AIT707 - Advanced Financial Accounting

Outline info
Semester
School
Last revision date 2016-02-01 00:31:23.843
Last review date 2016-03-21 00:15:06.627


Subject Title
Advanced Financial Accounting

Subject Description
This advanced financial accounting subject provides an in-depth study of six major areas of advanced financial accounting. These are: standard setting in Canada and internationally, financial instruments, income tax allocation, long-term intercorporate investments, consolidation, foreign currency translation and consolidation of foreign subsidiaries, and not-for-profit and public sector accounting.

Credit Status
This subject is a required subject credit in the Accounting and Information Technology Program. To qualify for the exemption from the CGA Financial Accounting 4 (FA4) subject, students must achieve at least a "C+" in the subject.

Learning Outcomes
Upon successful completion of this subject the student will be able to:

Canadian and International Accounting Environment

1. Research the Canadian and international accounting environments and the latest developments in Canadian accounting environment.
2. Document and explain the major differences between Canadian and International GAAP.
3. Critically evaluate the appropriateness of GAAP and financial statement concepts in specific situations.
4. Prepare financial statements by applying GAAP and financial statement concepts.
5. Evaluate and advise on the appropriateness of differential reporting standards for given circumstances and prepare financial statements by applying differential reporting standards.

Financial Instruments

1. Formulate, analyze and process transactions relating to financial instruments, including the initial recognition, reclassification and subsequent measurement and de-recognition.
2. Prepare financial statements which correctly disclose financial instrument transactions.

Accounting for Income Tax

1. Formulate, analyze and process transactions relating to income tax.
2. Prepare financial statements which correctly disclose income tax transactions and obligations.

Business Combinations and Inter-corporate Investments

1. Evaluate different inter-corporate investments and advise on the appropriate accounting treatment for investments that constitute temporary investments, investments held-for-trade, investments available-for-sale, significant influence and control.
2. Formulate, analyze and process different inter-corporate investments, using both the equity and cost methods as appropriate.
3. Calculate goodwill and allocate the purchase discrepancy stemming from business combinations.
4. Prepare consolidated financial statements for both 100% owned subsidiaries and less than 100% ownership, utilizing both the working paper and the direct approaches.
5. Prepare consolidated financial statements for both 100% owned subsidiaries and less than 100% ownership, applying both the cost and equity methods.

Consolidation Subsequent to Acquisition

1. Advise on the appropriate accounting treatment for goodwill and other intangible assets during consolidation.
2. Account for the purchase discrepancy more than one year after acquisition.
3. Prepare consolidated financial statements one year after acquisition.
4. Prepare consolidated financial statements in subsequent years.

Intercompany Transactions

1. Process inter-company receivable and payable transactions.
2. Formulate, analyze and process inter-company revenue and expense transactions, both "upstream" and "downstream".
3. Formulate, analyze and process inter-company inventory transactions.
4. Account for realized and unrealized inter-company profit on inventory sales.
5. Formulate, analyze and process inter-company land transactions
6. Formulate, analyze and process inter-company amortizable capital asset transactions.
7. Account for realized and unrealized inter-company profit on on sale of land and amortizable capital assets.
8. Convert cost recording to equity recording.
9. Prepare consolidated financial statements where unrealized inter-company profits are involved.

Preferred Shares

1. Calculate non-controlling interest when the subsidiary has preferred shares in its capital structure.
2. Prepare consolidated financial statements where the subsidiary has preferred shares in its capital structure.

Issues in Ownership

1. Formulate, analyze and process transactions which constitute increase in ownership.
2. Evaluate the impact of, and advise on the appropriate accounting treatment, of step purchases on parent's investment account.
3. Formulate, analyze and process share purchase transactions that lead to a change in level of ownership.
4. Evaluate the impact of, and advise on the appropriate accounting treatment, of sale of shares by the parent that leads to decrease in ownership interest.
5. Account for subsidiary share issues in which the parent is not participating.
6. Evaluate the impact of, and advise on the appropriate accounting treatment where the subsidiary has preferred shares.
7. Formulate, analyze and process transactions where the parent has indirect shareholding and prepare appropriate consolidated financial statements.
Joint Ventures

1. Research, evaluate and advise on the appropriate accounting treatment for joint venture transactions.
2. Formulate, analyze and process inter-company transactions between joint venturers.
3. Account for joint ventures formed through non-cash asset combinations.
4. Prepare financial statements for joint venture projects.

Foreign Currency Translation

1. Research, evaluate and advise on the appropriate accounting treatment for foreign currency transactions.
2. Formulate, analyze and process foreign currency transactions for monetary and non-monetary transactions.
3. Formulate, analyze and process fair-value hedge transactions.
4. Formulate, analyze and process cash-flow hedge transactions.

Translation and Consolidation of Foreign Subsidiaries.

1. Distinguish between integrated versus self-sustained foreign operations and advise on the appropriate accounting treatment in each case.
2. Translate and consolidate foreign operations.
3. Translate and consolidate foreign operations where purchase discrepancy is involved.
4. Evaluate the impact of, and advise on the appropriate accounting treatment, of hedging a net investment in a self-sustained foreign subsidiary.
5. Research, evaluate and advise on the appropriate accounting treatment of foreign currency translations and consolidation.
6. Prepare financial statements appropriate for integrated and self-sustained foreign subsidiaries.

Segment Disclosure

1. Apply the quantitative thresholds to determine reportable segments.
2. Interpret and advise on the organization's reporting obligations as far as segment reporting is concerned.

Financial Reporting for Not-for-Profit and Public Sectors

1. Research, evaluate and advise on not-for-profit accounting and reporting issues.
2. Formulate, analyze and process accounting transactions using the deferral method
3. Formulate, analyze and process accounting transactions using the restricted fund method.
4. Research, evaluate and advise on GAAP issues for public sector organizations
5. Research, evaluate and advise on financial reporting for government.
6. Apply budgetary control and encumbrance accounting methods in a not-for-profit environment.
7. Research and discuss ethical considerations for not-for-profit organizations

Cheating and Plagiarism
Each student should be aware of the College's policy regarding Cheating and Plagiarism. Seneca's Academic Policy will be strictly enforced.

To support academic honesty at Seneca College, all work submitted by students may be reviewed for authenticity and originality, utilizing software tools and third party services. Please visit the Academic Honesty site on http://library.senecacollege.ca for further information regarding cheating and plagiarism policies and procedures.

Discrimination/Harassment
All students and employees have the right to study and work in an environment that is free from discrimination and/or harassment. Language or activities that defeat this objective violate the College Policy on Discrimination/Harassment and shall not be tolerated. Information and assistance are available from the Student Conduct Office at student.conduct@senecacollege.ca.

Accommodation for Students with Disabilities
The College will provide reasonable accommodation to students with disabilities in order to promote academic success. If you require accommodation, contact the Counselling and Disabilities Services Office at ext. 22900 to initiate the process for documenting, assessing and implementing your individual accommodation needs.

Prerequisite(s)
Students must meet the Program Eligibility Requirements as stated on the program web page: https://www2.senecacollege.ca/ce/business/accounting/accounting-information-technology.html#EntryRequirements

Topic Outline
International Accounting
Investments in Equity Securities and Business Combinations
Consolidated Statements - Acquisition
Consolidated Statements – Subsequent to Acquisition       
Intercompany Transactions
Intercompany Profits and Bondholdings         
Cash Flows and Ownership    
Other Consolidation Issues          
Foreign Currency Transactions
Foreign Operations         
Accounting for Not for Profit Organizations                   
Review For Final Exam

Mode of Instruction
In-Class
A combination of teaching methods will be utilized which may include lectures, case studies, discussions, group and individual work.

Prescribed Texts
Title: Modern Advanced Accounting in Canada
Edition: 7 E
Author(s): Murray W. Hilton, Darrell Herauf 
Publisher: McGraw-Hill Ryerson.
ISBN: 978-1-25-906648-1 (With Connect).

FA4 CD - CGA Canada 2012

Reference Material
None.

Required Supplies
None.

Promotion Policy

Grading Policy
A+ 90%  to  100%
A 80%  to  89%
B+ 75%  to  79%
B 70%  to  74%
C+ 65%  to  69%
C 60%  to  64%
D+ 55%  to  59%
D 50%  to  54%
F 0%    to  49% (Not a Pass)
OR
EXC Excellent
SAT Satisfactory
UNSAT Unsatisfactory

For further information, see a copy of the Academic Policy, available online (http://www.senecacollege.ca/academic-policy) or at Seneca's Registrar's Offices.


Modes of Evaluation
Assignments are due on the dates specified. Should extenuating circumstances arise, please contact your instructor immediately, prior to when your assignment is due, so an appropriate course of action can be established. Late assignments may be subject to a penalty of up to 10% per week and will not generally be accepted beyond two weeks after the assignment due date.

In cases of cheating or plagiarism, the College Academic Policy will prevail.  Please ensure that all assignments and reports are properly documented.

Students are referred to the following web site for the Seneca College Library MLA Style Guides, Academic Honesty Policy and Copyright guidelines:  

http:/senecacollege.ca/library

Dates for evaluations are specified in the weekly schedule addendum to this outline. The evaluation process may include, but is not limited to, tests, exams, assignments or presentations. Any absences or missed submissions due to medical or other reasons must be supported by medical or other appropriate documentation within one (1) week of the due date. The faculty and program area must be notified immediately in the even of a missed evaluation. Upon acceptance of the documentation, the weighting of the missed deliverable will normally be applied to the final exam.

English Competency:

The ability to communicate effectively is essential for success in business. Therefore, you must demonstrate English competency in this course in both oral and written work. Ensure your written work includes correct sentence structure, spelling and punctuation. Always spell check, edit and proofread your work.

Grading is based on the following marking scheme:

Quiz #1 5%
Mid-Term Test 45%
Quiz #2 5%
Final Examination 45%






Please retain this course outline document for future educational and/or employment use. 

Program Coordinator
Keith Chapin

Approved by: Jeff McCarthy