� ��

THE CHINESE UNIVERSITY OF HONG KONG

SCHOOL OF ACCOUNTANCY

ACCT 4111 ADVANCED FINANCIAL ACCOUNTING

SESSIONS A AND B (FIRST SEMESTER, 2014 - 2015)

LECTURER Mr. Eric LEUNG Office: Room 1039, 10/F., Cheng Yu Tung Building (CYT) Phone: 3943-1693 E-mail: eric_leung@cuhk.edu.hk Office hour: Friday 11:30 – 13:15; or by appointment

TEACHING ASSISTANT Miss TSANG Pui Ki Office: Room 1049, 10/F., Cheng Yu Tung Building (CYT) Phone: 3943-7644 E-mail: adatsang@ baf.cuhk.edu.hk COURSE OBJECTIVES This course is a continuation of financial reporting and deals with the more advanced aspects of financial accounting. The course assumes knowledge acquired in previous financial reporting courses and thereby focuses on the exploration of the core technical capabilities to prepare and analyse financial reports for combined entities which takes the subject into greater depth and contextualises the role of accountant as a professional financial adviser by examining the group reporting requirements as well as the rationales behind various accounting principles and standards relating to group reporting. This course attempts to investigate issues relating to group reporting and therefore includes such topics as business combinations, consolidations of subsidiaries, intragroup transactions and foreign currency translations. Special problems in the consolidation of corporate financial statements will also be covered in the course. The objectives of the course are to: (1) introduce the working knowledge of business combinations and group reporting under the

international accounting context and the Hong Kong accounting reporting environment; (2) equip students with the ability to prepare financial statements of groups of entities in accordance

with relevant accounting standards; (3) strengthen students’ ability to apply accounting and financial reporting knowledge in business

decision-making; (4) equip students with a global perspective associated with accounting; (5) strengthen students’ written communication skills by providing professional advices to solve

problems relating to group accounting.

Prerequisite: ACCT 3112 Financial Reporting II

� ��

COURSE LEARNING OUTCOMES (CLO) After completing this course, students should be able to: (CLO 1) understand the financial reporting requirements of business combinations and group

reporting under the international accounting context and the Hong Kong accounting reporting environment;

(CLO 2) compile group financial statements in accordance with relevant accounting standards; (CLO 3) apply accounting and financial reporting knowledge, in particular group reporting issues, in

business decision-making; (CLO 4) demonstrate an understanding of business and accounting issues from a global perspective,

in particular entities with overseas operations; (CLO 5) demonstrate effective written communication skills. The following table shows an alignment of the above course learning outcomes (CLO) with the PACC programme learning outcomes (LO):

LO CLO (LO 1) Have effective communication skills needed by accounting professionals. CLO 5 (LO 2) Be able to master the accounting knowledge. CLO 1 & 2 (LO 3) Be able to analyse and solve business problems using accounting, financial

and other business information. CLO 3

(LO 4) Have a global perspective associated with accounting. CLO 4 (LO 5) Be aware of the ethical issues in relation to business and accounting practices. CLO 3 LEARNING ACTIVITIES To ensure that students are able to develop and achieve the above outcomes, the course is structured with the following learning activities: (1) Lectures

A weekly three-hour lecture is scheduled. During the lecture, fundamental concepts relating to a specific topic relating to group accounting (see the section headed “List of Topics and Class Schedule” below) will be delivered by teacher. (Major focus: CLO 1, 2, 3, 4)

(2) In-class discussion Several case problems will be distributed in class. Students are expected to discuss within their own groups to come up with the solutions. This not only facilitates the application of the concepts discussed in lectures but also assists students to get prepared for their examinations. (Major focus: CLO 1, 2, 3)

(3) Self-reading Reading is critical in the course. Relevant reading materials will be stipulated in the weekly lecture notes. Students are expected to read the relevant materials and do their own readings after class to further consolidate their understanding of the topic. (Major focus: CLO 2, 3, 4)

(4) Practice problems A number of additional practice problems will be regularly posted on the eLearning platform for students’ practice. Knowledge in financial reporting can partially be polished through practicing. Students are expected to discuss among themselves on the practice problems. Check figures will be posted on the eLearning platform for students’ reference. (Major focus: CLO 2, 3, 4)

(5) Case studies Two case studies consisting of problems and report writing will be distributed to students throughout the semester. Students are expected to (1) analyse and solve business problems in an accounting context and (2) work on their own pace to check whether they are able to tackle the

� ��

selected problems. Solutions will be posted on the eLearning platform after submission of case studies. (Major focus: CLO 1, 2, 3, 5)

Lectures and In-class

discussion Self-reading Case studies Practice problems

In-class Out of class Out of class Out of class 3 hours / week 6 hours / week 1 – 2 hours / week 1 – 2 hours / week

Mandatory Mandatory Mandatory Mandatory

COURSE ASSESSMENT Course grade will be based on the following elements:

Test 30% Comprehensive case examination 50%

Case studies 20% Total 100%

LEARNING RESOURCES FOR STUDENTS Picker, Leo, Loftus, Wise, Clark and Alfredson, Applying Financial Reporting Standards, Wiley, 3rd edition, 2012. Tan, Lim and Lee, Advanced Financial Accounting – An IAS and IFRS Approach, McGraw Hill, 2nd edition, 2014. Students may refer to the following materials for reference: Relevant Hong Kong Accounting Standards and Financial Reporting Standards issued by the HKICPA, accessible online via the HKICPA website: http://www.hkicpa.org.hk Ernst & Young, International GAAP 2014 – Generally Accepted Accounting Practice Under International Financial Reporting Standards, Wiley, 2014. TEST AND EXAMINATION A mid-term test (closed-book) is scheduled on 24 October 2014 (Friday) and will cover topics discussed from Weeks 1 to 6. The mid-term test will start at 6:40 p.m. and last for 2 hours and 15 minutes. Details of the mid-term test will be announced in class. A comprehensive case examination (closed-book) will be arranged by the University and will be conducted during the centralised examination period. The final examination will last for 3 hours. Details of final examination will be announced in class. CASE STUDIES Students will be given two case studies throughout the course and they are strongly advised to complete the case studies individually. This is an effective means in letting students and teacher know whether the concepts delivered during the lectures are properly mastered.

� ��

COURSE ANNOUNCEMENTS Lecture materials and announcements will be posted on the eLearning platform: https://elearn.cuhk.edu.hk/webapps/portal/frameset.jsp POLICY ON SCHOLASTIC DISHONESTY The Chinese University of Hong Kong places very high importance on honesty in academic work submitted by students, and adopts a policy of zero tolerance on cheating and plagiarism. Any related offence will lead to disciplinary action including termination of studies at the University. Attention is drawn to University policy and regulations on honesty in academic work, and to the disciplinary guidelines and procedures applicable to breaches of such policy and regulations. Details may be found at: http://www.cuhk.edu.hk/policy/academichonesty/. FEEDBACK FOR EVALUATION Students are encouraged to provide feedback on the course. Feedback can be sent to the instructor through either email or message system in the eLearning platform at any time or made an appointment with the instructor. Formal teaching evaluation exercise will also be performed at the end of the semester.

�

LIST OF TOPICS AND CLASS SCHEDULE

Week Session

A (F1-3)

Session B

(M1-3) Topics Readings

1 5-Sept 4-Sept

LT7 (18:30)

Business Combinations I: Basic Concepts Wiley Chapter 14;

McGraw Hill Chapter 3

2 12-Sept 8-Sept Business Combinations II: Advanced Applications for HKFRS

3 (Revised) Wiley Chapter 14;

McGraw Hill Chapter 3

3 19-Sept 15-Sept Business Combinations III: Special Topics on HKFRS 3 (Revised)

Group Reporting I: Control Concepts (HKFRS 10) Wiley Chapter 23

McGraw Hill Chapter 5

4 26-Sept 22-Sept Group Reporting II: Consolidation Method and Wholly-owned Subsidiary (Part 1)

Wiley Chapters 23 and 24; McGraw Hill Chapters 3, 4 and 5

5 29-Sept CYT LT1

(18:30)

29-Sept CYT LT1

(18:30)

Group Reporting II: Consolidation Method and Wholly-owned Subsidiary (Part 2)

Wiley Chapters 23 and 24; McGraw Hill Chapters 3, 4 and 5

6 10-Oct 6-Oct Group Reporting III: Non-controlling Interests Wiley Chapter 26;

McGraw Hill Chapters 3, 4 and 5

7 17-Oct 13-Oct AIT G03

(18:30) Group Reporting IV: Intra-group Transactions

Wiley Chapter 25; McGraw Hill Chapters 3, 4 and 5

8 24-Oct 20-Oct Investments in Associates I

Wiley Chapter 29; McGraw Hill Chapter 6

24-Oct Midterm Examination LSB LT1 (Up to Non-controlling Interests)

9 31-Oct 27-Oct Investments in Associates II Wiley Chapter 29;

McGraw Hill Chapter 6

10 7-Nov 3-Nov Foreign Currency Transactions Wiley Chapter 28;

McGraw Hill Chapter 8

11 14-Nov 10-Nov Group Reporting V: Foreign Subsidiary Translation Wiley Chapter 28;

McGraw Hill Chapter 8

12 21-Nov 17-Nov Group Reporting VI: Foreign Subsidiary Consolidation Wiley Chapter 28; McGraw Hill Chapter 8

13 28-Nov 24-Nov Group Reporting VII: Changes in Ownership Structure

Joint Arrangements Wiley Chapter 27; McGraw Hill Chapter 7

Wiley Chapter 30 The class schedule is subject to changes. The reading lists are not exhaustive. Additional readings may be assigned for reference throughout the semester.