University of Southern California



|[pic] |ACCT 572: Corporate Accounting and Reporting |

| |Course Syllabus: Fall Semester 2015 |

| |Section: 14256R |

| |Class Sessions: MW 6:30-9:30 PM Classroom JKP 202 |

| |Professor: John Karayan, JD PhD |

| |Office: ACC 209 |

| |Phone/Voicemail: 213.740.1180 |

| |E-Mail: jkarayan@usc.edu |

| |Office Hours: M 4-6 PM, TTh 2-3 PM, |

| |& by appointment |

| | |

Course Description

A study of financial reporting and disclosure issues with an emphasis on the use of corporate financial statements and their accompanying footnotes. Not open to students with credit in equivalent subjects.

Learning Objectives

This course focuses on problems and issues related to the collection, reporting, and disclosure of financial accounting information.  By the time students finish this course, they should be able to:

 

•       explain and apply the rules used to prepare and report the financial accounting information observed in corporate annual reports by solving problems and analyzing transactions/Form 10-K data.

•       analyze how a given transaction (from simple to complex) affects each financial statement by preparing transaction analysis sheets.

•       extract relevant information from Form 10-Ks by solving problems and preparing written reports based on information presented in cases and Form 10-Ks.

•      identify and discuss the impact of external financial accounting information on various stakeholders (e.g., financial analysts, company management, auditors) by preparing written and oral presentations based on information presented in cases, Form 10Ks, and articles from the financial press.

Required Materials

1. Kieso, Donald E., Weygandt, Jerry J., & Warfield, and Terry D. Intermediate Accounting

FASB Update 15th Edition (John Wiley & Sons, 2014) ISBN 978-1-118-93878-2 (loose-leaf)

(electronic version ISBN 978-1-118-56216-1; hardcover version 978-1-118-98531-1)

This is the same book that was used last year.

Bring the assigned chapter to each class session.

2. Print out and bring to each class session The Walt Disney Company’s U. S. Securities & Exchange Commission Form 10-K Annual Report for the Fiscal Year Ended September 27, 2014

Prerequisites and Recommended Preparation

Prerequisite: GSBA 510 or equivalent. Corequisite: none. Restriction: course is not open to students with credits in equivalent subjects.

Students are expected to be familiar with the U.S., and with American English. Students are required to regularly read about current business developments (e.g., via a general business periodical like the Wall Street Journal).

Topics Covered

Accounting Info Systems

Accounting Rules

Sources

U. S. Convergence with International Rules

External Reporting

10-Ks

10-Q’s

Footnotes

Enforcement

Sarbanes-Oaxley

Income Statements

Elements

Irregular Items

Earnings per Share: basic and diluted

Correcting Accounting Errors

Statements of Retained Earnings

Statements of Comprehensive Income

Balance Sheets

Statements of Cash Flows

Revenue Recognition

Long Term Contracts

Multiple Deliverables

Asset & Expense Recognition:

Cash, Receivables, Provisions, & Impairments

Inventory, Cost of Goods Sold, Write-downs, & Impairments

Fixed Assets: Capitalization, Depreciation, Depletion, & Impairments

R&D, Goodwill, Other Operational Intangibles, and Impairments

Earnings Management

Pro Formas & non-GAAP Performance Measures

Investing in Equity

Fair Value Accounting

Equity Method of Accounting

Liability Recognition

Contingencies

Long Term Liabilities

Leases

Off Balance Sheet Financing and Variable Interest Entities

Equity-based Compensation

Pensions & Other Post-Retirement Benefits

Accounting for Income Taxes

Consolidated Financial Statements

Business Combinations

Foreign Currency

Hedging Transactions

Inflation/Deflation

Course Notes/Materials

USC's Blackboard learning management system and support information is available at blackboard.usc.edu. Distributed materials and other information will be available on the class’ Blackboard site. Although neither a required nor a formal part of the class, additional materials can be found on the Wiley Plus website if the course pack is purchased (e.g., through the bookstore).

Team Project

Most communication in business is oral, not written. Even presentations tend to be brief, and to the point, albeit illustrated with charts, graphs, and other visuals. Formal presentations are not too common, but those which are done tend to be important. Thus it is worthwhile practicing presenting them in class.

The same goes for working in teams. Many of the most important ventures in the business world are driven by teams, whose members are not self-selected but whose leader is. Thus, for this assignment students have been assigned to teams, and team leaders identified, on a systematic random basis.

In this class, students will be assigned on a systematic random basis to teams of about 4. Each team will, in turn, be assigned a classic accounting scandal. Teams are to deliver their resulting explanation and analyses of their scandal in a PowerPoint-type presentation to the class, which should run around 15 minutes and actively involve the audience. Teams must prepare a one-page handout to be passed out to class members. In addition, a copy of the presentation file is to be e-mailed to me no later than the day after the presentation.

A team’s score will be assigned to each team member. However, students identified by their team as not doing their fair share of the work are subject to reduced scores.

Grading Policies

Each student’s course grade will be determined by the student’s relative performance on 3 in-class exams and a team project. The exams will be non-cumulative. The dates and topics covered are indicated below. Midterm exams generally will be returned and discussed the next class. Those wishing to contest a score must do so in writing within one week after the return date.

The exams will be closed-book and closed notes. They will consist of multiple choice questions and/or problems drawn fairly evenly from the topics covered. Students need not bring Scantron forms or Bluebook’s; answers to problems are to be written on the exam itself, and can be in pencil. Graded items will be returned to students, except for the final exam which will be retained kept for a year.

The total possible points will be:

Exam I 200

Exam II 200

Team Project 100

Final Exam 400

Total 900

Preparing for exams involves dedication, and should end only when a student can: 1) identify the relevant issues in a given business situation; 2) analyze the data and transform it into information to be used in a comprehensive answer; and 3) explain what was done using techniques demonstrated in class.

The Leventhal School of Accounting policy is that exams should not be missed unless there is a very serious emergency which is properly documented, otherwise a score of zero results. Also, to the extent possible, students must inform the instructor of the emergency prior to the exam (it is understood this is not always possible). In the case of a properly documented serious emergency, rather than a make-up exam a substitute grade will be calculated based on the student’s score on next exam.

The final exam must be taken at the scheduled time unless an incomplete contract has previously been approved according to Marshall guidelines.

Course Goals and Learning Objectives

           This course focuses on problems and issues related to the collection, reporting, and disclosure of financial accounting information.  The objectives and expected learning outcomes of the course include the following:

By the time students finish this course, they should be able to

 

•       explain and apply the rules used to prepare and report the financial accounting information observed in corporate annual reports by solving problems and analyzing transactions/Form 10-K data.

•       analyze how a given transaction (from simple to complex) affects each financial statement by preparing transaction analysis sheets.

•       extract relevant information from Form 10-Ks by solving problems and preparing written reports based on information presented in cases and Form 10-Ks.

•      identify and discuss the impact of external financial accounting information on various stakeholders (e.g., financial analysts, company management, auditors) by preparing written and oral presentations based on information presented in cases, Form 10Ks, and articles from the financial press.

•      demonstrate an understanding of the usefulness and limitations of external financial accounting information by preparing written and oral presentations based on information presented in cases, Form 10Ks, and articles from the financial press.

•      apply ethical principles in analyzing situations and making informed decisions.

Retention of Graded Coursework

Graded work that was not returned will be retained for one year after the end of the semester.

Technology Policy

Laptop and Internet usage is not permitted during class sessions unless otherwise stated by the professor. Use of other personal communication devices, such as cell phones, is considered unprofessional and is not permitted during class sessions, except in emergencies or as specified by USC’s Disability Services and Programs. Upon request, all electronic devices in student’s possession (e.g., phones, tablets, laptops) must be completely turned off and/or put face down on the desk in front of the student. In addition, at certain times (i.e., during exams), students might also be asked to deposit such devices in a designated area in the classroom.

Recordings

No student may record any lecture, class discussion, or meeting with the professor without the professor’s prior express written permission. The word “record” or the act of recording includes, but is not limited to, any and all means by which sound or visual images can be stored, duplicated or retransmitted whether by an electro-mechanical, analog, digital, wire, electronic or other device or any other means of signal encoding. The professor reserves all rights, including copyright, to lectures, course syllabi and related materials, including summaries, PowerPoints, prior exams, answer keys, and all supplementary course materials available to the students enrolled in this class whether posted on Blackboard or otherwise. These may not be reproduced, distributed, copied, or disseminated in any media or in any form, including but not limited to all course note-sharing websites. Exceptions are made for students who have made prior arrangements with USC’s Disability Services and Programs and the professor.

Statement for Students with Disabilities

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. DSP is located in STU 301 and is open 8:30 a.m. – 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776. For more information visit usc.edu/disability.

DSP determines all accommodations. These are specified in the DSP’s Letter of Verification, which must be presented to the instructor as early in the semester as possible.

No later than 3 days before an exam or quiz covered by a DSP Letter of Verification, the student must reserve a room in the ACC Library for the same day and start time as the class session in which the test is being given. This is where the student will take the test. No later than 2 days before the test, the student must contact my Administrative Assistant, Ms. Ingrid McClendon, and arrange for her to administer the test. Her office is in ACC 121, her telephone # is 213-740-4845, and her e-mail address is ingrid@marshall.usc.edu . The student then must arrive at her desk in ACC 121 no later than 10 minutes prior to the scheduled time.

Statement on Academic Integrity

USC seeks to maintain an optimal learning environment. General principles of academic honesty include the concept of respect for the intellectual property of others, the expectation that individual work will be submitted unless otherwise allowed by an instructor, and the obligations both to protect one’s own academic work from misuse by others as well as to avoid using another’s work as one’s own. All students are expected to understand and abide by these principles. SCampus, the Student Guidebook, (usc.edu/scampus or ) contains the University Student Conduct Code (see University Governance, Section 11.00), while the recommended sanctions are located in Appendix A.

Students will be referred to the Office of Student Judicial Affairs and Community Standards for further review, should there be any suspicion of academic dishonesty. The Review process can be found at: . Failure to adhere to the academic conduct standards set forth by these guidelines and our programs will not be tolerated by the USC Marshall community and can lead to dismissal.

Statement on Academic Conduct and Support Systems  

Academic Conduct

Students enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code.  Students are responsible for obtaining, reading, and understanding the Honor Code System handbook.  Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook.  For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101.

Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism in SCampus in Section 11, Behavior Violating University Standards . Other forms of academic dishonesty are equally unacceptable. See additional information in SCampus and university policies on scientific misconduct, .

  Discrimination, sexual assault, and harassment are not tolerated by the university. You are encouraged to report any incidents to the Office of Equity and Diversity or to the Department of Public Safety .  This is important for the safety whole USC community. Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report, or can initiate the report on behalf of another person. The Center for Women and Men provides 24/7 confidential support, and the sexual assault resource center webpage sarc@usc.edu describes reporting options and other resources.

  Support Systems

  A number of USC’s schools provide support for students who need help with scholarly writing. Check with your advisor or program staff to find out more. Students whose primary language is not English should check with the American Language Institute ,  which sponsors courses and workshops specifically for international graduate students. The Office of Disability Services and Programs provides certification for students with disabilities and helps arrange the relevant accommodations. If an officially declared emergency makes travel to campus infeasible, USC Emergency Information will provide safety and other updates, including ways in which instruction will be continued by means of blackboard, teleconferencing, and other technology.

Emergency Preparedness/Course Continuity

In case of a declared emergency if travel to campus is not feasible, USC executive leadership will announce an electronic way for instructors to teach using a combination of Blackboard and other technologies.

For additional information, students may use any of the following:

USC Emergency – (213) 740-4321

USC Emergency Information – (213) 740-9233

USC Information – (213) 740-2311

KUSC Radio – 91.5 FM

Schedule of Class Sessions

|Date |Topic | Reading for Session |Problems to be Solved |

| | | |before Session |

|8/24 |Corporate Accounting & Reporting: An Overview |Scan Walt Disney Company’s Form 10-K Annual Report for| |

| | |the Fiscal Year Ended September 27, 2014 | |

|8/31 |Review of Accounting Info Systems | |Kellogg Company (pp. |

| |Review of Sources of Accounting Rules | |151-52) |

| |Accounting Standards | | |

| |Accounting Conventions | | |

| |Codification of U. S. GAAP | | |

| |Convergence with International Rules |Ch. 1, pp. 31-38 |IFRS 1-7 (p. 38) |

| |Full Disclosure |Ch. 24, pp.1491-1497 |CA 24-4 |

| |Enforcement | | |

| |Sarbanes-Oaxley | | |

| |Earnings Per Share |Ch. 16, pp. 882-892 & Appendix 16B |P 16-5 |

| |Earnings Management | | |

| |Pro Formas & non-GAAP | | |

| |Performance Measures | | |

|9/7 |Holiday | | |

|9/14 | Review of Standard Financial Statements | | |

| |Income Statement | | |

| |Elements | | |

| |Accrual versus cash basis |Ch. 3, Appendix 3A | |

| |Irregular Items |Ch. 4, pp. 168-181 |E 4-1 |

| |Accounting Changes and Errors |Ch. 22 |E 22-18 (a), (c) |

| |Statement of Retained Earnings |Ch. 4, pp. 181-185 |E 4-9 |

| |Statement of Comprehensive Income | |E14-17 |

| |Balance Sheet |Ch. 5 |Uniroyal Tech. |

| | | |(pp. 274-75) |

|9/21 |Statement of Cash Flows |Ch. 23, 1434-1442 |Vermont Teddy Bear Case (a)|

| | | |(pp. 1478-79) |

| | | |CA 18-7, E 18-13, |

| |Revenue Recognition: |FASB UPDATE Ch. 18 |E 18-24, E18-27 |

| |Long Term Contracts | | |

| |Multiple Deliverables | | |

|9/28 |Asset & Expense Recognition: | | |

| |Cash, Receivables, Provisions for Bad Debts and Warranties, & |Ch. 7, pp. 349-364 & Appendix 7B |P 7-4, P 7-10 |

| |Impairments | | |

| |Contingencies |Ch. 13, pp. 715-726 |E 13-11 |

| |Inventory, Cost of Goods Sold, |Ch. 8, pp. 428-443 |CA-8 |

| |Write-downs & Impairments |Ch. 9, pp. 473-494 |Robots pp. 522-23 |

|10/5 |Exam 1: topics covered 8/31 through 9/28 | | |

|10/12 |Capitalize versus Expense | | |

| |Long Term Assets |Ch. 10, pp. 540-561 |E 10-10 |

| |Depreciation, Impairments, & Depletion |Ch. 11, pp. 588-607 |P 11-9 |

| |Operational Intangibles, Amortization, Impairment, and R& D |Ch. 12 |CA 12-1, CA 12-2 P 12-5 (a)|

| | | |(b) (c) |

| | | |IFRS 12-10 p. 698 |

|10/19 |Fair Value Accounting |Ch. 17, Appendix C |P 17-8(b) |

| |Investing in Equity: |Ch. 17, pp. 950-976 |E 17-15 |

| |0%-20% Equity Stake | |Union Planters |

| |20%-50% Equity Stake | |(pp. 1024-1025) |

| |Comprehensive Income | | |

| |Liability Recognition |Ch. 14, pp. 766-767 |CA 14-4 |

| |Off balance sheet financing |Ch. 14, pp. 776-789 | |

| |Leases |Ch. 21, pp. 1274-1283, 1289-99 |Walmart Stores |

| |Variable Interest Entities |Ch. 17, Appendix B |(p. 1330) |

|10/26 |Exam 2: Topics covered 10/12-10/19 | | |

|11/2 |Accounting for Income Taxes: |Appendix 11A | |

| |Corporate Income Taxation | | |

|11/9 |Accounting for Income Taxes: |Ch. 19, pp 1116-1143 |P 19-4 (a) |

| |Permanent and Temporary Differences |Ch. 7, p 349 |E 19-23 (a), (c) |

| |Deferred Taxes | |P 19-6 |

| |Unequal Future Tax Rates | |CA 19-6 |

| |NOLs and Valuation Allowance | |Proctor & Gamble |

| |Uncertain Tax Positions | |(pp. 1172-73) |

|11/16 |Equity-based Compensation |Ch. 16, pp. 891-899 & Appendix 16A |E 16-11, E16-13, |

| | | |E 16-22(a), |

| | | |E 16-26(a) |

| |Pensions & Other Post- Retirement Benefits |Ch. 20 |E 20-2, E 20-8 |

|11/23 |Consolidated Financial Statements | | |

| |Foreign Currency Translation | | |

| |Accounting for Foreign Currency Transactions | | |

| |Accounting for Hedging Transactions | | |

| |Accounting for Inflation/Deflation |Ch. 17, Appendix A |E 17-22 (c) |

| |Business Combinations | |P 17-16 (b)(c)(d) |

| | | |P 17-17 (f)(g) |

|11/30 |Team Presentations | | |

|12/14 |Final Exam (topics covered 11/2-11/23) |Monday 7-9 PM |

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