financial reporting and analysis accounting 451-31&32 ... · acct 451-81 syllabus – spring...

ACCT 451-81 Syllabus – Spring 2019 1

Financial Reporting and Analysis Accounting 451-31&32, Spring 2019

Professor: Mark Finn E-mail: [email protected]: Global Hub 4451 Rooms: Global Hub Rm. TBAPhone: (847) 467-1635 Hours: Tue/Fri: 10:30am to noon (32)

1:30 -3:00pm (31)

Course description and objectives: The course will allow students to acquire the tools and general perspectives necessary to become reasonably sophisticated users of financial statements. This skillset is considered essential for careers in finance. However, it is also of paramount importance to many general managers, entrepreneurs, and board members, whose career trajectories inevitably require them to make decisions involving financial reporting and accounting-related governance.

The pedagogy will employ a combination of lectures, case discussions and analyses, numerical exercises, and independent readings. The cases used in the course will provide an opportunity to integrate the abstract tools learned and apply them in a practical context.

Course materials: The recommended (but not required) textbook for the course is “Financial Reporting and Analysis”, by Revsine, Collins, Johnson, Mittelstaedt and Soffer (6th Edition, McGraw-Hill Irwin, 2015) (referred to as “RCJMS” throughout the syllabus.) The cases are collected in a course packet available through Study.net. The syllabus and other materials, including marked-up lecture slides, handouts, assignments, and suggested solutions where available, will be posted on Canvas. The schedule shown on Canvas will serve as the master document, and I expect you to check it frequently for announcements, updates and revisions. All materials on the course website are for your personal use only and may not be distributed without my prior permission.

Course requirements: Eight Canvas-based weekly assignments (30% of the class grade). Online at-home midterm (25% of the class grade) In-class final examination; open-notes, open-book (35% of the class grade) The final 10% of the grade will be based on class participation, including responses to in-class questions in the PollEverywhere survey system. The early final exam option will be allowed for this class. This program is administered by Kellogg Students Affairs. Students wishing to take their early final exams the weekend before the

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official exam week may do so through that office. Students may work on the weekly assignments in teams of up to five students. However, every student will be responsible for submitting his or her own answers to the assignment questions in Canvas. A large portion of the two exams will be based on the assignments. Being a part of a well-functioning assignment team can be critical to your success in the class. Our weekly assignments will be long and hard, but will provide you with the tools that will be essential to your mastery of the course material. Initially, I will allow students to take the initiative in forming their own assignment teams. However, if problems arise – for instance, a particular student not being able to find a team – I reserve the right to intervene in the team formation process in whatever manner that I believe advances the educational interests of the class as a whole.

Kellogg Honor Code: http://www.kellogg.northwestern.edu/stu_aff/policies/honorcode.htm The student experience at Kellogg is unique because, among other reasons, students trust that their classmates will behave with honesty, integrity, and respect in all academic, professional, and social matters. Adherence to the Kellogg Honor Code plays a key role in engendering this trust. The Honor Code requires that a student not seek an unfair advantage over other students, for example, by not giving or receiving unauthorized aid during completion of academic requirements, by truthfully representing fact and self at all times, and by respecting the property and personal rights of all members of the Kellogg community. Students’ willingness to abide by this Code allows faculty and students to interact with a minimum of rules, regulations, and bureaucracy, which in turn allows us to focus on creating an engaging and challenging academic environment. In particular, you may not use any material from previous offerings or concurrent sections of the class in preparing material to be graded. For example, you may not look at answers to graded assignments from previous quarters, or ask students from other sections of the class in the current quarter to share solutions to graded assignments, cases, or exams. If you have questions about what falls within the bounds of honorable behavior, please ask.

Laptops, Cell Phones, etc. http://www.kellogg.northwestern.edu/stu_aff/policies/etiquette.htm Kellogg’s Code of Classroom Etiquette governs appropriate classroom behavior for the course. In particular, I expect students to be punctual arriving for class, to notify me in advance if you are going to miss a class, and not to engage in disruptive eating during class. Laptops can be used during class time only for course-related activities, such as note-taking or working out numerical problems. The use of laptops is only allowed for students sitting in the last row. Please switch off cell phones or put on silent mode, and put them away before the start of class.

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Course Outline, Accounting 451, Sections 31

WEEK 1 Apr 2 Apr 5

Introduction and Taxation Basics

Revsine Readings: Ch.13, 745-770 Revsine Problems: E13-1, E13-5, P13-1, P13-2, P13-4, P13-6.

Assignment 1 – Taxes, Pt. 1, due Apr. 12

WEEK 2 Apr 9 Apr 12

Revenue Recognition, Pt.1; Continuity Topics

Revsine Readings: Ch.2, 57-74; Ch.3, 123-157. Revsine Problems: P2-16, E3-16, P3-2, P3-11, P3-12, P3-16

Assignment 2 – Revenue Recognition, due Apr. 19

WEEK 3 Apr 16 Apr 19

Share-based Compensation; Non-GAAP Metrics; EPS

Revsine Readings: Ch.15. 904-923 Revsine Problems: P15-15, C15-1

Assignment 3 – Share-based Compensation, due Apr. 26

WEEK 4 Apr 23 Apr 26

Intangible Assets; US GAAP vs. IFRS

Revsine Readings: Ch.10, 555-558 & 578-580. Revsine Problems: P10-15, P10-16

Assignment 4 – Intangibles and IFRS, due Feb 4

At-home timed two-hour midterm examination, released April 27, due by May 7

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WEEK 5 Apr 30 May 3

M&A and Investments with Significant Influence

Revsine Readings: Ch.16, 961-1004. Revsine Problems: E16-4, E16-5, E16-7, E16-8, P16-1 P16-11, P16-14.

Assignment 5 – Majority Investments and the Equity Method, due May 14

WEEK 6 May 7 May 10

Fair Value Accounting; Asset Impairments; Restructuring Charges

Revsine Readings: Ch.10, 558-561 & 576-581; Ch.16, 954-960. Revsine Problems: P10-11, P10-21, P10-22, P16-2, P16-13

Assignment 6 – Fair Value, Impairment, and Restructuring, due May 21

WEEK 7 May 14 May 17

Earnings Quality and Misc. Operating Expenses

Revsine Readings: Review Ch. 8-10 to review earnings management angles of receivables, inventory, depreciation.

Assignment 7 – Earnings Quality, due May 28


Liabilities: Asset Retirement Obligations, Contingent Liabilities, and Leases Revsine Readings: Ch.12, 690-706 & 724-729 Revsine Problems: E12-13, E12-14, P12-5, P12-13, P12-15

Assignment 8 – AROs, Contingent Liabilities, Leases, due Jun 4


Retirement Plans

Revsine Readings: Ch.14 Revsine Problems: E14-1, E14-2, E14-3, E14-16, E14-19, P14-1, P14-9, P14-10.

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WEEK 10 Jun 4 Jun 7

Miscellaneous wrap-up topics, including areas of revenue and expense recognition and taxation not previously covered.

Wrap-up and final exam review

In-class three-hour final examination administered by Student Affairs during Jun 8-11

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financial reporting and analysis accounting 451-31&32 ... · acct 451-81 syllabus – spring...

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