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Post Graduate Programme in Management At Mumbai
2013-14TERM: I
TITLE OF THE COURSE: MANAGERIAL ACCOUNTIN G AND CONTROL ICREDITS: 4
Name of the Faculty member
Prof. Akila Kalyanaraman
COURSE DESCRIPTION
Accounting is the language of business. It attempts to measure and report corporate performance. Users of financial statements demand the performance measure in a variety of decisions they make. Managers use accounting in making decisions; while investors use it for valuing stocks. The bankers and lender rely on accounting information to decide to whether to lend money to business. The accounting information is also crucial in evaluating the performance of employees at various levels in an organization.
COURSE OBJECTIVES
This course is designed with the following objectives:
Help the participants to become intelligent users of accounting information
Understand the rules and managements discretion
Understand what explains the rules and the type of management discretion
Understand how events affect firm value Make the participants comfortable looking through an annual report
Develop the ability in participants to use financial statements to assess a companys performance
Participants to get a sense of the limitations of financial statement data
PEDAGOGY/TEACHING ME THOD
Cases, minicases and annual report discussion.
EVALUATIONWeightage
Quizzes
25%Case Analysis / Home Assignments20%Mid-term Examination
25%End-term Examination
30%Total
100%
SCHEDULE OF SESSIONS
Module IPREPARATION OF FINANCIAL STATEMENTS
Module Objective
To explain the basic principles underlying the preparation of financial statements and to go through the entire accounting process quickly to establish an overview.
Sessions and ObjectiveSession 1:Balance Sheet
Objective: To explain how to prepare the balance sheet and the importance of each underlying principle.
Reading:AHM: Chapter 2: Basic Accounting Concepts: The Balance Sheet Case:Smoky Valley Caf
Session 2:Income Statement
Objective: To explain how to prepare the income statement of a firm and the underlying principles in accrual accounting.
Reading:AHM: Chapter 3: Basic Accounting Concepts: The Income Statement Case:Mansa Building [IIMA / F&A-0089R]
Sessions 3 and 4:Income Statement- Merchandising firms
Objective:To introduce the system of double-entry bookkeeping and to explain its elements viz. preparation of journal, the ledger and the trial balance.
Reading:AHM: Chapter 4: Accounting Records and SystemsCase:AHM: Case 4 4: Waltham Oil and Lube Centre, Inc.
Session 5:Income Statement Manufacturing firm
Objective:To explain how the costs are accrued in the manufacturing context and estimating the cost of goods manufactured and cost of goods sold apart from preparation of classified financial statements.
Reading:AHM: Chapter 6: Cost of Sales and Inventories, pgs. 148-152 Case:Birla3M [IIMA / F&A-0462]
Sessions 6 and 7:Cash Flow Statement
Objective:To explain how to prepare the cash flow statement including cash flows from operating, investing and financin g activities and also to calculate the cash from operations by indirect method
Reading:AHM: Chapter 11: Statement of Cash Flows
Case:Chemalite, Inc. [B] [9-195-130]
ModuleIIACCOUNTING POLICIES AND MANAGERIAL CHOICES
Module Objecti ve
To discuss important accounting policies and standards which are required for measuring the revenues, expenses, assets and liabilities.
Sessions and Objective
Session 8: Revenue Recognition
Objective:To explain the revenue recognition methods used when the critical event and measurability conditions for revenue recognition are not satisfied at the point of sale.
Reading:AHM: Chapter 5: Revenue and Monetary Assets
Case:AHM: Case 5 2: Grennell Farm
Session 9: Issues in Revenue Recognition
Objective: To understand the accounting standard on revenue recognition and when to recognize revenue in different types of sales transactions.
Reading:Revenue Recognition and Reporting [9 -101-050]
Case:Boston Automation [9-103 -041]
Session 10: Accounting for Inventory
Objective:To explain different classification of inventory and how to measure the value of inventory under different methods as well as explaining accounting standard regarding Inventory.
Readings:
AHM: Chapter 6: Cost of Sales and Inventories
The Question of LIFO or FIFO: Which is Preferable? [9 -104-087]
Case:Merrimack Tractors and Mowers, Inc.: LIFO or FIFO? [3217]
Session 11: Accounting for Depreciation
Objective: To understand how to measure the depreciation expenses for long-lived assets under different methods as well as explaining the relevant accounting standard.
Readings:
AHM: Chapter 7: Long -lived Nonmonetary Assets and Their Amortization
Accounting for Property, Plant, and Equipment and Other Assets [9 -193 -046]
Case:Depreciation at Delta and Singapore Airlines [9-198-001]
Session 12: Accounting for Long Lived Assets
Objective:To evaluate the three models of accounting for long -lived assets (cost, reva luation and fair value models) and to conclude on a major financial reporting decision.
Readings:
AHM: Chapter 7: Long -lived Nonmonetary Assets and Their Amortization
Asset Reporting [9-101 -014]
Case:Land Securities Group [A] [9 -105 -014]
Session 13: Accounting for Equity
Objective:To understand the accounting and financial reporting for owners equity. Reading: AHM: Chapter 9: Sources of Capital: Owners EquityCase:Kemp Foods Corporation [9-110-101]
Session 14: Accounting for Liabilities
Objective: To understand when to recognize the contingent liability and to measure and record it in financial statements.
Reading:AHM: Chapter 8: Sources of Capital: Debt
Case: Accounting for the Intel Pentium Chip Flaw [9-101-072]
Session 15: Accounting for Leases
Objective:To understand when to capitalize a lease and how to report in the financial statements.
Readings:Lease Accounting and Analysis [9-100-003]
Lease Reporting and Analysis
Case:A Note on Comdiscos Lease Accounting [9-196-122]
Session 16: Accounting for Income Taxes
Objective: To understand the situations in which deferred tax arise as asset or liability and how to report in the financial statements.
Reading:Income Tax Reporting and Analysis
Case:Taxing situations: Two cases on income taxes and Financial Reporting [9 -191-071]
ModuleIII: FINANCIAL STATEMENT ANALYSIS
Module Objective
To examine the information contained in corporate annual report, assess the performance from different viewpoints and to understand the limitations of the accounting data.
Sessions and Objective
Sessions 17 and 18:Understanding of Annual Report
Objective: To explain how to understand the corporate financial statements in prescribed format as well as significant account policies apart from directors report, auditors report and the management discussion.
Reading:AHM: Chapter 14: Understanding of Annual Report
Discussion:Annual Report of Hindustan Unilever Limited
Session 19: Financial Statement Analysis
Objective: To explain how analyze the corporate financial statements from the viewpoint of various stakeholders about the performance of the company and its financial condition.
Reading:AHM: Chapter 13: Financial Statement Analysis
Case:Analyzing the Financial Statements of Hindustan Unilever Limited
Session 20: Review
Objective: To review the topics covered in different sessions of the course and Q&A session on any accounting issue related to meeting the objectives of the course.
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