IAF710 - Advanced Financial Accounting

Outline info
Semester
School
Last revision date 2017-11-20 15:25:24.497
Last review date 2017-11-20 15:25:26.029


Subject Title
Advanced Financial Accounting

Subject Description
This advanced financial accounting course 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 Bachelor of Commerce, degree programs.

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 the 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 derecognition.
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 Intercorporate Investments

1. Evaluate different intercorporate 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 intercorporate 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 intercompany receivable and payable transactions.
2. Formulate, analyze and process intercompany revenue and expense transactions, both "upstream" and "downstream".
3. Formulate, analyze and process intercompany inventory transactions.
4. Account for realized and unrealized intercompany profit on inventory sales.
5. Formulate, analyze and process intercompany land transactions
6. Formulate, analyze and process intercompany amortizable capital asset transactions.
7. Account for realized and unrealized intercompany profit on sale of land and amortizable capital assets.
8. Convert cost recording to equity recording.
9. Prepare consolidated financial statements where unrealized intercompany 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, 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 intercompany 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)
IAF510

Topic Outline

TOPIC
Framework for Preparation and Presentation of Financial Statements:
-GAAP
-Professional standards
-General standards of financial statement presentation
- Future Income Taxes
- Differential Reporting
Financial Instruments:
- Comprehensive Income
- Recogniton/Measurement and Disclousre of Financial Instruments
Business Combinations
- Forms of Business Combinations
- Recording and Reporting under the Cost Method vs Equity Methods
Introduction to Consolidation Theories
Alternative Conceptual Approaches
Consolidations:
Acquisiton method of consolidations(Purchase Method)
Intercompany transactions of inventory
Intercompany of Land
Intercompany transactions of fixed assets
Consolidations Continued
Preferred Shares
Changes in Ownership
Interests
Joint Ventures
Segment Reporting
Foreign Currency Transactions
Transactions
Long Term Balances
Hedging
Foreign Statement Translations
Intergrated Foreign Operations
Self sustaining Foreign Operations
Consolidation of Foreign Statements
Financial Reporting for Non Business Organizations
Reporting Objectives
Fund Accounting
Accountingby the Deferral Method
Encumbrance Accounting
Financial Statement
Preparation under both the Deferral Method and Restricted Fund Method

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 with Connect Access Code
EDITION: 8th Ed
AUTHOR: Murray W. Hilton, Darrell Herauf. 
PUBLISHER: McGraw-Hill Ryerson.
ISBN: 9781259257391 (Winter Term 2017)



E-Book
TITLE: Modern Advanced Accounting in Canada 8e
EDITION: with
Connect with Smartbook (365 days)
AUTHOR:
Hilton
PUBLISHER: McGraw Hill
ISBN: 9781259107030

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

Mid-Term Test 35%
Hand in Assignment or Tests 15%
Final Examination 50%


Late Assignments and Tests


Tests


1. Test and exam dates have been pre-arranged and are non-negotiable.
2. Tests or exams missed for any reason, other than illness, will result in a zero grade. In the case of illness, a validated doctor’s certificate must be presented within one week of returning to the college.
3. On any test or exam, up to 10 % of the marks on that test or exam may be deducted for poorly presented work, misspelled words and poor usage of language. 
4. Students must pass the final exam in order to pass the subject.


Assignments

Assignments are due at the beginning of the class on the dates specified. Begin your assignments early in anticipation of unforeseen problems that may arise in your work or personal life. 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.

Assignments will be marked on the basis of an appropriate standard of research, content, organization of material and presentation. Assignments are to be grammatically correct and typewritten or prepared by computer.

Students are expected to demonstrate an appropriate level of effective communication skills in verbal presentations and group work. 
Regular attendance to class is expected. 

For further information on evaluation and academic standing, see a copy of the Academic Policy, available at Seneca's Registrar's Offices.


English Competency

The ability to communicate effectively is essential for success in business. Therefore, you must demonstrate English competency in this subject in both oral and written work. Strive to be clear and concise. Ensure your written work is consistent with the rules of English grammar, especially in sentence structure, spelling, and punctuation. Always spell-check, edit, and proof-read your work. 


Language Across the Curriculum Rubric
 
Clear   Confusing  
Good Detail   Lacks Detail  
Easy to Follow   Difficult to Follow  
Answers Question   Evades Question  

Seneca College Library Resources

Be sure to begin all your research, assignment support and career preparation at the Seneca College libraries website http://library.senecacollege.ca where you will find information about our services and collections including, print and e-books, databases that will lead you to thousands of articles in magazines, newspapers, journals, encyclopedias, carefully selected websites, how-to tutorials, streamed videos and much more.

Accounting & Financial Services Subject Guide

Go to http://seneca.libguides.com/content.php?pid=51134&hs=a for an online customized guide for accounting and financial services students that meets specific program needs – you will find library resources, websites, industry associations and organizations, a business glossary, career sites for accounting and financial services students and more.

Citation

For rules on citing your sources, consult Seneca Libraries' online MLA Citation Guide at http://seneca.libguides.com/mla, or purchase a print copy of the Guide to Research & Citation: MLA Style in the Seneca Bookstore.
 
Ensure that you do not commit plagiarism. Information on academic honesty, including the Academic Honesty and Plagiarism tutorial is available through the library at: http://library.senecacollege.ca/Academic_Honesty/index.html.

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

Program Coordinator
Cynthia Duncan

Approved by: Academic Program Manager - Business Studies Danielle Mercier