ACCTING 3501 - Corporate Accounting III

North Terrace Campus - Semester 1 - 2014

Topics may include issue of shares, debentures, company reconstructions, accounts of liquidators and receivers; amalgamations and takeovers; inter-corporate investments and consolidated accounts; and joint ventures, foreign currency transactions and translation.

  • General Course Information
    Course Details
    Course Code ACCTING 3501
    Course Corporate Accounting III
    Coordinating Unit Adelaide Business School
    Term Semester 1
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Up to 4 hours per week
    Prerequisites ACCTING 2501
    Assumed Knowledge CORPFIN 2500 & ECOMMRCE 1000 - or equivalent
    Course Description Topics may include issue of shares, debentures, company reconstructions, accounts of liquidators and receivers; amalgamations and takeovers; inter-corporate investments and consolidated accounts; and joint ventures, foreign currency transactions and translation.
    Course Staff

    Course Coordinator: Dr Bryan Howieson

    Associate Professor Bryan Howieson
    Location: Room 13.27, Level 13, Building: 10 Pulteney Street
    Telephone: 8313 4760


    Course Website:

    Mr Will Mackay
    Location: Room 13.15   Level 13, Building: 10 Pulteney Street
    Telephone: 8313 8305     

    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.


    10.00 a.m. – 12.00 noon; Horace Lamb Lecture Theatre


    One per week as enrolled.  Attendance at tutorials is compulsory.  Failure to attend the minimum specified number of tutorials will result in you being unable to sit the final examination.

    PLEASE NOTE: Financial Accounting II is a pre-requisite for Corporate Accounting III as this course builds on the material covered in that subject.  If you have not successfully completed Financial Accounting II, you will NOT be permitted to enrol in Corporate Accounting III.

    Context for Course Subject Matter:
    A reporting entity may have status as a legal entity separate from its owners (cf. Corporations and Partnerships).  However, a lot of business activity is undertaken by way of collections or groups of separate legal entities which, to a greater or lesser extent, conduct operations as though they were one entity rather than several.  These inter-entity relationships can potentially span a continuum from a mere investment in some of the equity of another legal entity all the way through to complete control of another entity (with a wide range of mixed levels of association in between).  The different ways in which legal entities can relate to each other create interesting challenges for how those relationships ought to be reported upon in financial statements.  In principle, much depends upon the economic substance of any given relationship – for example, if one entity effectively controls the operating and financing activities of another, then, for financial reporting purposes, financial statements should be prepared for the two entities combined to reflect the fact that although there are two legal entities, they operate together in such a way that there is really only one business or one set of operations.
  • Learning Outcomes
    Course Learning Outcomes

    This course seeks to develop your knowledge and understanding about:

     1.       What are the different types of relationships between entities and how are these relationships defined for accounting purposes?;

    2.       What are the implications of these relationships for what determines a “reporting entity” for the purposes of general purpose financial statements (e.g., what are the implications of so-called ‘Special Purpose Entities’, ‘Variable Interest Entities’, and ‘Securitisation’ arrangements for decision useful financial statements)?;

    3.       How are the different relationships treated from an accounting perspective and what are the relevant accounting techniques?;

    4.       What are the strategic and business model issues associated with business combinations and how should such combinations be accounted for?;

    5.       How should entities that are part of a reporting entity be accounted for if they are domiciled in another country (i.e., how should the financial statements of a foreign entity be translated into the reporting currency of the reporting entity)?;

    6.       Some issues in the analysis of consolidated reporting entities (e.g., segment reporting; related party transactions).


    If you are to progress in your profession beyond being merely a record keeper, then you must develop many competencies including the following:

    A.      a thorough knowledge of those accounting standards and other regulatory pronouncements that address accounting for inter-entity relationships;

    B.      an understanding of the concepts which underlie group accounting practice;

    C.     an ability to apply these concepts and accounting standards to resolving practical problems in accounting for inter-entity relationships;

    D.     an ability to prepare consolidated financial statements;

    E.      skills in problem definition and problem solving;

    F.      an ability to deal with the constant innovation and change found in contemporary
    accounting practice; and

    G.      skills in written and verbal communication, including the presentation and defence of accounting policy choices.
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. A - C
    The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. D, G
    An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems. E - G
    Skills of a high order in interpersonal understanding, teamwork and communication. G
    A proficiency in the appropriate use of contemporary technologies. D
    A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life. B, C, E, F
    A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community. E,F
    An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities. B, E, F
  • Learning Resources
    Required Resources

    Text Books:

    Leo,K., Hoggett, J., and Sweeting, J., Company Accounting, 9th Edition, 2012, J. Wiley and Sons, Australia.  NOTE: this year the textbook is shrinkwrapped with an access key for the WileyPlus on-line learning resources that are associated with the textbook.  WileyPlus will be available to those who wish to use it for additional practice subject to purchasing access.

    2014 Accounting Handbook / Financial Reporting Handbook (either the CPA Australia OR ICAA versions are acceptable.  Note an e-book version is available but cannot be taken into exams).  Please note that there have been major changes to relevant standards and an up-to-date version of the Handbook is required.  You may be permitted to take your handbook into the examinations of this course but the handbook cannot contain any writing, notes, tabs, or any other form of unauthorised assistance.  Underlining and highlighting are permitted.

    2013 Goodman Fielder Limited annual report (this can be downloaded from weblinks on MyUni). Note that the Goodman Fielder Ltd annual report will be used frequently throughout tutorials and your understanding of the contents of that report may also be examinable.


    Additional compulsory readings in the form of short articles or book chapters have been provided on MyUni to either elaborate on, or supplement, items in the textbook.  In some cases, there are no relevant readings in the textbook and you will need to use the readings provided on MyUni.

    A Note on the Role of Reading in This Course:

    Some students feel that reading can be something of a “chore”.  Nevertheless, it is a very important mechanism for your learning because books and articles are an important repository of our knowledge!!  Many of the topics are very complex and so it is impossible to cover all you need to know in lectures alone.  Try to make your reading as productive as possible – for instance, rather than simply highlighting sections of text, take written notes of what you have read because research studies suggest this practice means that you are more likely to retain the information in your memory.  Also, take breaks when reading and try to read only small sections at a time.  This will reduce your level of fatigue and again tend to improve your understanding and memory of the material.   

    Also seek to plan ahead with your reading.  Some weeks may have more reading than others and you will sometimes need to start reading earlier than usual if you are to cover everything.
    Recommended Resources

    Changes in accounting standards and other developments in accounting practice occur very frequently.  Links to several useful websites have been placed on the MyUni site for this course.  You may find it helpful to refer to these regularly to help you keep up with current developments and as a starting point for researching your assignment.


    Online Learning

    Changes in accounting standards and other developments in accounting practice occur very frequently.  Links to several useful websites have been placed on the MyUni site for this course.  You may find it helpful to refer to these regularly to help you keep up with current developments and as a starting point for researching your assignment.


  • Learning & Teaching Activities
    Learning & Teaching Modes

    The course seeks to assist you to understand the accounting for inter-entity investments by way of a number of activities which include:

    ·   A coherent course structure that develops from basic concepts about the nature of different inter-entity relationships to consider in detail the accounting implications of those different levels of relationship.  All topics link together to build up an overall picture of the major financial reporting issues associated with inter-related entities;

    ·   Lectures – these are designed to provide background knowledge that can be used to help address practical accounting problems.  Lectures also provide an opportunity to structure the various components of the course.  You should listen carefully throughout lectures for comments which help you identify the link between one part of the course and another;

    ·   Readings - You should ensure that you READ AS WIDELY AS POSSIBLE so that you are best equipped to discuss and resolve the relevant accounting policy problems associated with inter-entity relationships.  It is not possible to cover in lectures all the information associated with the complex topics we will address.  All readings are potentially examinable;

    ·   Tutorials - These are very important because they allow you to explore issues and material in an interactive small group setting.  This allows for more personal and immediate feedback on your progress as well as being a forum to develop the various competencies.  It is not an overstatement to say that your success in this course is dependent upon being well prepared for, and actively participating in, tutorial discussion; and

    ·   In-lecture quizzes, the assignment and the mid-semester examination - these activities allow you to practice and improve your communication skills and your ability to present and justify arguments and decisions as well as providing you with timely feedback on your understanding of the course material.


    Tutorial classes will be held weekly commencing the week beginning Monday 10th March.  Membership of tutorial classes is per your enrolment.  Students wishing to swap between tutorial classes are required to present their case to Ms Chelsea Liu but should be aware that such a request is unlikely to be approved.  In general, a change will only be permitted where another student is prepared to swap. Changes to your tutorial time will not be permitted after week 3 of the course.  If you attend a tutorial that is not your allocated tutorial, you may be asked by the tutor to leave.  If such a request is not honoured, then the tutor may choose to cancel the tutorial.   These restrictions are necessary to ensure a fair and effective learning environment for all students in the course.  In addition, you will NOT receive your tutorial related marks if you attend a tutorial that is not the one in which you are formally enrolled (even if the alternative tutorial is run by the same tutor).

    Tutorials are an important component of your learning in this course.  The communication skills developed in tutorials by regularly and actively participating in discussions are considered to be most important by the School and are highly regarded by employers and professional bodies.

    At this advanced level of study, you are much more responsible for the quality of your learning than when you first entered university.  Consequently, the emphasis is upon active rather than passive learning.  It is expected that each student will actively involve him/herself in the discussion during each tutorial.  In general, a good participant will, among other things:

    ·    Take the initiative and lead the discussion on a question;

    ·    Be prepared to control the level of their involvement so that other class members can participate equally in the discussion;

    ·    Present their points in a structured manner with reference to relevant accounting standards, readings and research evidence;

    ·    Be prepared to accept and explore alternative viewpoints;

    ·    Be willing to go beyond the suggested readings and resources and use their initiative to present other topical material as examples, e.g., recent newspaper articles;

    ·    Speak clearly;

    ·    Assist other members of the class with understanding the material;

    ·    Be prepared to work cooperatively and productively in small groups;

    ·    Be sensitive to the needs and feelings of other participants; and

    ·    Be punctual.

    It is not reasonable to expect that you will always have the “right” answer and, indeed, it should be recognised and understood that valid alternative points of view might well exist on an issue.  This does not mean that “anything will do” when trying to find a solution to controversial topics – rather a “good” answer will be one that is grounded in, among other things, references to relevant and valid accounting standards and concepts.

    Preparation prior to attending your tutorial is vital to your successful completion of this course and if you have not prepared beforehand you will have significant difficulties in understanding what is going on in the class session.  PLEASE NOTE: Solutions for tutorial activities will NOT be handed out.  It is your responsibility to come prepared and participate in tutorials – how much of the tutorial activities gets covered is up to you.  However, the teaching staff are very happy to spend time assisting you with a question PROVIDED you have made a sincere written attempt beforehand.  If you do not get to cover an activity in a tutorial, you should see any of the tutors in their consultation time for assistance.

    Contact details and consultation times for the various tutors in the course will be placed on MyUni.




    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.


    The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week to their studies.  This means that you are expected to commit approximately 9 hours for a three-unit course for private study outside of your regular classes.

    Students in this course are expected to attend all lectures throughout the semester and are required to attend one tutorial class each week.

    Learning Activities Summary

    Our primary focus will be upon groups of corporate entities in the ‘for-profit’ sector but much of the material is equally relevant to non-incorporated entities and entities in the public and not-for-profit sectors.  Material relating to all of these sectors and types of entities will be addressed and assessable.  This course has a central theme which looks at the accounting associated with different types of inter- entity groups.  In addition to the introduction (Topic 1), the course is divided into three broad sections which explore both the relevant theoretical and practical aspects of this theme.  The first section (Topics 2 and 3) describes the way in which inter-entity relationships might be formed – so-called ‘business combinations’ in which one entity might, for example, purchase all the share equity or, alternatively, the individual assets and liabilities that collectively form a ‘business’ of another entity. This part of the course deals with issues such as how the acquisition should be measured and recorded and the treatment of any goodwill that might arise on the acquisition.  Some information is also provided about how acquisitions are made in practice and relevant legal obligations.  All of this material is extremely important to understanding the topics covered in the second part of the course.

    The second section of the course deals with the various accounting implications that arise once a group of entities is established (Topics 4 – 6).  As each entity might have its own legal status, it will also have its own set of financial statements (even if only for internal management purposes).  However, if the related entities are essentially controlled by another, then this ‘economic entity’ (the group of entities) is also a ‘reporting entity’ for which we prepare a collective set of financial statements; the ‘group’ or ‘consolidated’ financial statements.  Although in principle the consolidated financial statements are basically all the individual financial statements added together, many adjustments are required to prepare the consolidated Statement of Financial Position, Statement of Comprehensive Income, and Statement of Cash Flows.  As the group is effectively treated as though it is one entity, it is necessary to ensure that when the consolidated financial statements are prepared, any transactions between the members of the group are not included – e.g., if one member of the group sells inventory to another member, then the inter-company sale and purchase have to be removed (‘eliminated’) when preparing the consolidated income

    Apart from inter-company transactions we will also be exploring how to account for groups of entities where the entity in control does not fully own all the equity of another controlled entity (the presence of so-called ‘non-controlling interests’ or ‘outside equity interests’) (Topic 7).  In addition, we will explore those investments in other entities where there is either ‘significant influence’ but not control (Topic 8) or where there is ‘joint control’ (i.e., two entities have equal amounts of influence over another) (Topic 9).  The second section of the course will conclude with a study of how to translate the financial statements of overseas entities into the group’s presentation currency (Topic 10).

    The third section of the course (Topic 11) briefly explores some special issues associated with the analysis of group financial statements such as segment reporting and related party transactions.
    Specific Course Requirements
    A summary of topics is provided below.  Please see the Course Information tab on MyUni for more detailed information.

    Topic 1 - Introduction

    Topic 2 - Due Diligence in Business Acquisitions & Takeover and Competion Laws

    Topic 3 - Business Combinations Accounting

    Topic 4 - Consolidation - Introduction

    Topic 5 - Consolidation - Wholly Owned Subsidiaries

    (Note Week 6 has a mid-semester exam which will be held from 1 - 2.30 p.m. on Wednesday 9th April.  There is no lecture that week but tutorials will run as usual).

    Topic 6 (spread across weeks 7 and 8): Consolidation - Intra-Group Transactions

    Topic 7 - Consolidation - Non-Controlling Interest

    Topic 8 - Investments in Associates - Equity Accounting

    Topics 9 and 10 (two topics are covered in this week's lecture) - Accounting for Joint Arrangements & Foreign Currency Translation

    Topic 11 - Analysis of Group Financial Statements - Segment Reporting & Related Party Disclosures.

    Note: the relevant readings and tutorial activities for each topic are provided on separate topic outine handouts provided on the MyUni site for this course.


    As this is a course in advanced accounting, you are expected to have a strong understanding of material covered in prior related courses.  Accounting courses build on one another and so prior accounting studies inevitably are examinable in this course, e.g., accounting for income tax.  As a minimum, you are expected to be already familiar with specific topics covered in chapters 1 -3, 5 – 7, and 9 of the textbook.

  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    A series of assessment tasks are required in this course. There is an assignment, tutorial participation assessment, and two exams. The assignment must be done in teams of three students. The mid-semester exam is designed to give you timely low-cost feedback about your command of the course material.
    Assessment Related Requirements

    Tutorial attendance and participation are compulsory in this course.  Attendance records will be kept and a failure to attend seven (7) or more of the tutorials will result in you being barred from sitting the final examination. 

    In addition, three ten minute in-class tests will be held throughout the semester and are worth 10% of your overall result.  The best two out of these three tests will be used to determine your mark for this component of the assessment.  The timing of the tests will not be announced in advance as you are expected to attend all tutorials and not all tutorials will necessarily have a test in the same week.  To minimise gaming strategies, different tests will be written for different tutorials.  Unless otherwise stated, the tests will be ‘closed book’ and although calculators will be permitted, the calculator function on mobile phones cannot be used and mobile phones must be turned off.  Note that tests can include any course material up to AND including the current week’s tutorial material.

    To satisfy assessment requirements relating to tutorials, students must:
    ·      Be at their usual and registered tutorial class.  Attending another tutorial is not permitted and you will not be allowed to sit a test in a tutorial other than the one in which you are registered; and

    ·      Be present for the duration of the tutorial class.

    NO special consideration will be given except in the case of serious medical or other emergencies where written evidence is provided.  Please note that the common cold and work commitments will NOT be accepted as special circumstances.

    Tutorials will be held in week 6 as usual but as this is the week in which the mid-semester examination has been scheduled, week 6 will not count towards the attendance requirement nor include the possibility of a tutorial test.

    Students MUST attend their tutorial class as registered via Access Adelaide. Students can only change their tutorial class through Access Adelaide for a limited period in the beginning of the semester. Changes can only be made after that time if students find someone with whom to swap their class. However, in such case, both students are required to contact Chelsea Liu and confirm the change in writing.  Please note that tutors DO NOT have the authority to give students permission to change their tutorial class. 


    Assessment Detail
    The detailed requirements of each assessment item will be posted on the MyUni site for this course.

    The assessment components are as follows:

    Assignment                                 20%

    Details: This assignment must be done in teams of three people.  Further details are provided in a separate handout and via the ‘Assignments’ tab on the MyUni site for this course.
    Due date to be advised.

    Mid-Semester Exam (Week 6)       20%

    Details to be provided on a separate notice. This exam will cover topics 1 – 4 only.  The exam will be held in Bonython Hall from 1 - 2.30 p.m. on Wednesday 9th April.

    Tutorial Attendance and Tutorial Tests           10%

    Details: Tutorial attendance and preparation are assessed in this course.  Note there are strict conditions as to tutorial attendance and the conduct of tutorial tests.  Information about these requirements can be found under the Assessments Related Requirements of this page or under the Assessments Tab on the MyUni site for this course.
    Due Date:  Throughout the semester.

    Final Exam                                   50%

    There will be a 3 hour exam.

    Important Note: to gain a pass for this course, a satisfactory result must be obtained on the final examination as well as a total of at least 50% overall. Students not achieving the minimum examination mark will be awarded no more than 49.

    Presentation of Assignments

    ·    You must retain a copy of all assignments submitted.

    ·    See submission details on the separate assignment handout.

    ·    Assignments cannot be resubmitted in this course.

    Assignment Guidelines including Referencing Details

    The Communication Skills Guide will assist you structure your assignments.  A copy of the guide can also be downloaded from

    This publication also provides guidelines on a range of other important communication skills including writing essays and management reports, making oral presentations etc.

    In preparing any written piece of assessment for your postgraduate studies it is important to draw on the relevant ‘literature’ to support critical analysis. Also essential is to reference the literature used. Correct referencing is important because it identifies the source of the ideas and arguments that you present, and sometimes the source of the actual words you use, and helps to avoid the problem of plagiarism.

    The Harvard system is widely used in the School of Accounting and Finance. Guidelines for the use of this style of referencing can be found in the Communication Skills Guide.

    Further assistance with referencing is available from the Faculty’s Learning Support Advisors. The contact details are provided in the Communication Skills Guide.

    Late Assignment Submission

    Students are expected to submit their work by the due date to maintain a fair and equitable system.  Extensions will generally only be given for extraordinary reasons. PLEASE NOTE: extensions will NOT be granted for flus and other minor illnesses for three days prior to the due date notwithstanding a medical certificate – you should have managed your assignment preparation time so that you can submit by the due date.  All requests for extensions must be emailed to the lecturer in charge of the course before the due date.  Each request will be assessed on its merits.  A late assignment (without prior arrangement) will attract a penalty of 20% of the maximum mark per calendar day, or part thereof, that it is overdue.  Late assignments will NOT be accepted after five calendar days and a result of zero will apply for that assessment item.

    Return of Assignments

    Staff aim to mark and return assignments to students three (3) weeks of the due date with written feedback. 


    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy ( course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.