ACCTING 3501 - Corporate Accounting III
North Terrace Campus - Semester 1 - 2016
General Course Information
Course Code ACCTING 3501 Course Corporate Accounting III Coordinating Unit Business School Term Semester 1 Level Undergraduate Location/s North Terrace Campus Units 3 Contact Up to 4 hours per week Available for Study Abroad and Exchange Y Prerequisites ACCTING 2501 Assumed Knowledge CORPFIN 2500 & ECOMMRCE 1000 or equivalent Course Description Topics may include business combinations; amalgamations and takeovers; inter-corporate investments and consolidated accounts; and joint arrangements, foreign currency transactions and translation.
Course Coordinator: Dr Chelsea Liu
Course Coordinator: Dr Su Kim
Location: Office 13.57, Level 13, Building: 10 Pulteney Street
Teaching Assistant: Mr David Zhang
Course Website: www.myuni.adelaide.edu.au
Contact details and consultation times of all tutors will be published on the MyUni course website.
The full timetable of all activities for this course can be accessed from Course Planner.Lectures:
Wednesday, 1:10 pm – 3:00 pm, Horace Lamb, 1022, Horace Lamb Lecture Theatre.
One per week as enrolled. Attendance at tutorials is highly recommended. Three (3) tutorial in-class tests will take place during tutorials throughout the semester (the timing of the tests will NOT be announced in advance), accounting for 10% of the total course grade.
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:
The course Corporate Accounting III primarily deals with the accounting for multiple companies operating together in one way or another (e.g. through corporate share ownership, joint venture, etc). Though each company may be regarded as a separate legal entity under the Corporations Act, from an accounting perspective, they may be regarded (and be required to prepare financial reports) as though they were a single reporting entity. There is a variety of relationships one company can have with another. On one end of the spectrum, a company may hold shares in another company as a passive investor; on the other end, a company may control another company, establishing a parent-subsidiary relationship. In this course, we will learn how to identify and account for each type of inter-company relationship. We will also look at other accounting matters involving corporations, such as foreign currency translations and accounting disclosure requirements concerning related parties and segment reporting.
Course Learning OutcomesCOURSE LEARNING OBJECTIVES
This course seeks to develop your knowledge and understanding in relation to the following areas:
1. The different types of relationships between entities and how these relationships are defined for accounting purposes;
2. The implications of these inter-entity relationships with respect to determining 'reporting entities' for the purpose of financial reporting;
3. The appropriate accounting treatment for each of the different inter-entity relationships as prescribed by the relevant accounting standards, and the application of relevant accounting techniques;
4. The strategic and business model issues associated with business combinations;
5. The accounting for foreign operations belonging to a reporting entity;
6. Some issues in the analysis of consolidated reporting entities (e.g., segment reporting; related party transactions).
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) Deep discipline knowledge
- informed and infused by cutting edge research, scaffolded throughout their program of studies
- acquired from personal interaction with research active educators, from year 1
- accredited or validated against national or international standards (for relevant programs)
A-C Critical thinking and problem solving
- steeped in research methods and rigor
- based on empirical evidence and the scientific approach to knowledge development
- demonstrated through appropriate and relevant assessment
D, G Teamwork and communication skills
- developed from, with, and via the SGDE
- honed through assessment and practice throughout the program of studies
- encouraged and valued in all aspects of learning
G Career and leadership readiness
- technology savvy
- professional and, where relevant, fully accredited
- forward thinking and well informed
- tested and validated by work based experiences
D Intercultural and ethical competency
- adept at operating in other cultures
- comfortable with different nationalities and social contexts
- Able to determine and contribute to desirable social outcomes
- demonstrated by study abroad or with an understanding of indigenous knowledges
B-C, E-F Self-awareness and emotional intelligence
- a capacity for self-reflection and a willingness to engage in self-appraisal
- open to objective and constructive feedback from supervisors and peers
- able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate
Leo,K., Knapp, J.,, McGowan, S., and Sweeting, J., Company Accounting, 10th Edition, 2015, J. Wiley and Sons, Australia.
[Please do not use a prior edition of the textbook, as you will be significantly disadvantaged by not having access to all the learning materials.]
2016 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].
You are permitted to take your handbook into the examinations of this course but the handbook must not contain any writing, notes, tabs, or any other form of unauthorised assistance. Underlining and highlighting are permitted.
You are allowed to take a prior edition of the handbook into the exam, however, no marks will be awarded if references are made to outdated sections of the accounting standards.
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.
Reading is a very important mechanism for your learning in this course. Lectures will only serve to highlight the key points in each topic, which are to be supplemented by completing the prescribed readings. Everything covered in the prescribed readings is potentially examinable.
See MyUni course website for recommended resources.
Course materials for each topic are distributed online via the MyUni course website.
Lectures will be recorded and posted on the MyUni course site.
Learning & Teaching Activities
Learning & Teaching Modes
TEACHING & LEARNING MODES
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.
For each topic of this course, the following steps are designed to enable you to maximise your learning efficiency and effectiveness:
[Stage 1: Background Information]
1. Readings - you should ensure that you complete the readings before attending the lectures. 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
[Stage 2: Instructions & Demonstrations]
2. Lectures – serve to highlight the key content of each topic. 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. Lectures will be recorded and posted on MyUni.
[Stage 3: Practice and Feedback]
3. Tutorials - allow you to explore issues and material in an interactive group setting and receive feedback and guidance. 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.
Please attempt your tutorial questions BEFORE attending the tutorials, which is vital to your successful completion of this course. If you have not prepared beforehand you will have significant difficulties in understanding what is going on in the tutorials.
[Stage 4: independent learning & feedback]
4. Self-Study Questions - help you to further solidify your understanding of each topic. Discussion Boards and Consultation Times are available for you to resolve any remaining queries.
Contact details and consultation times for all tutors in the course will be available on the MyUni course site.
[Stage 5: contemporaneous assessments]
5. 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.
Tutorials commence in Week 2.
Students must attend the tutorial in which they are enrolled. Lecturers and tutors do not have the authority to override the university enrolment system. If you attend a tutorial in which you are not enrolled, you may be asked to leave.
You are ONLY allowed to sit the in-class test in the tutorial in which you are enrolled (see below for details in the 'Assessments' section).
The information below is provided as a guide to assist students in engaging appropriately with the course requirements.WORKLOAD
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 SummaryCOURSE OVERVIEW:
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.
This course will cover the following topics. For more details please refer to the 'Course Information' tab on the MyUni course site.
Topic 1 - Inter-entity relationships & Accounting for simple share investments
Topic 2 - Due Diligence in Business Acquisitions & Takeover and Competition Laws
Topic 3 - Business Combinations through acquiring assets and liabilities
Topic 4 - Consolidation – Introduction (the concept of control)
Topic 5 - Consolidation - Wholly Owned Subsidiaries
(Note: Mid-Semester Exam will take place in week 6 (Time and Date TBA); tutorials will run as normal).
Topic 6 - Consolidation - Intra-Group Transactions (weeks 7-8) Topic 7 - Consolidation - Non-Controlling Interest
Topic 8 - Investments in Associates - Equity Accounting
Topics 9 and 10 - Accounting for Joint Arrangements & Foreign Currency Translation
Topic 11 - Segment Reporting & Related Party Disclosures.
Note: the relevant readings and tutorial activities for each topic are provided on separate topic outline handouts provided on the MyUni site for this course.
Specific Course RequirementsASSUMED KNOWLEDGE
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 - 6, 9 and 11 of the textbook.
The University's policy on Assessment for Coursework Programs is based on the following four principles:
- Assessment must encourage and reinforce learning.
- Assessment must enable robust and fair judgements about student performance.
- Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
- Assessment must maintain academic standards.
Assessment SummaryThe detailed requirements of each assessment item will be posted on the MyUni site for this course.
The assessment components are as follows:
Details: This assignment must be done in teams of three students. Further details are provided in the assignment instructions, which can be found under the ‘Assignments’ Folder on the MyUni course site.
Due Date: To Be Advised (TBA)
Mid-Semester Exam 20%
Details: The exam will be held in Bonython Hall during week 6 (Date and Time TBA). Details to be provided on a separate notice in the ‘Assessment Information’ Folder on the MyUni course site.
Content covered: This exam will cover topics 1 – 4 only.
Tutorial In-Class Tests 10%
Details: Tutorial attendance is strongly encouraged. Several in-class tests will take place during tutorials throughout the semester. Detailed information on the tutorial in-class tests (including rule of conduct) is provided in the ‘Assessment Information’ Folder on the MyUni course site.
Due Date: Throughout the semester.
Final Exam 50%
Details: Duration of 3 hours.
Important Note: to gain a pass for this course, a satisfactory result must be obtained on the final examination as well as a total grade of at least 50% overall. Students not achieving the minimum examination mark will be awarded no more than 49.
Assessment Related Requirements
In-Class Tests and Tutorial Enrolments
Students can only sit the in-class tests in the tutorials in which they are officially enrolled (via Access Adelaide).
If you attend a tutorial in which you are not enrolled, you might be asked to leave and will not be allowed to sit the in-class test.
Students can only change their tutorial enrolments through Access Adelaide. Lecturers and tutors do not have the authority to override the university enrolment system.
Detailed requirements of each assessment item will be posted on the MyUni site for this course.
Detailed requirements will be posted on the MyUni site for this course.
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.
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 (http://www.adelaide.edu.au/policies/101/) 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.
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