethical perspectives in some of the case studies CP, Quizzes, Project and Exams
are highlighted
Major Goal: Analytical thinking and problem- CP, Quizzes, Project and Exams
solving skills are essential for success in this
course
Introduction and Use of e-learning software Visiting Faculty Experts
Discussion and debate thereon of diverse topics in CP and Project
classroom will allow this objective to be met.

Goal 6 – Understanding
Organizational Ecosystems
Goal 7 (a) – Discipline Specific
Knowledge and Understanding
(Subject Knowledge)
Goal 7 (b) – Understanding the
“science” behind the decision-
making process
Develop students understanding of the CP, Project and Visiting Faculty
interaction of firm specific variables with the Experts
securities markets, industry, and the economy
Major Goal: Comprehensive coverage of topics in CP, Quizzes, Project and Exams
CFR II
N/A N/A

GRADING BREAKUP AND POLICY

Class Participation: 10%

Quizzes: 20%
Midterm: 30%
Group Project 10%
Final Examination: 30%

Course Instructions:

You will need to score at least 50% to pass this course as per SBSD policy.

You are expected to be punctual and seated before the class starts. A zero-minute policy holds, and late arrival will mean zero class
participation for that session.

Given the size of the class, CP will be taken in Groups, this will be decided by the instructor during the course. Groups will be
finalized by the instructor and Teaching Assistants.

It is important to note that the course structure is integrated and missing a class will have a negative impact on understanding of
concepts and performance.
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As accounting is problem oriented, doing the assigned readings on a timely basis is a necessity. Exam performance is directly related
to systematic preparation, which includes after class practice. This course moves very quickly so it is imperative that you do not fall
behind. Working on practice problems with other students can be useful.

There will be a total of 5 quizzes (1 lowest quiz will be dropped). Your relevant instructor will decide if the quizzes are announced
or unannounced.

Please make sure your cell phones are on silent and out of sight during class.

Based on how the course progresses, there might be minor changes in the chapters / topics covered.

EXAMINATION DETAIL

Yes/No: Yes
Combine/Separate: TBC
Quizzes
Duration: TBC
Preferred Date: TBC
Exam Specifications: TBC

Yes/No: Yes
Combine/Separate: TBC
Midterm
Duration: TBC
Exam
Preferred Date: TBC
Exam Specifications: TBC

Yes/No: Yes
Combine Separate: TBC
Final Exam
Duration: TBC
Exam Specifications: TBC

     
Lectures Chapter: Title /
Topic / IAS or SESSION OBJECTIVES
IFRS
1 Course Outline 1. Introduction to the course and its placement in the program
2. Detailed run through of the course outline
Review of a 3. Introduction to instructor and course structure
Company Balance 4. Introduce the Statement of Changes in Equity as an additional element of the Financials
Sheet 5. Create a link to the topics covered in CFR I and how CFR II will be adding on to these

2 Chapter 17: 1. Revise the accounting framework for financial assets

2. Revise the accounting for debt investments at amortized cost
Investments 3. Revise the accounting for debt investments at fair value
4. Revise the accounting for the fair value option
5. Revise the accounting for equity investments at fair value
6. Revise the equity method of accounting for investments
7. Discuss the accounting for impairments of debt investments
8. Describe the accounting for transfer of investments between categories
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Lectures Chapter: Title /
Topic / IAS or SESSION OBJECTIVES
IFRS

3/4/5 Chapter 14 1. Describe the formal procedures associated with issuing long-term debt
2. Identify various types of bond issues
Non-Current 3. Describe the accounting valuation for bonds at date of issuance
Liabilities 4. Apply the methods of bond discount and premium amortization
5. Explain the accounting for long-term notes payable
6. Describe the accounting for the extinguishment of non-current liabilities
7. Describe the accounting for the fair value option
8. Explain the reporting of off-balance-sheet financing arrangements
9. Indicate how to present and analyse non-current liabilities

6/7 Chapter 17: 1. Explain who uses derivatives and why

2. Understand the basic guidelines for accounting for derivatives
Investments 3. Describe the accounting for derivative financial instruments
4. Explain how to account for a fair value hedge
5. Explain how to account for a cash flow hedge

8 / 9 / 10 Chapter 21 1. Explain the nature, economic substance, and advantages of lease transactions
2. Describe the accounting criteria and procedures for capitalizing leases by the lessee
Accounting for 3. Contrast the operating and capitalization methods of recording leases
Leases 4. Explain the advantages and economics of leasing to lessors and identify the classifications of
leases for the lessor
5. Describe the lessor’s accounting for direct-financing leases
6. Identify special features of lease arrangements that cause unique accounting problems
7. Describe the effect of residual values, guaranteed and unguaranteed, on lease accounting
8. Describe the lessor’s accounting for sales-type leases
9. List the disclosure requirements for leases

11 / 12 Chapter 15 1. Discuss the characteristics of the corporate form of organization

2. Identify the key components of equity
Equity 3. Explain the accounting procedures for issuing shares
4. Describe the accounting for treasury shares
5. Explain the accounting for and reporting of preference shares
6. Describe the policies used in distributing dividends
7. Identify the various forms of dividend distributions
8. Explain the accounting for share dividends and share splits
13/ 14 / Chapter 16 1. Describe the accounting for the issuance, conversion, and retirement of convertible securities
15 2. Explain the accounting for convertible preference shares
Dilutive Securities 3. Contrast the accounting for share warrants and for share warrants issued with other securities
and Earnings per 4. Describe the accounting for share compensation plans
Share 5. Discuss the controversy involving share compensation plans
6. Compute earnings per share in a simple capital structure
7. Compute earnings per share in a complex capital structure

16 MID – TERM MID – TERM Examination

Examination
17 / 18 / Consolidation, 1. Describe the concept of a group as a single economic unit
19 / 20 Associates & Joint 2. Explain and apply the definition of a subsidiary within relevant accounting standards
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Lectures Chapter: Title /
Topic / IAS or SESSION OBJECTIVES
IFRS
Ventures 3. Identify and outline using accounting standards and other applicable regulation the
circumstances in which a group is required to prepare consolidated financial statements
IFRS 3 & IAS 28 4. Describe the circumstances when a group may claim exemption from the preparation of
consolidated financial statements
5. Explain why directors may not wish to consolidate a subsidiary and outline using accounting
standards and other applicable regulation the circumstances where this is permitted
6. Explain the need for using coterminous year ends and uniform accounting polices when
preparing consolidated financial statements
7. Explain why it is necessary to eliminate intragroup transactions
8. Understand the accounting for investment in Joint Ventures
9. Understand the accounting for investment in Associates

21 / 22 Chapter 20 1. Distinguish between accounting for the employer’s pension plan and accounting for the
pension fund
Accounting for 2. Identify types of pension plans and their characteristics
Pensions and Post- 3. Explain measures for valuing the pension obligation
Retirement 4. Identify amounts reported in financial statements
Benefits 5. Use a worksheet for employer’s pension plan entries
6. Explain the accounting for past service costs
7. Explain the accounting for remeasurements
8. Describe the requirements for reporting pension plans in financial statements
9. Explain the accounting for other postretirement benefits.

23 / 24 Chapter 19 1. Identify differences between pretax financial income and taxable income.
2. Describe a temporary difference that results in future taxable amounts.
Accounting for 3. Describe a temporary difference that results in future deductible amounts.
Income Taxes 4. Explain the non-recognition of a deferred tax asset.
5. Describe the presentation of income tax expense in the income statement.
6. Describe various temporary and permanent differences.
7. Explain the effect of various tax rates and tax rate changes on deferred income taxes.
8. Apply accounting procedures for a loss carryback and a loss carryforward.
9. Describe the presentation of income taxes in financial statements.
10. Indicate the basic principles of the asset-liability method.
11. IFRIC 23 – Uncertainty over Income Tax Treatments
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25 / 26 Local Accounting 1. ICAP Code of Ethics
Requirements 2. Financial Reporting Framework in Pakistan
3. Regulation of the Accounting Profession (SECP, ICAP, ICMAP)
https:// 4. Overview of Statutory Framework for Accounting and Auditing (Companies Act 2017)
www.iasplus.com/ 5. Adoption of International Standards
en/jurisdictions/ 6. Extracts from Code of Corporate Governance
asia/pakistan

https://
www.ifac.org/about-
ifac/membership/
country/pakistan

27 / 28 Project Project Presentations

Presentations

FINAL Exam FINAL Exam

TEXTBOOK(S)/SUPPLEMENTARY READINGS

 International Financial Reporting Standards (IFRS)

 “Intermediate Accounting”, Second edition by Kieso, Weygandt & Warfield
 Other readings to be handed out during the semester