Course : Analysis of Accounting Information

Course Code : BMKT 21243

Credit Value : 3

Status : Compulsory

Level : Level 2

Semester : Semester I

Over all Learning Outcomes    : At the end of the session students should be able to;

  1. identify the statutory and non-statutory requirements of final accounts preparation
  2. recognize the important transactions and/or notes with respect to annual reports and their standards applicable
  3. analyze Financial Accounting statements in appraising performance, identifying possible improvements, and predict distress
  4. determine appropriate Cost Accounting methods and determine costs and profits of overall operations
  5. use Standard Costing information
  6. discuss behavioral attributes of budgeting via planning and controlling.
  7. recognize basic project appraisal fundamentals
  8. build a ‘quantitative mentality’ in analyzing business information

Course Content         :

Topic No

Topic

Learning Outcomes

Teaching and Learning Method

Method of Assessment

01. Analysis of Financial Accounting Information

1.1

An overview for Financial Statement Information

At the end of the session students should be able to;

  1. determine the various parties who demand financial statement information
  2. recognize the conflicts of interest that may arise among the users of financial statement information
  3. distinguish a range of factors that affect the demand and supply for financial information
  4. examine regulatory forces that influence the supply of financial information
  5. discuss the important decisions that can be taken using financial statement information, especially in a marketing perspective
  6. recognize the utilities and boundaries of financial statement information

Lectures Group discussions

Written Report Based on Discussion

End Semester Examination

1.2

Consolidated Accounts with related financial notes and accounting standards

At the end of the session students should be able to;

  1. recognize the components of an absolute set of consolidated financial statements
  2. illustrate the salient features of consolidated financial statements
  3. discuss important accounting standards related to consolidated accounts and its applicability
  4. inspect the important scenarios of consolidation by referring to the consolidated financial accounts included in annual reports
  5. outline the important financial notes pertaining to consolidated accounts using annual reports
  6. analyze consolidated accounts information through giving focus on relevant financial notes and accounting standards
  7. develop an understanding on  the essential adjustments in consolidated financial statements

Lectures Discussions using actual Annual Reports

Group assignment and presentations End Semester Examination

1.3

Financial Statement Analysis

At the end of the session students should be able to;

  1. recognize different ratios (including categories of; Profitability, Liquidity, Asset, Gearing, and Investor) and appraise the importance of information generated by such ratios
  2. identify and calculate different ratios under each ratio category with respect to annual accounts
  3. recognize different calculation options available under certain types of ratios
  4. interpret ratios calculated with respect to different time periods and/or with respect to other entities or industry
  5. discuss how DuPont analysis can be used in connecting ratios and operationalizing the achievement of desired ratios
  6. examine the models available for prediction and classification of distressed firms
  7. apply the knowledge acquired on corporate distress analysis for practical scenarios
  8. display a significant level of grasp on corporate performance analysis and ability to predict corporate distress

Lectures Problem based learning Discussions using Annual Reports

Individual Assignment End Semester Examination

02. Analysis of Management Accounting Information

2.1

Cost Accounting systems

At the end of the session students should be able to;

  1. recognize different cost accounting systems (including; Job, Batch, Contract, Process, and Service) appropriate for different activities undertaken by organization with respect to their business characteristics
  2. demonstrate the calculation steps of Job, Batch, Contract (contract accounts preparation and recognizing profit), Process (losses, gains, scrap value, disposal cost, closing WIP, and opening WIP based on AVCO method), and service costing under appropriate business situations
  3. identify the need for overhead cost accounting systems (such as absorption, marginal and activity based costing)
  4. explain and apply the steps involved in relating costs under absorption, marginal and activity based costing, and calculate profit & perform profit reconciliation where appropriate
  5. apply the right cost accounting techniques in analyzing management accounting information

Lectures Group assignment in recognizing industry practices

Group assignment

End Semester Examination

2.2

Standard Costing

At the end of the session students should be able to;

  1. prepare an Operating Statement reconciling planned performance with actual performance using variances
  2. recognize basic variances and sub-divide those variances where appropriate in to either mix & yield or planning & operating in making them more meaningful
  3. ascertain information out of variances (including; convert variances to percentages, identify whether to investigate a variance or not, and the reasons for variances)
  4. recognize relevant information out of standard costing

Lectures Group assignment in recognizing industry practices

Group assignment

End Semester Examination

2.3

Budgeting

At the end of the session students should be able to;

  1. prepare budgetary control statement (including; original budget, flexed budget, actual, and variances)
  2. discuss the behavioural implications of budgetary planning and control (with respect to different budgetary planning options to that of budgetary control statement)

Lectures Group assignment in recognizing industry practices

Group assignment

End Semester Examination

2.4

Fundamentals of capital budgeting

At the end of the session students should be able to;

  1. explain non-DCF and DCF methods in project appraisal
  2. calculate Payback, ARR, NPV and IRR under simple cash flow projects

Lectures

End Semester Examination

Recommended Reading     :

  1. Anthony, R., Hawkins, D. and Merchant, K. (2007), “Accounting”, 12th edition, McGraw Hill Publishing.
  2. Atkinson, A., Kaplan, R.S. and Young, S.M. (2011), “Management Accounting”, 6th Edition, Prentice Hall.
  3. Curran, M. (2005), “Accounting Fundamentals”, 7th Edition, Mcgraw-Hill College.
  4. Drury, C. (2007), “Management and Cost Accounting”, 7th Edition, Cengage Lrng Business Press.
  5. Finney, H. A. (2009), "General Accounting", Prentice-Hall.
  6. Godwin, N.H., Alderman, C. W. and Sanyal, D. (2012), “Financial Accounting”, Cengage Learning India.
  7. Hilton, R. (2010), “Managerial Accounting”, 9th Edition, McGraw Hill publications.
  8. Hoffman, F., Pacsy, V. A. and Flashner, E. A. (2005), “Accounting Fundamentals”, 5th Edition, Glencoe/Mcgraw Hill Post-Secondary.
  9. Scarlett, B. "Management Accounting: Performance evaluation", Elsevier publications.
  10. Wijewardena, H. (2011) “Financial Accounting in Sri Lanka”, 2nd Edition, Wijaya Publishing.
  11. Wood, F. and Sangster, A. (2012), “Frank Wood's Business Accounting”, Volume 2, Pearson Education, Limited.

Website referencing           :

http://www.maaw.info/IntroToMAAW.htm

http://www.kln.ac.lk/library/02-periodicals-section.htm

 

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