22754 Corporate Accounting

Subject level: Postgraduate

Handbook description

This subject examines the institutional and legal framework of modern Australian accounting including reference to international accounting standards and local and overseas standards and exposure drafts. The main topics include: accounting for acquisition of assets including business enterprises; valuation and goodwill; consolidated accounts of complex economic entities; accounting for associate companies and joint ventures; accounting for financial instruments; corporate restructuring and liquidation.

Subject objectives/outcomes

On successful completion of this subject, students will be able to:

1. Apply relevant research skills in assessing economic entities.
2. Understand and apply the range of local, overseas and international regulations that determine this accounting and reporting.
3. Understand the rationale behind these standards so that application can be done in unseen situations.
4. Examine the political nature of accounting regulation and the consequences for the quality of accounting standards and financial information.
5. Able to argue for and communicate verbally and in writing an opinion as to the appropriate accounting treatment applicable in the circumstances.

Contribution to graduate profile

This subject is concerned with external reporting by companies and the theoretical and practical issues relating to the formation of those reports. It emphasises the conceptual issues relating to the application of particular accounting techniques. This subject is a specialist subject addressing professional issues about accounting and disclosure by corporations. Its aim is to impart the ability to prepare company and consolidated financial statements, and, as a consequence, understand the published results of corporate combinations.

Teaching and learning strategies

Lectures will be employed to outline the ideas and concepts underlying each topic. Illustrations of the application of these ideas and concepts will be integrated into the lecture through discussion questions as well as exercises and problems relating to each topic. Videos will be used to foster discussion of current issues.

Additional readings and handouts will be provided from time to time. Case studies of relevant investigations in current financial press coverage will be used extensively.

Students will undertake syndicate projects and be involved in presentations to the student body and the subject coordinator.

Content

• Overview of the nature and regulation of companies
• Accounting for the acquisition of assets and revaluations
• Consolidations
• The concept of control and the principles underlying a consolidation
• Accounting for intercompany transactions
• Direct and indirect outside equity interests
• Disclosure requirements
• Accounting for investments in associates
• Significant interest and the equity method
• Required note disclosure
• Accounting for interests in joint ventures
• Joint venture entities and joint venture operations
• Methods of accounting for joint venture operations
• Statutory disclosure requirements
• Accounting for financial instruments, corporate restructuring and liquidation
• Applicable regulations, accounting and disclosure requirements for forfeiture and reissue of shares, redeemable preference shares, share buybacks
• Winding up, priority of payments, rights of contributories, accounting for liquidation
• Corporate disclosure
• Legal requirements and accounting policies, financial performance and financial position, segments, additional notes.

Assessment

Recommended text(s)

Eddey P, Arthur N, and Knapp, J. (2001) Accounting for Corporate Combinations and Associations. (5th edition) Prentice Hall

Jubb, P., Langfield-Smith, I. And Haswell, S. (2002), Company Accounting, Thomson.

Indicative references

Accounting Handbook, 2003, Prentice Hall

Deegan, C. (2002), Australian Financial Accounting A Practical, Conceptual and Theoretical Analysis,( 2nd Edition), Irwin/McGraw-Hill, Sydney.

Henderson, S. and G. Peirson (2002), Issues in Financial Accounting, (10th edition), Longman Cheshire

Gordon, I. and Morris, R.D. (1996) 'The equity accounting saga in Australia: Cyclical standard setting', Abacus, September, 153-177

Sims M., and Clift R., (2001) Australian Corporate Accounting. McGraw-Hill Sydney.