AC 503 Topic Outline

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Course No. :

AC 503

Course Title : Financial Accounting and Reporting Part I

Credit Units : 6

TOPICS Student Learning Outcomes

(Expected Course Competencies)

Course Orientation (3 hours)

USC Mission Statement

School of Business and Economics and Department of Accountancy aims

Duties and responsibilities of a student

Discussion of final requirements and grading systems

Expectations about the subject and from the teacher

Review of Basic Accounting Concepts

Definition of Accounting

Purpose and Function of Accounting

Uses of Accounting Information

Branches of Accounting

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to accounting in general.

Overview of Financial Accounting (3 hours)

Definition of Financial Accounting

Purpose and Function of Financial Accounting

Uses and Limitations of Financial Accounting Information

Philippine Financial Reporting Standards

Standard Setting Bodies

Application of IFRS and PFRS

Harmonization of Accounting

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to financial accounting.

2. Reflect on the applicability of IFRS in the Philippine setting. 3. Render an opinion on the on-going harmonization effort of accounting

principles.

Preparation and Presentation of Financial Statements (6 hours)

Purpose, Status and Scope of General Purpose Financial Statements

Underlying Assumptions

1. Identify, enumerate, classify and define the fundamental standards,

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Qualitative Characteristics and Con-straints of Accounting Information

Elements of Financial Statements Definition, Recognition and Measure-ment

Capital and Capital Maintenance

Statement of Comprehensive Income

Income Statement

Statement of Financial Position

concepts, principles and theories related to the framework and general

purpose financial statements and its elements.

2. Apply the principles of the Philippine Financial Reporting Standards in the preparation and presentation of financial statements.

3. Solve problems involving the recog-nition and measurement of the elements of financial statements.

4. Prepare a statement of comprehensive income, income statement and statement of financial position in accordance with PFRS.

Financial Instruments: Cash and Cash Equivalents (6 hours)

Definition and Recognition

Initial and Subsequent Measurement

Cash Management and Control

Bank Reconciliation

Petty Cash Fund

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to cash and cash equivalents

and cash control and management.

2. Apply the principles of the Philippine Financial Reporting Standards in the recognition and measurement of cash and cash equivalents.

3. Solve problems involving the recog-nition, measurement, management and control of cash and cash equivalents.

4. Prepare journal entries involving the recognition, measurement and mana-gement of cash and cash equivalents.

Financial Instruments: Overview (12 hours)

Applicable Standards: PFRS 9, PAS 39 (to be replaced) and PAS 32

Definition of Terms and Scope

Classification

Financial Instruments: Receivables and Payables

Definition of Terms

Classification and Presentation

Accounts Receivable and Payable: Initial and Subsequent Measurement

Doubtful Accounts Estimation

Notes Receivable and Payable: Initial and Subsequent Measurement

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to financial instruments in

general, accounts, notes and loan receivables and payables, receivable

financing and debt restructuring.

2. Apply the principles of the Philippine Financial Reporting Standards in the initial and subsequent measurement and derecognition of

accounts, notes and loans receivables and payables.

3. Solve problems involving the initial and subsequent measurement and derecognition of accounts, notes and loans receivables and payables,

receivable financing and debt restructuring.

4. Prepare journal entries involving the initial and subsequent

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Loans Receivable and Payable: Initial and Subsequent Measurement

Receivable Financing

Debt Restructuring

measurement and derecognition of accounts, notes and loans

receivable, receivable financing and debt restructuring.

Financial Instruments: Financial Assets at Fair Value (6 hours)

Debt and Equity Instruments

Trading Securities


Irrevocable Election of Presenting Gains and Losses in Other Comprehensive Income

Reclassification

1. Apply the principles of the Philippine Financial Reporting Standards in the initial and subsequent measurement and derecognition of

financial assets measured at fair value.

2. Solve problems involving the initial and subsequent measurement and derecognition of financial assets measured at fair value.

3. Prepare journal entries involving fi-nancial assets measured at fair value.

Financial Instruments: Financial Assets at Amortized Cost (12 hours)

Definition of Terms: Investment in Bonds and Bonds Payable

Initial Measurement

Subsequent Measurement: Straight Line Amortization

Subsequent Measurement: Bond Outstanding Amortization

Subsequent Measurement: Effective Interest Amortization

Computation of Market Price

Computation of Effective Rate

Sale of Bond Investments

Retirement of Bonds: At Maturity Date

Retirement of Bonds: Before Maturity Date

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to financial assets at

amortized cost and bonds.

2. Apply the principles of the Philippine Financial Reporting Standards in the recognition, initial and subsequent measurement and

derecognition of financial assets at amortized cost and bonds.

3. Solve problems involving financial assets at amortized cost and bonds. 4. Prepare journal entries involving financial assets at amortized cost and

bonds.

Financial Instruments: Investment in Equity Securities and

Shareholders Equity (18 hours)

Definition of Terms


Share Capital, Share Premium and Subscriptions

Dividends: Cash, Property, Liability and Stock

Share Split and Stock Rights

Donation of Capital

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to investment in equity

securities and shareholders equity. 2. Apply the principles of the Philippine Financial Reporting Standards

in the recognition, measurement, classifi-cation, presentation and

derecog-nition of investment in equity securities and shareholders

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Redeemable, Convertible and Shares with Share Warrants

Treasury Shares

Appropriation of Retained Earnings

Statement of Retained Earnings

Statement of Changes in Shareholders Equity

Recapitalization and Quasi-Reorgani-zation

equity.

3. Solve problems involving investment in equity securities and shareholders equity.

4. Prepare journal entries involving investment in equity securities and shareholders equity.

5. Prepare a statement of retained earnings and statement of changes in shareholders equity in accordance with PFRS.

Financial Instruments: Investment in Associates (6 hours)

Definition of Terms

Recognition Principles

Initial and Subsequent Measurement: Equity Method

Investment Income

Impairment Loss

Upstream & Downstream Transactions

Alternative Measurement: Cost Method

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to investment in associates.

2. Apply the principles of the Philippine Financial Reporting Standards in the recognition, measurement, classifi-cation, presentation and

derecog-nition of investment in associates.

3. Solve problems involving investment in associates. 4. Prepare journal entries involving investment in associates.

Compound Financial Instruments (6 hours)

Definition of Terms: Bonds Payable with Share Warrants and Convertible Bonds



Payment Before and At Maturity

Disclosures

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to compound financial

instruments.

2. Apply the principles of the Philippine Financial Reporting Standards in the recognition, measurement and derecognition of compound

financial instruments.

3. Solve problems involving compound financial instruments. 4. Prepare journal entries involving compound financial instruments.

Derivatives (6 hours)

Definition of Terms



Hedging Instrument and Hedged Item

Cash Flow Hedge

Fair Value Hedge

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to derivatives.

2. Apply the principles of the Philippine Financial Reporting Standards in the recognition, classification, measure-ment and derecognition of

deriva-tives.

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Interest Rate Swap

Forward Contract

Futures Contract

Call and Put Options

Embedded Derivatives

Derecognition

Disclosures

3. Solve problems involving derivatives. 4. Prepare journal entries involving derivatives.

Fund and Other Investments (3 hours)

Definition of Terms

Accounting for Sinking Fund

Accounting for Preference Share Redemption Fund

Accounting for Fund for Property Acquisition

Accounting for Contingency Fund

Accounting for Insurance Fund

Cash Surrender Value

1. Identify, enumerate, classify and define the fundamental standards, concepts, principles and theories related to the different fund

investments.

2. Apply the principles of the Philippine Financial Reporting Standards in the recognition, classification, measure-ment and derecognition of

the different fund investments.

3. Solve problems involving the different fund investments. 4. Prepare journal entries involving the different fund investments.

Financial Statement Construction and Appreciation (3 hours)

Comprehensive Summary

Statement of Financial Position Asset, Liability and Equity Side of Financial Instruments

Income Statement

Statement of Changes in Shareholders Equity

Notes to Financial Statements

Other Contemporary Topics

1. Prepare a statement of financial position in accordance with the applicable PFRS studied during the course.

2. Prepare an income statement in accordance with the applicable PFRS studied during the course.

3. Prepare a statement of changes in shareholders equity in accordance with PFRS.

4. Prepare the necessary notes to financial statements, including account analyses and disclosure requirements.

5. Reflect on the application and developments of Philippine financial statements in light of PFRS.

Documents

AC 503 Topic Outline