Advanced Accounting delivers a balanced and detailed approach to the conceptual and technical aspects of financial accounting and reporting. The materials include comprehensive coverage of the three key methods of consolidated financial reporting (cost, partial equity, and complete equity). In its 6th edition, this course draws attention to the similarities and differences of U.S. Standards versus international principles.
Upon successful completion of this course, participants will be able to:
- Identify historical trends in types of business combinations and cite the major reasons that firms combine.
- Identify the factors that managers should consider in exercising due diligence in business combinations.
- Identify defensive tactics used to attempt to block business combinations.
- Recognize differences between an asset and a stock acquisition.
- Cite the factors used to determine the price and the method of payment for a business combination.
- Calculate an estimate of goodwill by discounting expected future excess earnings over some time period.
- Recognize differences between the two alternative views of consolidated financial statements.
- Identify concepts and requirements with Statements of Financial Accounting Concepts (SFAC) and the projects undertaking by FASB and the International Accounting Standards Board (IASB) and their primary objectives.
- Identify the major changes in the accounting for business combinations passed by the FASB in 2001 as well as changes made in December 2007, noting the reasons for both sets of changes.
- Cite elements of the goodwill impairment test, including its frequency, the steps laid out in the new standard, and some of the implementation problems.
- Cite the approach to reporting acquisition expenses.
- Identify the use of pro forma statements in business combinations.
- Identify the appropriate method for valuing assets, including goodwill, and liabilities in a business combination using the acquisition method.
- Identify how contingent consideration impacts the valuation of assets in a business combination using the acquisition method.
- Identify characteristics of leveraged buyouts.
- Cite disclosure requirements for business combinations.
- Recognize differences between GAAP and IFRS accounting for business combinations.
- Identify 'control' as it relates to business consolidations and cite the impact of controlling and non-controlling interests on the consolidation.
- Cite the rationales for acquiring a subsidiary versus acquiring its net assets and identify the resulting impact.
- Identify the valuation and classification of accounts in consolidated financial statements.
- Cite requirements for inclusion of a subsidiary in consolidated financial statements.
- Identify limitations in consolidated financial statements.
- Identify the journal entries and calculations for recording a subsidiary at the date of acquisition.
- Identify the need for eliminating entries at the date of acquisition.
- Recognize differences between implied value and book value of the acquired firm's equity.
- Recognize differences between GAAP and IFRS with respect to preparation of consolidated financial statements.
- Recognize differences between current accounting treatment for varying levels of influence and control by investors.
- Identify the appropriate accounting for investments under various different methods.
- Identify the approach to consolidating financial statements and computing implied book values.
- Cite the rules for accounting for interim acquisitions of subsidiary stock.
- Identify similarities and differences in consolidated cash flows depending on the method used to finance the acquisition.
- Recognize differences between GAAP and IFRS with respect to preparation of consolidated financial statements.
- Calculate the difference between implied and book values and allocate to the subsidiary's assets and liabilities.
- Identify the FASB's position on accounting for bargain acquisitions.
- Identify how goodwill is measured at the time of the acquisition.
- Recognize differences between the allocation process when a company acquires 100% of the subsidiary and when they acquire less than 100%.
- Record the entry needed to account for the investment under the various methods.
- Recall how to prepare workpapers for the year of acquisition and subsequent years under various methods.
- Allocate the difference between implied value and book value to long-term debt.
- Identify the accounting for the difference between implied value and book value when assets have fair values below book values or liabilities have fair values greater than book values.
- Note the application of push accounting to client situations.
- Identify the reporting objectives for intercompany sales of inventory.
- Calculate the amount of intercompany profit to be eliminated from the consolidated financial statements.
- Cite the authoritative position for eliminating 100% of intercompany profit not realized in transactions with outsiders and apply it in client situations.
- Recognize differences between upstream and downstream sales of inventory.
- Compute the noncontrolling interest in consolidated net income for upstream and downstream sales when not all inventory has been sold to outsiders.
- Recognize differences between the consolidation requirements for cost, partial equity, and complete equity situations.
- Identify the appropriate treatment of intercompany profit earned prior to the parent-subsidiary affiliation.
- Identify potential tax issues related to intercompany activity.
- Identify the reporting objectives in accounting for intercompany sales of depreciable and non-depreciable assets, noting the accounting treatment of gains or losses on these assets.
- Recognize differences between upstream and downstream sales and calculate their impacts on consolidation for both depreciable and non-depreciable asset sales under the cost, partial equity, and complete equity methods.
- Choose the requirements for recording or eliminating intercompany interest, rent, and service fees.
- Identify income tax impacts of intercompany transactions and determine the appropriate accounting treatment for them.
- Identify the types of transactions that change the parent company's ownership interest in a subsidiary.
- Identify the impact and required responses when a parent acquires subsidiary shares through multiple open market purchases using cost, partial equity method and complete equity method.
- Identify the reporting for differences between selling price and book value when shares are sold subsequent to acquisition.
- Recall how to prepare the required accounting entries on the books of the parent and in consolidation for purchases and sales of subsidiary stock by the parent.
- Compute the controlling and noncontrolling interest in income after the parent sells some shares of the subsidiary company.
- Recognize the impact of subsidiary issuance of new shares to the parent and account for purchase prices of more or less than book value.
- Recognize the impact on the investment in subsidiary account when the subsidiary issues new shares and they are purchased under various parent and minority interest situations.
- Identify the appropriate accounting treatment for constructive retirement of debt.
- Identify the appropriate accounting treatment when a company issues a note to an affiliated company which then discounts it to a third party.
- Determine the effect on the consolidated financial statements when a subsidiary issues a stock dividend and differentiate the impact of this versus a cash dividend on the consolidated financial statements.
- Identify the impact of stock dividends from pre-acquisition earnings versus postacquisition earnings.
- Determine the purchase price allocation when a subsidiary has both common and preferred stock outstanding and determining controlling interest in income.
- Recognize differences between a Chapter 7 and a Chapter 11 bankruptcy, voluntary and involuntary proceedings and cite the requirements and schedules required in bankruptcy proceedings.
- Identify the five priority categories of unsecured claims as well as the order in which they are settled.
- Recognize differences between fully secured, partially secured, and unsecured claims of creditors.
- Identify contractual agreements that the debtor and its creditors may enter into outside of formal bankruptcy proceedings to resolve the debtor's insolvent position.
- Identify ways that debt may be restructured in a reorganization and calculate the resulting gain or loss to be recognized.
- Cite the accounting and reporting requirements for a trustee when a company goes into receivership.
- Recognize differences between U.S. GAAP and IFRS, cite historical activity in the international accounting standards arena, and identify the reasons why the changing world environment is leading to an increased focus on international accounting standards.
- Recognize the milestones that must be achieved before the SEC will require adoption of IFRS.
- Identify components of the SEC's work plan for incorporating IFRS into the financial reporting system for U.S. issuers and identify current areas of difference between the two.
- Identify the historical success of the convergence projects and identify the four remaining joint convergence topics between IFRS and FASB.
- Cite the steps that a non-U.S. company must follow to list its shares on a U.S stock exchange.
- Identify the purpose of Form 20-F filed with the SEC and the rules around its completion.
- Identify the role of American Depository Receipts (ADRs) in the issuing of securities of non-U.S. companies in the United States.
- Recognize differences between measured and denominated as it relates to foreign currency issues and identify other common terms within the foreign currency realm.
- Identify the more common foreign currency transactions as well as the three stages of concern for accountants when dealing with these transactions, citing the steps used to translate currencies at each stage.
- Identify the role and use of forward exchange contracts, noting common situations where they can be used as a hedge.
- Note the characteristics of a derivative instrument and their use as a hedge.
- Cite the reporting rules for exchange gains and losses related to fair value and cash flow hedges.
- Identify current and historical exchange rates and the functional currency of the entity, citing the objective of financial statement translation.
- Compare the two methods used to convert financial statements of a foreign entity into U.S. dollars, noting the appropriate use of each.
- Note the impact of a highly inflationary economy on the translation of a foreign entity.
- Recognize differences between financial statements when the functional currency is the local currency and when it is the U.S. dollar.
- Identify the impact of foreign currency translation on comprehensive income and determine the appropriate disclosures for firms with foreign entity subsidiaries.
- Define an operating segment and a reportable segment, noting the required information and disclosures related to each.
- Cite the issues around aggregated and disaggregated financial data as well as the basic requirements for public companies in reporting segmental data.
- Note the components of disclosure.
- Recognize differences between GAAP and IFRS for segment reporting.
- Identify requirements for reporting interim data and cite some of the problems and the authoritative positions related to them.
- Recognize differences between general partnership, limited partnership, and a joint ventures, citing the important components of the agreement.
- Compare and contrast partnership equity accounts and corporate equity accounts, noting the use of the draw account and the capital account.
- Recall how to prepare journal entries for the partnership.
- Allocate partnership net income or loss under various different approaches.
- Specify the rationales for salary allowances and interest allowances within a partnership, noting the required journal entries.
- Identify the methods used to bring in a new partner or record the withdrawal of a partner as well as the resulting journal entries, differentiating between the bonus method and the goodwill method.
- Specify the steps used to distribute available partnership assets in liquidation under the Uniform Partnership Act (UPA), noting the applicable rules and considerations within each step.
- Cite the order of priority for each class of creditors in a partnership liquidation under the UPA.
- Recall how to prepare a liquidation schedule to settle debts and allocate assets as well as a 'safe payment approach' liquidation schedule.
- Identify the four steps used in the preparation of an advance plan for the distribution of cash in a partnership liquidation.
- Recall how to prepare the journal entries to incorporate a partnership.
- Recognize differences between a nonbusiness organization and a profit-oriented enterprise.
- Identify the role of fund accounting as well as the organizations which promulgate standards for the entities using fund accounting.
- Identify the basis of financial statements for government entities, noting the relevant Concepts Statements which underlie the financial statements.
- Recognize differences among the concepts of revenues, expenses, and expenditures a used in profit-oriented entities and as used for expendable fund entities.
- Identify the classification of funds within various organization and differentiate between revenues and other resource inflows and expenditures and other resource outflows for fund accounting.
- Note the critical events in the use of financial resources of an expendable fund.
- Identify how capital expenditures are recorded in an expendable fund.
- Cite the classifications of fund balance under GASB Statement No. 54.
- Note the role of the general fund.
- Compare and contrast the consumption and purchases methods of accounting for inventories (and other prepaid items).
- Identify the broad categories of government fund entities, noting issues related to developing standards for nonprofit organizations.
- Differentiate between the various funds used by governments, noting how their revenues are accounted for and the difference between these funds and proprietary funds.
- Identify the appropriate financial reporting requirements as well as the reporting requirements for capital assets and long-term obligations by governments.
- Identify the types of inter-fund transfers.
- Identify the source of nongovernment, nonbusiness organizations (NNOs), noting the funds used and the statements required for such organizations.
- Differentiate between a current restricted fund and an unrestricted fund as well as the difference between a mandatory and a non-mandatory transfer.
- Identify the appropriate treatment of 'assets whose use is limited' and donations, including donations of services, property, plant, and equipment, and endowments.
- Recognize the appropriate financial statement presentation for NNOs.
- Identify special issues including the use of loan funds, annuity or life income funds, and the needs of hospitals.
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