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FAR EASTERN UNIVERSITY

Manila

Institute of Accounts, Business and Finance

COURSE SYLLABUS

|Course Code |: |FIN ACT 1 |

| | | |

|Course Title |: |Financial Accounting and Reporting, Part I |

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|Course Pre-requisite |: |FND ACT 2 – Fundamentals of Accounting , Part II |

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|Course Credit |: |Six (6) units |

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|Course Description |: |This course introduces the nature, functions, scope and limitations of the broad field of accounting theory. It deals with the study of the theoretical accounting framework objectives|

| | |of financial statements, accounting conventions, and generally accepted accounting principles, standard setting process for accounting practice, national as well as international |

| | |principles relating to the preparation and presentation of financial statements, the conditions under which they may be appropriately applied, their impact or effect on the financial |

| | |statements; and the criticisms commonly leveled against them. The course covers the detailed discussion, appreciation, and application of accounting principles covering the assets, |

| | |financial and nonfinancial. Emphasis is given on the interpretation and application of theories of accounting in relation to cash, temporary investments, receivables, inventories, |

| | |prepayments, long term investments, property, plant and equipment, intangibles, and other assets, including financial statement presentation and disclosure requirements. The related |

| | |internal control, ethical issues, and management of assets are also covered. Exposure to computerized system in receivables, inventory, and lapsing schedules is a requirement in this |

| | |course. |

| | | |

|General Course Objectives |: |At the end of the course, the student is expected to be able to obtain a comprehensive knowledge and understanding on selected pronouncements of the Accounting Standards Council (ASC)|

| | |as embodied in the PAS and principles underlying measurement, valuation and presentation and disclosure of ASSETS. |

COURSE CONTENT

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|1 |At the end of the session, the student is expected to understand: |1. Overview of the course |Planning and Organizing |1. Expectation setting for both |Teamwork |1. Seat Plan |

| |Know the requirements for completing the course successfully; |2. Administrative matters |Understanding |students and professor; |Cooperation |2. Summarized student |

| |Articulating his/her own expectation from the course and the professor |3. Concepts and principles | |2. Formulation of the seat plan | |expectation sheet |

| |Nature, principles and scope of accounting |relating to the preparation and | |3. Lectures | |3. Quiz |

| |Nature, principles and objectives of financial and related records of an |presentation of Financial | |4. Assignments | | |

| |organization |Statements. | | | | |

| |The nature, role and significance of accounting theories and principles | | | | | |

| |Principles of conceptual framework of accounting | | | | | |

| |Philippine financial reporting standards/Philippine accounting standards | | | | | |

| |The concept and role of the true and fair presentation of financial | | | | | |

| |statements | | | | | |

|2 |At the end of the session, the student is expected to understand: |Financial Reporting Standards |Judgment |1. Lectures |Flexibility |1. Quiz |

| | |Council and Conceptual Framework |Understanding |2. Assignments | | |

| |Financial Reporting standards Council (Creation, objectives and |for the Preparation and | | | | |

| |functions; Membership/composition; Standard setting process) |Presentation of Financial | | | | |

| | |Statements | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

| |The IASB, history, current structure and processes, globalization of | | | | | |

| |capital markets, calls for the harmonization of accounting standards, | | | | | |

| |formation and achievements of the IASC | | | | | |

|3 |At the end of the session, the student is expected to understand: |Conceptual Framework for the |Judgment |1. Lectures |Flexibility |1. Preparation of Financial |

| | |Preparation and Presentation of |Understanding |2. Assignments |Creativity |Statements |

| |Users and their information needs |Financial Statements |Presentation Skills | |Accountability |2. Quiz |

| |Objective of financial statements | | | | | |

| |Underlying assumptions in the preparation of financial statements | | | | | |

| |Qualitative characteristics of financial statements (Understandability, | | | | | |

| |Relevance, Reliability, Comparability) | | | | | |

| |Principles of Recognition and Measurement (Measurement basis) | | | | | |

| |Elements of financial statements and their definition (Assets, | | | | | |

| |Liabilities, Equity, Income, Expenses) | | | | | |

| |Recognition and measurement of the elements of financial statements | | | | | |

| |Concepts of capital and capital maintenance ( Financial concept, Physical| | | | | |

| |concept) | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|4 |At the end of the session, the student is expected to understand: |Introduction to Financial |Understanding |1. Lectures |Accountability |1. Quiz |

| | |Instruments |Analytical Ability |2. Assignments |Flexibility |2. Internet works |

| |Definition of financial instruments [ Financial assets: nature and | |Decision Making Skills | |Patience | |

| |examples, Financial liabilities: nature and examples, Equity instruments:| | | | | |

| |nature and examples ( Distinction between equity and financial | | | | | |

| |liabilities), Compound financial instruments] | | | | | |

| |Categories of financial assets/financial liabilities | | | | | |

| |Financial assets covered by Pas 32 & 39 | | | | | |

| |Other financial assets excluded from the scope of Pas 39 and addressed | | | | | |

| |under other PFRS | | | | | |

| |Approach in accounting for financial instruments | | | | | |

| |Nonfinancial assets/nonfinancial liabilities: nature and examples | | | | | |

|5 |At the end of the session, the student is expected to understand: | |Analytical Ability |1. Lectures |Honesty |1. Preparation of Bank |

| |Definition, nature and composition of cash and cash equivalents |Accounting for Cash |Problem Solving Skills |2. Illustrative problems |Integrity |Reconciliation |

| |Recognition and measurement of cash | |Presentation Skills |3. Board work |Fairness |2. Quiz |

| |Management and control of cash (Accounting of petty cash fund, Bank | | |4. Assignment |Accountability | |

| |reconciliation at a single date) | | | | | |

| |Financial statement valuation, presentation and disclosure | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|6 |First Preliminary Examination |

|7 |At the end of the session, the student is expected to understand: |Accounting for Receivables |Analytical Ability |1. Lectures |Honesty |1. Quiz |

| | | |Problem Solving Skills |2. Illustrative problems |Integrity | |

| |Definition, nature and classification of receivables | |Presentation Skills |3. Board work |Fairness | |

| |Accounting for receivables [Recognition, Initial and subsequent | | |4. Assignment |Accountability | |

| |measurement, Impairment and uncollectible of receivables (Assessment and | | | | | |

| |recording of impairment loss, Reversal or recovery of impairment loss), | | | | | |

| |De-recognition, Generating cash from receivables] | | | | | |

| |Accounting for notes/loans receivable (Definition and types of promissory| | | | | |

| |notes, Recognition, Initial Measurement and valuation at present value) | | | | | |

|8 |Receivable financing arrangements [Accounts Receivable, Pledging (general|Accounting for Receivables |Analytical Ability |1. Answering assignments |Honesty |1. Quiz |

| |assignment of receivables), Factoring, Assignment of specific |(cont’d) |Problem Solving Skills |2. Lectures |Integrity |2. Case Study |

| |receivable]: Notes receivable (Discounting)] | |Presentation Skills |3. Board work |Fairness | |

| |Notes/loans receivable impairment and un-collectibility | | |4. Giving assignment |Accountability | |

| |Financial statement presentation and disclosure | | | | | |

| |Internal control measures for receivable | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|9 |At the end of the session, the student is expected to understand: |Accounting for Investments in |Analytical Ability |1. Answering assignments |Honesty |1. Internet works |

| | |Equity and Debt Instruments |Problem Solving Skills |2. Lectures |Integrity |2. Quiz |

| |Investment in equity instruments covered by Pas 32 and 39 [Investment in |including basic concepts on |Presentation Skills |3. Board work |Fairness | |

| |marketable equity securities (designated at fair value through profit or |Derivatives (covered by Pas 32 | |4. Giving assignment |Accountability | |

| |loss, Trading, available for sale), Investment in unquoted equity |and 39) | | | | |

| |securities] | | | | | |

| |Investment in debt instruments [Held-to-maturity investments, not | | | | | |

| |held-to-maturity (Trading, Available-for-sale)] | | | | | |

|10 |At the end of the session, the student is expected to understand: |Accounting for Inventories |Analytical Ability |1. Lectures |Honesty |1. Quiz |

| | | |Problem Solving Skills |2. Illustrative problems |Integrity |2. Internet works |

| |Definition, nature and classes of inventories | |Presentation Skills |3. Board work |Fairness | |

| |Recognition | | |4. Assignment |Accountability | |

| |Initial measurement at cost | | | |Commitment | |

| |Inventory recording systems (Periodic inventory system, Perpetual | | | | | |

| |inventory system) | | | | | |

| |Inventory costing methods (Items not ordinarily interchangeable: Specific| | | | | |

| |identification; For items that are interchangeable: First in, First out | | | | | |

| |method, Weighted average cost method) | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|11 |Inventory estimation methods [Gross profit method, Retail inventory |Accounting for Inventories |Analytical Ability |1. Answering assignments |Honesty |1. Quiz |

| |method (excluding peso value and retail info)] |(cont’d) |Problem Solving Skills |2. Lectures |Integrity | |

| |Valuation at lower of cost and net realizable value (Write down to net | |Presentation Skills |3. Board work |Fairness | |

| |realizable value, Reversal of write-down) | | |4. Giving assignment |Accountability | |

| |Other inventory issues (Purchase commitment, Inventory valued at selling | | | |Commitment | |

| |price, Use of more than one cost method, Borrowing costs, Lump-sum | | | | | |

| |acquisition, Inventory errors) | | | | | |

| |Financial statement presentation and disclosures | | | | | |

| |Internal control and management of inventory | | | | | |

| | | | | | | |

|12 |Second Preliminary Examination |

|13 |At the end of the session, the student is expected to understand: |Accounting for agricultural |Analytical Ability |1. Lectures |Honesty |1. Quiz |

| | |activities and biological assets |Problem Solving Skills |2. Illustrative problems |Integrity |2. Case Study |

| |Definition, nature and classes | |Presentation Skills |3. Board work |Fairness | |

| |Recognition | | |4. Assignment |Accountability | |

| |Initial measurement at cost | | | |Innovation | |

| |Valuation at lower of cost and net realizable value (Write-down to net | | | | | |

| |realizable value, Reversal of write-down) | | | | | |

| |Financial statement presentation and disclosures | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|14 |At the end of the session, the student is expected to understand: |Accounting for Property, Plant |Analytical Ability |1. Lectures |Honesty |1. Quiz |

| | |and Equipment |Problem Solving Skills |2. Illustrative problems |Integrity | |

| |Definition, nature and classes | |Presentation Skills |3. Board work |Fairness | |

| |Recognition | | |4. Assignment |Accountability | |

| |Initial measurement (Cash purchase, Purchase on a deferred payment | | | |Innovation | |

| |contract, Issuance of securities, Donation or discovery, | | | | | |

| |Self-construction, Exchanges of non-monetary and monetary assets) | | | | | |

| |Expenditures subsequent to acquisition | | | | | |

| |Valuation or measurement subsequent to initial recognition (Benchmark | | | | | |

| |method- cost less accumulated depreciation and accumulated impairment | | | | | |

| |losses; allowed alternative method- revaluation at fair value less | | | | | |

| |accumulated depreciation and accumulated impairment losses | | | | | |

| |Depreciation of assets (Definition, nature and causes; Factors affecting | | | | | |

| |depreciation; methods of depreciation ( Straight-line method, Declining | | | | | |

| |balance method, Sum-of-the-years digits method, Group and composite | | | | | |

| |depreciation) | | | | | |

| |Depletion of wasting assets | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

|15 |Accounting changes affecting depreciation |Accounting for Property, Plant |Analytical Ability |1. Answering assignments |Honesty |1. Quiz |

| |Revaluation of property, plant and equipment (Recording on date of |and Equipment (cont’d) |Problem Solving Skills |2. Lectures |Integrity |2. Case Study |

| |revaluation, Frequency of revaluation, Revaluation increase, Revaluation | |Presentation Skills |3. Board work |Fairness | |

| |decrease, realized revaluation) | | |4. Giving assignment |Accountability | |

| |Impairment of assets (Definition, when to recognize and how to measure | | | |Innovation | |

| |impairment loss, measurement of recoverable amount, impairment loss for | | | | | |

| |an individual asset, Impairment loss for cash-generating unit, Reversal | | | | | |

| |of previously recognized impairment loss) | | | | | |

| |Retirement and disposals | | | | | |

| |Financial statement presentation and disclosures | | | | | |

| |Internal control and management of property, plant and equipment | | | | | |

|16 |At the end of the session, the student is expected to understand: |Accounting for Intangible Assets |Analytical Ability |1. Lectures |Honesty |1. Quiz |

| | | |Problem Solving Skills |2. Illustrative problems |Integrity |2. Internet works |

| |Definition, nature and classes | |Presentation Skills |3. Board work |Fairness | |

| |Recognition criteria | | |4. Assignment |Accountability | |

| |Initial measurement and accounting for intangibles (Patents, Copyright, | | | |Innovation | |

| |Trademarks and trade names, Franchise rights, Lease rights, Computer | | | |Transparency | |

| |software, goodwill, Research and development costs, Other intangible | | | | | |

| |assets) | | | | | |

|Week |Learning Objectives |Focal Points/Topics |Competencies |Teaching Strategies |Values |Evaluative Measures |

| |Subsequently incurred costs | | | | | |

| |Measurement subsequent to initial recognition (Cost method, Revaluation | | | | | |

| |method) | | | | | |

| |Amortization | | | | | |

| |Impairment of value of intangible assets | | | | | |

| |Reversal of impairment loss | | | | | |

| |Retirements and disposition | | | | | |

| |Financial statement presentation and disclosures | | | | | |

| |Internal control measures for intangibles | | | | | |

|17 |At the end of the session, the student is expected to understand: |1. Accounting for Other Types of |Analytical Ability |1. Lectures |Honesty |1. Quiz |

| | |Investments |Problem Solving Skills |2. Illustrative problems |Integrity | |

| |Investment in cash surrender value of life insurance | |Presentation Skills |3. Board work |Fairness | |

| |Investment in funds | | |4. Assignment |Accountability | |

| |Investment property | | | |Innovation | |

| |Interest in joint ventures* | | | |Transparency | |

| |Interest in associates* | | | | | |

| |Investment in subsidiary* | | | | | |

| | |2. Accounting for Noncurrent | | | | |

| |*Detailed discussion covered in Advanced Accounting subjects |Assets Held for sale | | | | |

|18 |Final Examination |

Textbook:

Financial Accounting Volume 1 by Conrado Valix and Jose Peralta, 2008

References:

Books:

• Financial accounting : tools for business decision making. Kimmel, Paul. 2010

• Financial accounting : a global approach. Monger, Rod. 2010

• Financial accounting : volume two. Valix, Conrado T. 2010

• Financial accounting. Vol 1. Valix, Conrado T. 2010

• Financial accounting : volume three. Valix, Conrado T. Valix, 2009

• Financial accounting. Albrecht, W. Steve. 2008

• Financial accounting : a business process approach. Reimers, Jane L. 2008

• Financial accounting. Harrison, Walter T. 2008

• Financial accounting. Williams, Jan R. 2008

• Financial accounting and reporting. Whittington, O. Ray. 2008

• Financial accounting and reporting. Elliott, Barry. 2008

• Financial accounting. Needles, Belverd E. 2007

• Financial accounting : a user perspective. Albright, Thomas L. 2007

• Financial accounting. Libby, Robert. 2007

• Financial accounting : instructors solutions manual. Needles, Belverd E. 2007

• Financial accounting. Vol. 2. Valix, Conrado T. 2007

• Financial accounting. Harrison, Walter T. 2006

• Financial accounting : ann introduction. Peirson, Graham. 2006

• Financial accounting : reporting & analysis. Stice, Earl K.

• Financial accounting. Britton, Anne. 2006

• Financial accounting and reporting. Whittington, O. Ray. 2006

• Financial accounting in an economic context. Pratt, Jamie. 2006

• Financial accounting, reporting and analysis. Elliott, Barry. 2006

Journal, Newspaper and Magazines:

• Accounting Times, PICPA

• IAS PLUS Newsletter, Deloitte and Touche

• Global Eye on IFRS, Ernst and Young

• Business World

• Harvard Business Review

Online/URL:

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Computation of Grades:

Computation of Periodic Grades

Class Standing

Average Quizzes (AQ)………………………………………………….…….30%

Class Participation (CP) ………………………………………………...…...10%

Major Examination (PEx/MEx/FEx) ………………………………………….……..60%

Total …………………………………………………………………….…………….100%

a. Determine 1st Preliminary Grade (1st PG)

1st PG = AQ(30%) + CP (10%) + PEx (60%)

b. Determine 2nd Preliminary Grade (2nd PG) and Midterm Grade (MG)

2nd PG = AQ(30%) + CP (10%) + PEx (60%)

MG = 1st PG (50%) + 2nd PG (50%)

c. Determine Final Period (FP) and Final Grade (FG)

FP = AQ(30%) + CP (10%) + PEx (60%)

FG = MG (50%) + FP (50%)

Passing Grade is 75% with an equivalent point of 3.0

|Grade Point System |

| | | | |

|Grade |Point System |Descriptive |

| | |Equivalent |

|95 |100% |1.00 |Superior |

|92 |94% |1.25 | |

|90 |91% |1.50 |Very Good |

|88 |89% |1.75 | |

|85 |87% |2.00 |Good |

|82 |84% |2.25 | |

|80 |81% |2.50 |Fair |

|78 |79% |2.75 | |

|75 |77% |3.00 |Barely Satisfactory |

|Below 75% |5.00 |Failure |

|Prepared by: |Reviewed by: |Approved by: |

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| | | |

| | | |

|NORINA S. SALVADOR |JENNIFER T. BUEN |ESTELITA D. BELLO |

| |Curriculum Committee |Dean - IABF |

|Faculty | | |

| | | |

| |GERRY V. FERNANDO | |

| |Curriculum Committee | |

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