Syllabus BUS 512M Financial Reporting & Analysis Susan Crosson Office: Room 462 Cell phone:

Transcription

1 Syllabus BUS 512M Financial Reporting & Analysis Susan Crosson Office: Room 462 Cell phone: Description Financial accounting is a conceptual model and methodology for measuring, processing, and communicating financial information about the business activities of an organization. Financial reporting consists of corporate financial statements and other financial disclosures that companies provide to investors and other stakeholders. Financial Statement Analysis includes both accounting analysis and financial statement ratio analysis. This course covers financial accounting, financial reporting, and accounting analysis, as well as financial statement ratio analysis to a limited extent. Financial statement ratio analysis is covered more extensively in the corporate finance sequence in the program. Managers often have a significant amount of latitude in deciding how to treat economic events in the financial accounting model and how to report them in the financial statements; hence, it is important for companies to develop accounting policies and strategies to achieve relevant and reliable financial reporting that is consistent with their business strategies. This course is presented from a user or managerial perspective, rather than a preparer perspective. Upon completing it, students will have an understanding of the financial accounting and reporting model and how it is applied in a wide variety of organizations and applications. We will use the annual reports of publically traded companies as our primary frames of reference in the course. Course Learning Objectives 1. Understand basic measurement concepts underlying primary financial statements and the relative importance of the Income Statement, Balance Sheet, Statement of Cash Flows, and Statement of Retained Earnings. 2. Locate and use information on a corporate annual report to analyze a company s financial performance and position. Course Text Pratt, Jaime, Financial Accounting in an Economic Context, Wiley, 2009 (8 th Edition). E-Resources 1. There is a 512M-14 course conference on Blackboard and FirstClass that will be used for all outside-of-class communications. All course materials, including announcements, assignments, lecture notes, explanations, assignment solutions, and other course materials will be provided at various times on Blackboard or in FirstClass. 2. As stated above, we will use the annual reports of publically traded companies like Nike, Coca-Cola, Walmart, and Eli Lilly and Company as our primary frames of reference in our

2 study of financial reporting. Links to annual reports used will be posted to the 512M-14 Blackboard course. In addition, photo copies of financial statements from annual reports used in class will be provided to you in your residency materials. Pre-Course Work Financial Reporting & Analysis requires students to have a minimum working knowledge in financial accounting before beginning the first residency of the course. Therefore, depending on your background, there may be a significant amount of work to do during the Pre-Course Work period for the first residency. Financial reporting relies on the system of double-entry accounting, the basic structure of financial statements, and a specific set of terms and concepts that should be mastered before our first course meeting. Several resources are available in the Module One folder in Blackboard to assist you in achieving these necessary skills, including YouTube videos and pencasts. You can also read the first five chapters of the Financial Accounting textbook that cover these concepts and procedures. To assist you in assessing your readiness to begin the 1st residency, a homework assignment will be available for this course November 4, Your solution to this assignment which applies pre-course material, should be submitted for grading at the start of class on November 29, There will be an optional homework help session the week of November 25-29, time and location TBA. Determination of Grades: Grades will be based on the following: Homework/Quizzes/Participation/Engagement 30% Mid-term Exam-Individual Assignment 35% Final Exam-Individual Assignment 35% 100% Grades will be based on the School s MBA grading policy. The top 15% of the class will receive a grade of DS, and the next 35% will receive a grade of HP. If all goes well -- and if we all fulfill our respective responsibilities -- no more than 10% will receive a grade lower than PS. Description of Grade Components: The quizzes and exams will be open book and open notes. The mid-term and final exams typically consist of a combination of multiple choice questions, short-answer questions and problems, and questions based on actual annual reports. Quizzes and exams will be submitted to me via Blackboard or , susan.crosson@emory.edu. The homework/participation/engagement component attempts to measure the quality of an individual s contribution to his/her classmates learning experience and the effort applied in

3 learning the course material. The grade is based on three types of information: (1) a peer evaluation where each student lists five classmates (at most) that have had a positive impact on their learning experience, (2) my own assessment of in-class interaction and online engagement, and (3) the number of completed homework assignments turned in. To receive credit for homework, students should submit a copy of it on or before it is due. It is entirely appropriate to work these with other classmates, provided each person makes a good faith effort to work the assignments independently. Merely copying someone else s solution should not be done as doing the homework aids considerably in improving your understanding of the course material. Homework is graded for effort and not accuracy. Preparation & Participation Course preparation is crucial to the learning process. In fact, most of the actual learning takes place outside of the classroom, which is then modified and/or reinforced by the in-class discussion. Because financial accounting is an integrated conceptual model, each part of the model must be understood before subsequent elements are introduced. Hence, staying up with the pace of the course is vital. It is essential that you read and study the assigned chapter material in advance of each class. In addition, each problem assignment for the class must be analyzed and prepared (either by you individually or in study groups) prior to the class. Electronic copies of the assignment solutions will be made available to you after we have covered the assignments in class, or for the on-line segment of the course, after you have turned in your assignments. YouTube videos and/or pencasts will be provided to you for each of the topics in advance of the coverage of the topic online or in class. During the distance learning modules, there will be optional online discussions (on Adobe Connect) of selected issues covered in the modules, these will be recorded and archived for later viewing. Readings & Assignments The following pages present the required readings and assignments for the entire course. The numbered assignments are from the Pratt textbook. Homework will be submitted for grading for Modules 1, 2, 3, 5, 6, 8, and 9. Homework for the other modules will be discussed but will not be collected. Homework submitted for grading should be sent to me via Blackboard or susan.crosson@emory.edu on or before the due dates listed. You are encouraged to find articles relevant to course topics as you read The Wall Street Journal or other financial publications on a regular basis. Please send me the article via and state the relevant course topic when you find one. The WSJ and other business publications are available to you on-line without cost on the Goizueta Library data bases. Please note that all of the copyrighted course materials posted on Blackboard will be obtained from the Emory Library data bases, which are available directly to all Goizueta students. By downloading articles from the Library data bases not only are they more convenient but it is done with the express permission of the Emory Library staff and does not violate any copyright laws or the Library s agreements with its data base providers.

4 Submitting Homework and Exams Via BlackBoard or Please observe the following guidelines in submitting work: If Excel files are submitted, the spreadsheets should be formatted so that all related materials will print on the same page. I recommend that, before sending any materials in Excel files, you print them to make sure they are properly formatted. You can also save them as a pdf. The names of all attached files should include your name, plus a brief description of the document; for example, Jdoe Quiz #1, Jdoe Prob. 5-32, or Jdoe Mid-term All required submitted assignments and exams should be submitted using the Subject line 512M-Name of the Assignments-Your First and Last Name. Assignment Due Date Chart Module 1: JG and Sons At the start of class on November 29, 2012 Module 2: Emory Inc. At the start of class on November 30, 2012 Module 3: E 14-8 At the start of class on December 1, 2012 Module 5: Allowance for Bad Debts In Blackboard on or before NOON January 14, 2013 Module 6: Alternative Inventory Methods In Blackboard on or before NOON January 21, 2013 Module 8: Depreciation Methods and At the start of class on February 11, 2013 Equipment Disposal Module 9: Treatment of Bonds and At the start of class on February 12, 2013 Determining the Effective Interest Rate Other Guidelines To enable everyone in the class to gain the most from the in-class experience, students are requested to observe the following guidelines during the residencies: Please be in class and prepared to begin on time for each class and after each break. Please do not leave the room during class except for personal emergencies. If you need to leave, please do so as quietly as possible; It is important to bring your textbook and/or cases with you to all class sessions since we will be covering textbook problems and/or cases in most class sessions. Failure to bring these materials will make it difficult for you to participate adequately in class discussions and may result in a loss of participation credit. It is also requested that you bring a company you are interested in or your company s annual report to class. The MEMBA Program policy regarding notebook computers will apply to this course; consequently, we will observe a closed notebook policy during class time.

5 Course Calendar M Date Topic Text Reading Assignments & Preparation Assignment for Evaluation 11/4 to 11/24 11/4 to 11/24 PRE-WORK PERIOD FOR NOVEMBER RESIDENCY Module 1 Mechanics of Financial Accounting Prepare for Modules 2, 3, and 4. Pratt Chapter 4 Module 1 folder Complete JG and Sons handout and submit a copy at the beginning of class 11/29. There will be an optional face-to-face help session on 11/26 at 5:30 in W330. Pratt Chapters 2, 3, 5, 14, and Appendix A Module 2 folder Module 3 folder Module 4 folder 11/26 There will be an optional face-to-face help session on 11/26 at 5:30-7:00 in W330 for JG and Sons handout homework. 11/29 8:00-11:30 Module 2 Primary Financial Statements Pratt Chapters 2 and 5 Module 2 folder Complete Emory Inc. handout and submit a of class 11/30 11/30 8:00-11:30 12/1 8:00-11:30 Module 3 Primary Financial Statements continued Pratt Chapter 5 and 14 Module 4 Pratt Chapter 3 and Appendix A Module 3 folder Module 4 folder Complete E14-8 in text and submit a of class 12/1 Midterm will be distributed electronically December 15 and will be Due before 11:59 PM (Atlanta time) Sunday December 23, Enjoy the holidays 12/24 to 1/5. Week of 1/6 Week of 1/13 Module 5 Cash and Accounts Receivable Module 6 Merchandise Inventory Pratt Chapter 6 Module 5 folder Submit Allowance for Bad Debts handout before NOON 1/14 Pratt Chapter 7 Module 6 folder Submit Alternative Inventory Methods handout before NOON 1/21

6 Week of 1/20 1/27 2/9 2/10 1:00-4:30 2/11 1:00-4:30 2/12 1:00-4:30 Module 7 Current Liabilities PRE-WORK PERIOD FOR FEBRUARY RESIDENCY Prepare for Modules 8, 9, and 10. Module 8 Accounting for Investment Decisions Module 9 Accounting for Financing Decisions Module 10 Wrap up and field trip Michael Carlos Museum Pratt Chapter 10 pages Pratt Chapters 8, 9, 10, 11, and 12 Pratt Chapter 8 pages (equity investments) and Chapter 9 pages (property, plant, and equipment and intangibles) Pratt Chapter 10 pages (contingent liabilities), Chapter 11 pages (bonds and notes), Chapter 12 pages (owners equity) Module 7 folder Module 8 folder Module 9 folder Module 10 folder Module 8 folder Module 9 folder Module 10 folder Complete Alternative Depreciation Methods and Equipment Disposal handout and submit a of class 2/11 Complete Treatment of Bonds and Determining the Effective Interest Rate handout and submit a of class 2/12 Final Exam distributed electronically February 24 and is Due before Midnight (Atlanta time) on Saturday March 2, U.S. GAAP IFRS Convergence For the past several years, the Financial Accounting Standards Committee (FASB) and the International Accounting Standards Board (IASB) have been working cooperatively to harmonize U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). In 2007 the SEC adopted a policy that allows non-u.s. companies that are listed on the U.S. stock exchanges to present their financial statements to the SEC

7 based on IFRS without any reconciliation of IFRS earnings with U.S. GAAP earnings. The U.S. financial reporting environment is in the greatest state of flux that it has ever experienced. At this point, we can only speculate on what changes beyond current GAAP are likely to occur over the next several years for U.S. companies. Although this course is not designed to train managers in all the complex details of financial accounting standards, one purpose is to acquaint the executive student with the major underlying assumptions upon which financial statements are based. Because of the high degree of uncertainty regarding future changes, it is not feasible to devote a significant amount of time in this course to exploring possible future changes. Our goal will be primarily to acquaint you with major current accounting standards and conventions, and where appropriate to discuss existing differences between U.S. GAAP and IFRS.