Professional Level-III


301.  Advanced Financial Accounting – II – 100

Course Objectives

This course is designed to fulfill the following objectives.  To know :

a. ethical code and standard of reporting

b. accounting process of business combination with due focus on related IAS and IFRS

c. consolidated accounting reports and their contents

d. length and breadth of interim financial reporting, segment reporting

e. the model of government accounting and human resource accounting 


A: Ethics & Standards

301.01  Ethical Issues in Financial Reporting

Fraudulent financial reporting, Ethical standards for preparers of financial statements and reports, Ethical standards and codes of ethics for management accountants and financial executives, Codes of ethics for accountants in public practice


Describes best practices and emerging issues in governance for profit-oriented, not-for-profit, and public sector organizations (e.g. impact of increasing shareholder and stakeholder activism).


B:  Accounting for Combination

301.02.1  Accounting for Business Combinations (IFRS-3)

Anti-trust considerations, Methods for arranging business combinations, Establishing price for a business combination, Purchase method of accounting, application of  IFRS-3


301.02.2 Consolidated Financial Statements on date of Acquisition (IAS-27 & IAS-28)

Parent company – subsidiary relationships, Consolidation of wholly owned subsidiary, Consolidation of partially owned subsidiary, Application of International Accounting Standards.


301.02.3 Consolidated financial statements following acquisition

Operating results of wholly owned subsidiaries, Equity method and cost method, Operating results of partially owned subsidiaries, Equity method for partially owned subsidiary for first year of business combination, Equity method for partially owned subsidiary for second year after business combination Cost method for partially owned subsidiary.


301.02.4 Unrealized profit in inter-company sales of inventory

Inter-company transactions not involving gain or loss, Inter-company transactions involving gains or loss, Inter-company sales of merchandise, Inter-company sales of plant assets, Inter-company lease of property, Inter-company sales of intangible assets, Acquisition of affiliate’s bonds.


301.02.5 Income taxes, cash flows, and installment acquisitions in combination (IAS-7, 12)

Income taxes in combination a.nd consolidation, Consolidated statement of cash flows, Installment acquisition of subsidiary,


301.02.6  Changes in Ownership Interests

Changes in parent company’s interest in a subsidiary, Subsidiary with preferred stock outstanding Stock dividend distributed by subsidiary, Indirect shareholding and parent company’s common stock owned by a subsidiary


C.  Branch Accounting

301.03. Accounting for Branch Activities

Accounting system for a branch, Expenses incurred by home office and allocated to branches, Methods of billing merchandise shipments to branches, Separate financial statements for branch and for home office, Combined financial statements, Billing of merchandise to branches at prices above costs, Treatment of beginning inventories priced above costs, Reconciliation of reciprocal ledger accounts, Transactions between branches  


D. Foreign Currency Accounting

301.04.1 Accounting for Foreign Currency Transactions (IAS-21 & IAS-39)

Purchase of merchandise from a foreign supplier, Foreign currency transaction gain or loss, Sale of merchandise to a foreign customer, Loan payable in a foreign currency, Loan receivable in a foreign currency, Forward contracts, Application.


301.04.2 Translation of  Financial Statements of Foreign Affiliates

Functional currency, Re-measurement of a foreign entity’s accounts, Translation of a foreign entity’s financial statements.


E. Interim & Segment Reporting

301.05 Interim Financial Reporting (IAS-34)

Problems in interim financial reports, Reporting accounting changes in interim periods, Application of IAS-34.


301.06    Segment Reporting (IFRS-8)

Reporting components of an entity, Product segments and geographical segments, Allocation of expenses to operating segments, Reporting disposal of business segment.

Corporate Reporting : Describes the methods of compensation (e.g. cash, stock, and options), corresponding tax implications, and related factors for a given organization. Describes the methods of business valuation. Explains the accounting treatment for a given organization of the following specific items and transactions

Employees Benefit, R & D, EPS: Non-monetary Transactions

Pensions and other employee future benefits. Research and development (R & D) costs. Non-monetary and related party transactions. Earnings per share.


301.07    Accounting for Liquidation and Re-organization

Bankruptcy liquidation, Shareholders voluntary liquidation, Creditors involuntary liquidation, Liquidation by order of the court, Role of liquidator and official liquidator, Discharge of debtors, The statement of affairs, Recovery by each class of creditors, Accounting and reporting for trustees, Corporate re-organization, Accounting for re-organization, Disclosure of re-organization.


F.  HRA, Government Accounting, Dilutive Securities and Earning per Share

301.08   Government Accounting

Nature and scope of government accounting, Frame work and structure of government accounting, Finance and revenue accounts, Budget and annual development program. 


301. 09   Human Recourse Accounting (HRA)

Definition and its scope, Emergence of human resource accounting, Traditional accounting practices, Human resource -an asset, classification of human resource accounting approaches / model, Cost based approaches, historical approaches accounting, Replacement cost based approaches,  Opportunity cost model, Economic model, Goodwill method, Adjusted discounted future wages method, Behavioral and other surrogate measures.


301.10   Dilutive Securities and Earning per Share (IAS-33)

Dilutive Securities and Compensation Plans: Accounting for Convertible Debt, Convertible Preferred Stock, Stock warrants, Stock Compensation plans-computing Earning Per Share: Simple Capital Structure and Basic Earning Per Share, Complex Capital Structure and Diluted Earnings Per Share, Comprehensive Earning per Share, IAS-33.


Text Books:

1. Modern Advanced Accounting in Canada, 4th edition – Murray W. Hilton.

2. Advanced Financial Accounting, 4th Canadian edition  – Byrd & Chen.

3. Modern Advanced Accounting, 10th edition - E. J. Larsen (McGraw-Hill).

4. Advanced Accounting, 7th edition – Hoyle, Schaefer & Doupkin.

5. International Financial Reporting Standards - IASB, London (Latest edition).


Reference books:

1 Advanced Financial Accounting, 6th edition - Baker, Lembke & King (McGraw-Hill).

2. Advanced Accounting, 6th edition - Haried, Imdieke & Smith (John Wily & Sons, Inc.).

3. Ethics Reading Handbook - CGA, Canada (2nd edition).

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