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Department of Accountancy & Finance

ACCT 211 – Financial Accounting and Reporting

Semester 1, 2015

COURSE OUTLINE

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Paper Description and Aims

This paper examines the accounting practice and theory of financial accounting. This paper is designed to develop technical proficiency as well as an understanding of the context of accounting as it is used in business.

Upon successful completion of this paper, you should be able to use technical skills in the preparation and presentation of corporate financial reports in accordance with generally accepted accounting practice. You will understand the external reporting environment for financial reporting, including the rules and regulations that govern corporate financial reporting. You should be able to apply selected New Zealand International Accounting Standards which impact on the determination of income and external reporting. You will also have a basic understanding of accounting for groups of companies.

Learning Outcomes

The Learning Outcomes for ACCT 211 contribute towards the development of the graduate attributes for the Otago Business School:

When you graduate from the University of Otago Business School with your Bachelor of Commerce you will have attained knowledge and skills in a range of business areas, and specialist knowledge in the area of your chosen major(s).

The Bachelor of Commerce programme at the Otago Business School develops:

Responsible business graduates who understand their role in leading New Zealand towards economic, environmental, social and cultural sustainability and well-being.

BCom Graduate will

1. Be able to think logically and critically and to make well-reasoned decisions using advanced problem-solving skills

2. Understand the nature of business through advanced knowledge in at least one major subject area plus an integrated awareness of all major business functions

3. Understand the cultural, legal, social and environmental factors that affect, and are affected by, business operations

4. Be able to demonstrate leadership while working constructively, cooperatively and respectfully with others

5. Understand the ethical consequences of business decisions

6. Communicate effectively within a range of contexts

http://www.otago.ac.nz/business/study/undergraduate/otago033074.html

Specifically, the Learning Outcomes listed below support the graduate attributes numbered in square brackets:

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Understand the background and purpose of the International Financial Reporting Standards (IFRS) as they are applied in New Zealand [1, 3, 5],

Explain the purpose and describe the main components of financial statements [2],

Understand the overall principles and other considerations relating to the presentation of a Statement of Financial Position (Balance Sheet), Statement of Comprehensive Income (Income Statement), Statement of Changes in Equity and Notes to Financial Statements [1, 3, 5, 6],

Prepare a Statement of Cash Flows [2],

Explain and apply the revenue recognition criteria [2],

Understand some of the issues relating to management of non-current assets [2],

Understand some of the issues relating to management of liabilities [2],

Account for matters relating to shareholders’ equity [2],

Understand the nature of and account for business combinations [1, 2], and

Prepare basic consolidated financial statements [2, 6].

The nature of the class assessments will support attribute [4].

Teaching Staff

Paper Coordinator

Name: Kate Wynn-Williams Office: Commerce Building, 5th floor, room 542 Email: kate.wynn-williams@otago.ac.nz Office Hours: Mondays and Wednesdays, 11am – 1pm

Lecturer

Name: Ranjan Iddamalgoda Office: Commerce Building, 5th floor, room Email: ranjan.iddamalgoda@otago.ac.nz Office Hours: weeks 1 – 5 : Monday 12.30 – 2pm, Thursday 9.30 – 11 am weeks 6 – 13: to be confirmed

Tutors

The names and contact details for the tutors in ACCT 211 can be found in Blackboard.

You should contact Kate Wynn-Williams with any administrative enquiries about the paper, e.g. tutorial changes, or requests for late submission of assignments. Please include “ACCT 211” in the subject line. All emails will be answered, but not necessarily straight away.

Any changes to office hours will be posted on Blackboard (and announced in lectures if possible). Appointments are not needed for office hours. Please use these sessions to ask any questions about the course or for general course advising.

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Course Delivery

Lecture Day/Time: LL1 Monday 9 am TG 07 LL2 Tuesday 10 am Auditorium LL3 Friday 12 noon TG 07

Tutorials Day/Time: TT1 Wednesday 9 am T 203 TT2 Wednesday 11 am T 201 TT3 Wednesday 1 pm T 201 TT4 Wednesday 4 pm OW 206 TT5 Thursday 9 am T 203 TT6 Thursday 12 noon T 202 TT7 Thursday 1 pm St David 4 TT8 Thursday 4 pm T 201

Every week students must attend the three 50 minute lectures and one 50 minute tutorial each week. There are also optional workshops that students may attend for revision of relevant material from ACCT 102.

Workshops: T1 Tuesday 12 noon St David 5 T2 Tuesday 1 pm St David 5

Lectures present the key conceptual material. The ideal is to include discussion and interaction between teaching staff and students, though this can be difficult with large class sizes. Therefore it is particularly important to attend weekly tutorials.

It is to your benefit that you read the chapters assigned BEFORE each lecture and you should prepare short notes on them. This will enhance your understanding of the subject matter to be covered. The lecturers will bring the important issues to your attention, and add other information that may not be gleaned from the weekly readings. Lecture slides and/or notes will be available in outline form on Blackboard at the end of each week before the relevant lectures. These are not substitutes for the lecture. Refer to Course Calendar (in this course outline) for each week’s topics.

Tutorials are interactive, collaborative sessions in which students attempt to cement concepts presented at lectures with their peers in a supportive environment. Tutorials begin in the second week of semester. You will be allocated to a tutorial and this will be available in eVision. Tutorial times and locations will be posted on Blackboard during the first week of lectures.

Tutorials offer you the opportunity to work in groups on a series of tasks designed to apply the concepts that you have been exposed to in class and from your reading, and to stimulate your interest in the course as it applies to “everyday” issues. The key feature of tutorials, as opposed to lectures and individual study, is participation of all members of the tutorial group. Please prepare for tutorials before going to them. The tutorials will not be mini-lectures.

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Tutorial exercises and assessment tasks will be posted at the end of the week before the relevant tutorial session. Further details will be explained in lectures and posted on Blackboard.

If you require a tutorial stream change due to a clash or late enrolment after formal Course Approval, this can be done in the first two weeks of the semester. The last date for stream changes is Friday 06 March 2015. Please see:

Gail Maxwell (Room 5.51) or Margaret Grundy (Room 5.01) Accountancy & Finance Department Commerce, level 5

each weekday day from 10 – 11 am or 2 – 3 pm only.

The workshops are new in 2015, and are designed to be especially interactive and collaborative. They are being introduced to allow opportunities in a semi-structured environment for revision and reinforcement of prerequisite knowledge, to better prepare students for the introduction of new and more complex topics. The topics and practice exercises will be explained in lectures and posted on Blackboard in the week before the relevant session.

The Course Calendar (in this outline) details scheduling information. Note that this calendar may change as the course proceeds. Any changes will be announced at lectures and be detailed on Blackboard.

Students are expected to prepare for and attend all classes to gain full benefit from the course

All activities should be prepared for by reviewing information detailed on Blackboard and completing any assigned readings. Students unable to attend a lecture are expected to catch up on missed material. Unless stated otherwise, all aspects of the course are examinable.

Expectations and Workload

As a guideline, an 18-point paper is designed to involve approximately a minimum of 12 hours of work per week. For this paper, that time can be estimated as follows:

Attendance at lectures 3 hours Attendance at tutorials 1 hour Weekly exercises 3 hours Reading & taking notes 3 hours

Test/Exam study 2 hours Total hours of work per week 12 hours

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This is only a rough guide for time management, and no two students have exactly the same study habits. If anyone is having difficulties, please seek advice early from tutors, attending the workshops, visitiing the lecturer during office hours or talking to the class representative(s) as soon as possible. It is better to sort out small concerns before they become big issues!

Further information about course expectations and workload is available from the University of Otago website:

http://www.otago.ac.nz/study/planning/workload.html

The University Library provides a multitude of resources for students. These include subject guides, research resources, and citation styles. As well as an extensive range of books, there is an Audiovisual Centre that contains many interesting and useful videos, documentaries and other resources. If you are unfamiliar with the University Library and all its facilities, please sign up for a tour at the beginning of the semester.

Check it all out at http://www.library.otago.ac.nz/services/undergrad.html

Course Learning Resources

Textbook

The textbook for 2015 book is a custom book, with chapters taken from “Intermediate Accounting - IFRS Edition, Volumes 1 & 2,” by Kieso, Weygandt and Warfield, published by Wiley. It is available as a custom book from the University Book Shop:

Otago Custom Publication – ACCT 211 Financial Accounting and Reporting

There is also an ebook version available by following this link:

https://customer.au.wiley.com/CGI-BIN/lansaweb?procfun+shopcart+shcfn01+funcparms+parmisbn(a0100):0730321576+parmqty(p0050):1+parmurl(l0650):http%3A%2F%2Fau.wiley.com%2FWileyCDA%2FWileyTitle%2FproductCd-EHEP003129.html

Blackboard

Blackboard https://blackboard.otago.ac.nz/ provides you with access to course materials, class notices, and resources. Blackboard is used to email the whole class so it is important that you check your student email and Blackboard regularly.

Student Webmail IMPORTANT - DO THIS NOW:

Forward your University email address to an email address that you use regularly as follows:

1. Log into your StudentMail account using your student username and password

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2. Click Cog button (top right corner) > Options

3. Under Account, select the Forward your email shortcut under the Short Cuts menu on the right side of the screen.

4. Under the Forwarding heading, type in the email address you want your email to be forwarded to. You can also choose to have a copy of these emails kept on your StudentMail account, so please check the box if you would like this.

5. Click the Start forwarding button.

Your student email is the one used for all important notices and messages from the University. It is essential that you receive your @student.otago.ac.nz emails!

Assessment

All material presented is examinable (except where stated otherwise) by assignments and the final examination. All important assessment information such as due dates and times, content, guidelines and so on will be discussed at lectures and, where appropriate, detailed on Blackboard.

Students are responsible for ensuring that they are aware of this information, keeping track of their own progress, and catching up on any missed classes.

Assessment % of final grade

Requirements to pass this paper

Assignments and Group Presentation 15%

Midsemester Test (weeks 1 – 5 inclusive) 35%

Final Exam (whole semester) 50% at least 50 / 100 in the final exam

Note: the final examination must be sat and passed with a grade of at least 50%. Exceptional internal marks will not be used to cross-subsidise poor final examination performance.

Assignments and Group Presentation – 15%

In most of the weekly tutorial sessions, there will be exercises posted ahead of time for students to work through before coming to class. Tutors will assign marks according to the level of effort made to complete the weekly exercises; they do not need to be “correct” in all aspects in order to gain the maximum marks. Students can gain up to 10% of the total course grade through weekly assignments.

In weeks 9 and 10, group presentations will be held during tutorial sessions. Groups of students will be able to prepare a short presentation for their tutorial session that can gain up to 5% of the total course grade. Details will be discussed in lectures, with further information available on Blackboard.

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Note: all students who wish to take part in this activity must be in a group before 4pm on Thursday 2nd April (at the end of week 6, before the Easter break) at the very latest. There will be no exceptions.

Midsemester Test – 35%

This is a two-hour mid-semester test, scheduled for the week immediately after mid-semester break. As soon as a date has been determined, this will be announced and posted on Blackboard. The intention is to hold this test between 6 - 8pm. The test will cover lecture material and exercises from weeks 1 to 5 inclusive.

Printed booklets will be provided with spaces for both workings and your answers. You will however need to bring your own pens, pencils and a university approved calculator (see information below).

Please note that an early departure for midsemester break (or a late return) is not normally accepted as a reason for missing the test. However, with a large class, there may be some students who have genuine reasons for seeking a makeup test. Any requests must be supported by evidence, and will be considered on a case by case basis.

Final Exam – 50%

The Final Exam will cover material from the whole semester, though there will be an emphasis on weeks 6 to 12 inclusive. It will be held during the official University examination time. We have no say in when this will be. If you have any problems with time and/or date, you need to contact the Examinations Office in the Registry Building.

The Final Exam will be three hours long, and you must achieve at least 50% on Final Exam to pass the paper, regardless of internal marks. In other words, good marks throughout the semester will not compensate for a poor final exam.

Calculators

The following note is taken from the University of Otago website:

The FIVE models of approved calculator are: • Casio FX82 • Casio FX100 • Sharp EL531 • Casio FX570 • Casio FX95 Any version of the approved models will be accepted. Calculators that are not one of the approved models are not permitted, regardless of how similar they may appear to the approved models. If you bring a non-approved calculator into an examination which allows approved calculators only, it will be confiscated for the duration of the examination.

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Learning Outcomes

Learning Outcome

Pre

sentatio

n

Weekly

assign

men

t

s Mid

semeste

r Test

Exam

To

tal

Understand the background and purpose of the International Financial Reporting Standards (IFRS) as they are applied in New Zealand

Explain the purpose and describe the main components of financial statements

Understand the overall principles and other considerations relating to the presentation of a Statement of Financial Position (Balance Sheet), Statement of Comprehensive Income (Income Statement), Statement of Changes in Equity and Notes to Financial Statements

Prepare a Statement of Cash Flows

Explain and apply the revenue recognition criteria

Understand some of the issues relating to management of non-current assets

Understand some of the issues relating to management of liabilities

Account for matters relating to shareholders’ equity

Understand the nature of and account for business combinations Prepare basic consolidated financial statements

Total 5% 10% 35% 50% 100%

Grading System The grading scheme used at Otago is:

A+ 90-100 C+ 60-64 A 85-89 C 55-59 A- 80-84 C- 50-54 B+ 75-79 D 40-49 B 70-74 E <40 B- 65-69

Quality Assurance

At the Otago Business School we monitor the quality of student learning and your learning experience. Your assessed work may be used for assurance of learning processes, such as evaluating the level of achievement of learning outcomes, with the aim of improving the quality of our programmes. All material used for quality assurance purposes will be treated as confidential and the outcome will not affect your grades.

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Course Calendar

Dates Week Topic Notes

23 - 27 Feb 1 Introduction to ACCT 211 - structure of ACCT 211 & expectations - what are accounting standards - CAANZ, CPA Australia - Conceptual Framework - IFRS and NZ context

Chapters 1 & 2

2 – 6 Mar 2 Introduction continued - XRB website - NZ IRFS 1, 8, 10 - intro to presentation and disclosure issues - ethics Income Statement - Revenue Recognition - Comprehensive Income - NZ IAS 18

Chapters from week 1 plus Ch.14 Chapters 3 & 11 tutorials & workshops start

9 – 13 Mar 3 Income Statement continued Chapters from week 2

16 – 20 Mar 4 Equity - components = CC, RE, & concept of reserves (ARR, For.Exch.) - NZ IAS 21 Equity as balanced by Liabilities - leases - provisions - management of liabilities

extra readings [provided on Blackboard] Chapter 12 [parts]

23 – 27 Mar 5 and by Assets - traditional (PPE, depreciation, disposal) - NZ IAS 16 - NZ IAS 38, 41 - intangibles, heritage, agricultural

Chapters 5, 6, 7 & 10 [parts]

30 Mar – 3 Apr

6 Shareholders’ Equity - Companies’ Act - share issues, forfeiture, re-issue - bonus issues, rights issues, options, share buy-backs, redemptions, conversion of preferred shares - dividends, EPS 3 April = Good Friday (no lecture)

Chapters 8 & 9 deadline to join a group: 4pm on Thursday 2 April

Mid-Semester Break

13 -1 7 Apr 7 Shareholders’ Equity continued

and [continued on next page...]

Chapters from week 6 plus Ch. 4 [first ½] midsemester test in week 7

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Cash Flow Statements - NZ IAS 7 - format and presentation / preparation of CFS - direct and indirect methods - free cash flow

Chapters 4 [second ½] and Ch.13

20 - 24 Apr 8 Cash Flow Statements continued

27 Apr – 1 May

9 Business Combinations not requiring group financial statements - accounting records of acquirer and acquire - concept of economic entity vs legal entity 27 April = ANZAC Day (no Monday lecture)

readings for weeks 9 onwards will be supplied on Blackboard group presentations

4 – 8 May 10 Accounting for Equity Investments - fair value and equity methods - concept of significant influence - goodwill / gain on bargain purchase

group presentations

11 – 15 May 11 Accounting for Equity Investments continued - introduction to consolidated financial statements - acquisition analysis - preparing a consolidated statement of financial position (a) immediately after acquisition (b) at a date subsequent to acquisition - introduction to non-controlling interest

final assessment of weekly exercises, and total tutorial marks determined

18 – 22 May 12 Accounting for Equity Investments continued

25 – 29 May 13 review week

Lectures end Friday 29 May 2015 University Exam Period First Semester Begins 30 May 2015

End 17 June 2015

Dishonest Practice and Plagiarism

Students should ensure that all submitted work is their own. Plagiarism is a form of dishonest practice (cheating). It is defined as copying or paraphrasing another’s work and presenting it as one’s own. Any student found responsible for dishonest practice in any piece of work submitted for assessment shall be subject to the University’s dishonest practice regulations, which may result in serious penalties, including forfeiture of marks for the piece of work submitted, a zero grade for the paper, or in extreme cases, exclusion from the University. The University of Otago reserves the right to use plagiarism detection tools.

Students are advised to inform themselves about University policies concerning dishonest practice and take up opportunities to improve their academic and information literacy. If necessary, seek advice from academic staff, or the Student Learning Centre. The guideline for students is available at this link: http://www.otago.ac.nz/study/plagiarism/

The Library resource on ethical use of information is available via this link: http://oil.otago.ac.nz/oil/module8.html

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Student Learning Support and Information

Student Charter

http://www.otago.ac.nz/about/otago005275.html

Guidelines for Learning at Otago

http://hedc.otago.ac.nz/hedc/wp-content/uploads/2012/12/Guidelines-for-Learning.pdf

http://hedc.otago.ac.nz/hedc/learning/

Student Learning Centre

The Student Learning Centre, which is part of the Higher Education Development Centre, provides learning support, free of charge, to ALL enrolled students. Their services include:

a workshop programme designed to help students to improve their learning strategies and their generic skills;

individual assistance with learning issues; on-line study skills advice; a student leadership programme a student-led peer support programme for students of all ages and backgrounds. conversational English groups for students from a non-English speaking background

The Centre also provides two very helpful study guides, “Guidelines for Writing and Editing” and “Writing University Assignments” and these are available on the SLC website. http://slc.otago.ac.nz/

Library Support

The Library website http://www.otago.ac.nz/library provides access to resources and services, including group room bookings, library hours and locations, past exam papers, subject guides, article databases and more.

If you need assistance either check out the self-help guides http://otago.libguides.com/selfhelp, or ask Library staff at the ground floor service desks, or email ask.library@otago.ac.nz

Māori Student Support

Tënā koutou katoa, Ko Corey Bragg töku ingoa Ko Ngāi Tahu, Kāti Mamoe, Waitaha me Ngāti Kahungunu öku iwi Kia ora, my name is Corey Bragg and I am the Māori student support person in the Business School. My role is to help link Māori students with the various support networks throughout the university and the community. Kaua e whakamā, don't be shy - come in for a chat. Mauri ora mai. Tel 479 5342 Email corey.bragg@otago.ac.nz Room CO 3.21

Nicola Beatson is the Kaiāwhina Māori in the Department of Accountancy and Finance Tel 479 8321 Email nicola.beatson@otago.ac.nz Room CO5.32

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Pacific Islands’ Student Academic Advisor

Warm Pacific Greetings

Talofa lava, my name is Esmay Eteuati and my role is to liaise with Academic Departments and Student Services relating to Pacific students’ and their course of study. I support both staff and students in the Business School and have a network of Pacific contacts in other Divisions around the University.

Tel +64 3 479 4756 Email: esmay.eteuati@otago.ac.nz

Disability Information and Support

Students are encouraged to seek support if they are having difficulty with their studies due to disability, temporary or permanent impairment, injury or chronic illness. It is important to seek help early, through one of the contacts below:

Dyna Seng

Tel 479 9072 Email dyna.seng@otago.ac.nz Room CO5.47

Student Feedback

We encourage your feedback. This can be in the form of contacting staff, participating in course evaluation surveys and communicating with class representatives. Continual improvements will be made to this course based in part on student feedback. Recent changes to this course as a result of constructive feedback include (insert summary of improvements)

Class Representatives

The class (or student) representative system is an avenue for encouraging communication and consultation between staff and students. It provides you with a vehicle for communicating your views on the teaching and delivery of the paper and provides staff with an opportunity to communicate information and gain constructive feedback from students. It contributes to the development of a sense of community within a department and it adds a further dimension to the range of support services offered to students.

Volunteers for the role of class representatives will be called early in the semester. The OUSA invites all class representatives to a training session, conducted by OUSA, about what it means to be a class representative and some of the possible procedures for dealing with issues that arise. They also provide information on the services that OUSA offers and the role OUSA can play in solving problems that may occur. The OUSA provides support to class representatives during the semester. Departmental staff will also meet with class representatives during the semester to discuss general issues or matters they wish to have considered.

Your class representative’s name and contact details will be posted on Blackboard early in the semester.

Concerns about the Course

We hope you will feel comfortable coming to talk to us if you have a concern about the course. The Course Co-ordinator will be happy to discuss any concerns you may have. Alternatively, you can

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report your concerns to the Class Representative who will follow up with departmental staff. If, after making approaches via these channels, you do not feel that your concerns have been addressed, there are University channels that may aid resolution. For further advice or more information on these, contact the departmental administrator or head of department.

Disclaimer

While every effort is made to ensure that the information contained in this document is accurate, it is subject to change. Changes will be notified in class and via Blackboard. Students are encouraged to check Blackboard regularly. It is the student’s responsibility to be informed.