Module Code and Title:   ACT204 Corporate Reporting I

Programme:                          Bachelor of Commerce

Credit:                                    12

Module Tutor:                       Madhav Verma, Arindam Ghosh, Laxmi Kanth Dhakal, 

                                               Dilli Ram Sharma,Ritu Barna Adhikari , Tshering   Pemo, Nawang Yangden 

Module Coordinator:            Arindam Ghosh

General objective: The module is designed to develop knowledge and skills in conceptual and regulatory framework in the preparation of financial statements of incorporated entities. The module is based on the BAS and IASB issued standards that enhance relevancy and applicability of knowledge and skills obtained in the module. The learners acquire other capabilities such as communication, application of computers and decision making skills by participating in the learning activities and assessment components.

Learning outcomes – On completion of the module, students will be able to:

1. Discuss and apply a conceptual and regulatory frameworks for financial reporting;   
2. Account for transactions in accordance with BAS and IASB issued standards; 
3. Prepare and analyse extracts of financial statements of the relevant transactions in accordance with the standards;  
4. Examine measurement and recognition principles related to transactions in this module, and suggest appropriate accounting policies for entities of varying sizes; 
5. Discuss and apply presentation and disclosure requirements for transactions  specified in this module in accordance with the financial reporting framework; 
6. Use computer skills for financial data analysis and presentation of that information to the users; and 
7. Demonstrate team work and managerial skills. 

Teaching and Learning Approach:

Assessment Approach:

Each student will complete 2 written assignments on topics related with managerial decision making on different hypothetical practical problem on accounting.  The exact topics will be informed during the session. The assignments will be designed for 20 marks (10 marks each for assignment, which will be later converted to 15%) 

6%       Content, identifying the problems areas

6%       Analysis of problems and suggesting solutions using appropriate accounting tools and techniques.

3%       Presentation, writing style- use of proper academic style

Students will be assigned one topic in a group of 4. They will collect secondary data on the given topic and analyse, conclude and make their recommendation in a paper of 1000 words (15%). This will be followed by a presentation (10%), with 10 min Q&A.

2%       Group mark: coordination of presentation and distribution of work among the group members.

2%       Collection of relevant data 

2%       Analysis and interpretation of data 

2%       Conclusion and recommendation

1%       Logical presentation, writing style 

1%       Bibliography and citation 

4%       Presentation Group mark: coordination and distribution of work among the group member.

6%       Presentation Individual mark will be assessed on following criteria: 

2%       Subject knowledge and ability to answer Q& A

2%       Smartness, body language, pronunciation, audibility

2%       Organization of presentation 

Students will be required to solve situation based business related problems in-class using accounting techniques and tools covered in class. There will be 2 problem solving tests each of 1 hour duration. Each problem solving test is worth 5% and will be assessed on the following criteria.

5%       identifying the appropriate accounting technique to solve the problem

5%       correct solution of the problem

5%       contribution to the class discussion and listening to and responding logically to the viewpoints of others

Students will take a written exam of 2 hours duration covering topics up to the mid-point of the semester.

The module will have a semester-end exam for 2 hours covering the entire syllabus. The question will be divided into two parts – Part A (carrying 40% of the exam weightage) will be mostly of short answer including objective questions. Part-B (carrying almost 60% of the exam weightage) will be mostly of essay type or an extended response to the given question. This part of the question requires students to apply, analyse, and evaluate or construct knowledge and skills. Cases will also be used to test the levels of knowledge.

Pre-requisites: ACT101 Financial Accounting

Subject matter

1. Conceptual framework
   1. Meaning and need of a conceptual framework for financial reporting
   2. Meaning and purpose of general purpose financial reports
   3. Measuring financial performance by accrual accounting and cash flows
   4. Fundamental qualitative characteristics and enhancing qualitative characteristics of financial information 
   5. Applying going concern assumption of entity in the preparation of financial statements 
   6. The elements of financial statements 
      1. Statement of financial position 
      2. Statement of profit or loss and other comprehensive income
      3. Statement of cash flows 
   7. Meaning of ‘recognition’ and application of recognition criteria on (i) assets and liabilities (ii) income and expenses 
   8. Meaning and types of ‘measurements’ (i) historical cost (ii) current cost (iii) net realizable value (iv) present value of future cash flows and (v) fair value 
   9. Advantages and disadvantages of different types of measurement 

1. Regulatory framework 
   1. Roles and importance of regulatory framework 
   2. Regulatory framework in Bhutan including AASBB, Companies Act, Royal Audit Authority, Royal Securities Exchange of Bhutan., Public Finance Act and the IFRS Foundation 
   3. Purpose of Accounting Standards and official pronouncements 
   4. Evolution of BAS and BFRS and authority of these standards 
   5. IASB’s standards and its influence on national standards
   6. Principle based vs rule based accounting standards

1. Accounting for property, plant and equipment    
   1. Definitions of ‘PPE’, ‘cost’, ‘residual value’, ‘fair value’, ‘carrying amount ’, ‘recoverable amount’ and ‘depreciable amount’
   2. Recognition criteria for PPE (including borrowing costs)
   3. Initial and subsequent measure of PPE 
   4. Incidental incomes and expenses related to construction of PPE
   5. Revaluation of PPE
   6. Account for revaluation gains and losses 
   7. Compute depreciation based on the revaluation and cost models of      assets
   8. Difference between investment properties and PPE
   9. Definition of impairment and calculate an impairment loss
   10. Circumstances that may indicate impairments to assets
   11. Accounting for impairment losses 
   12. Accounting for disposal of PPE
   13. Requirements of BAS 16/IAS 16  

1. Accounting for liabilities  
   1. Concept of capital structure and finance costs
   2.  Capital structure of a limited liability company including:                        (i) Ordinary shares ii) Preference shares (redeemable and irredeemable) and (iii) Loan/debts. 
   3. Record movements in the share capital and share premium accounts
   4. Identify and record the other reserves which may appear in the company statement of financial position
   5. Definition of a bonus (capitalisation) issue and its advantages and disadvantages
   6. Definition of a rights issue and its advantages and disadvantages
   7. Record and show the effects of a bonus (capitalisation) issue in the statement of financial position
   8. Record and show the effects of a rights issue in the statement of financial position
   9. Record dividends and show how it is reported in the financial statements
   10. Calculation and recording of finance costs and presentation of finance cost in the   financial statements
   11. Components of the statement of changes in equity 

1. Accounting for intangible assets and government grants 
   1. Accounting for intangible assets
      1. Definition of an intangible asset 
      2. Recognition criteria of intangible assets
      3. Internally generated vs purchased intangible assets
      4. Accounting for internally generated and purchased intangible assets
      5. Difference between goodwill and other intangible assets 
      6. Initial and subsequent measure of intangible assets
      7. Accounting for research and development cost
      8. Amortization of intangible assets with definite useful life
      9. Intangible assets with indefinite useful lives
      10. Requirements of BAS 38/IAS 38 
   2. Accounting for government grants 
      1. Concept of government grants
      2. Conditions for receiving grants
      3. Types of government grants –asset related grants and income related grants
      4. Methods of accounting for government grants-capital and income method
      5. Disclosure requirement 

1. Revenue recognition 
   1. Principles of revenue recognition (5 steps model): 
      1. Identification of contracts
      2. Identification of performance obligations
      3. Determination of transaction price
      4. Allocation of the price to performance obligations
      5. Recognition of revenue when/as performance obligations are satisfied.
   2. Recognising revenue generated from contracts where performance obligations are satisfied over time or at a point in time
   3. Methods for measuring progress towards complete satisfaction of a performance       obligation.
   4. Criteria for the recognition of contract costs.
   5. Account for the following transactions by applying revenue recognition principles: 
      1. principal versus agent
      2. repurchase agreements
      3. bill and hold arrangements
      4. consignments
   6. Presentation and disclosure requirements of BFRS 15/IFRS 15

1. Accounting for Provisions, contingent liabilities and contingent assets
   1. Definition of provision
   2. Difference between liability and provision 
   3. Difference between legal and constructive obligations
   4. Measurement of provisions 
   5. Account for provisions including presentation of provisions in the financial statements 
   6. Definition of contingent assets and liabilities 
   7. Accounting treatment and required disclosures for contingent assets and liabilities
   8. Account for:  (i) warranties/guarantees   (ii) onerous contracts   (iii) environmental and similar provisions   (iv) provisions for future repairs or refurbishments. 
2. Events after the reporting period-
   1. Meaning of adjusting and non-adjusting events after the reporting period
   2. Difference between adjusting and non-adjusting events after the    reporting period
   3. Items requiring separate disclosure, including their accounting treatment and   required disclosures

1. Accounting for Income taxes 
   1. Definitions: Accounting profit, taxable profit (tax loss), tax expense, current tax, temporary differences (taxable and deductible temporary differences), tax base, deferred tax liabilities and deferred tax assets.  
   2. Recognition of current tax liabilities and current tax assets
   3. Recognition of deferred tax liabilities and deferred tax assets
   4. Situations that give rise to temporary differences between tax base and carrying amount of an asset or liability
   5. Unused tax losses and unused tax credits 
   6. Measurement of current tax liabilities 
   7. Measurement of deferred tax assets and liabilities 
   8. Presentations of tax assets and liabilities -offset
   9. Presentations of deferred tax liabilities and deferred tax assets

Reading List:

1. Essential Reading
   1. PKF International Ltd (2017). Wiley IFRS 2017: Interpretation and Application of IFRS Standards. India, Wiley.
   2. Cassy, B., Theodore, C. & David, C. (2016). Advanced Financial Accounting, McGraw-Hill
   3. David, Y. & Jacob, C. (2016). Corporate Financial Reporting and Analysis-A Global Perspective, Wiley 
   4. Derry, C. (2016). Advanced Financial Reporting: A Complete Guide to IFRS, Pearson Education
2. Additional Reading
   1. Barry, Elliott & Jamie, E. (2016). Financial Accounting and Reporting, Pearson
   2. Clare, R., Pauline, W. & Paul, G. (2012). International Corporate Reporting: a comparative approach, Pearson 
   3. Christopher, H., Brendan. O’dwyer&Jeffrey, U. (2016). Re-theorizing the configuration of organizational fields: the IIRC and the pursuit of ‘Enlightened’ corporate reporting, Accounting and Business Research
   4. Meigs, W.B & Meigs, R.F. (-). Accounting - The basis of business decisions, McGraw     Hill.
   5. Peter, M. K., Brynn, W., Steve McCormickc, Tom M., & Mary R. (2015). Improving global environmental management with standard corporate reporting, PNAS, Vol. 112 (24), P. 7375-7385
   6. Robert, G. E. & George, S. (2014). Crporate and Integrated Reporting: A Functional Perspective, Harvard Business Publishing
   7. Ryszard, K. (2016). European Union Regulations of As a Response to the Evolution of Business Activity Conditions, Applied Finance and Accounting, Vol. 2(1)
   8. The KPMG International Financial Reporting Group (2015), Insights into IFRS: KPMG's Practical Guide to International Financial Reporting Standards, KPMG International Group
   9. Tull, J. M., John, R. & Kathleen, P. (2016). How do CEO incentives affect corporate tax planning and financial reporting of income taxes?, Review of Accounting Studies, Vol. 21(20. Pp.672-710
   10. Warwick, S.&Tuyana, D. (2015). Early assessments of the gap between integrated reporting and current corporate reporting, Meditari Accountancy Research, Vol. 23 Iss: 1, pp.92 – 117
   11. William, H. B. (1998). Financial Reporting: An Accounting Revolution, Pearson

Date: July, 2017