SAINT MA RY’S UN IVERSITY

Curse Title: Advanced Financial Accounting Course Code: AcFn 521

COURSE DESCRIPTION
The course examines selected advanced accounting concepts. It deals with issues in advanced
accounting like business combinations; consolidated financial statements; accounting for foreign
currency transactions and translation of foreign currency financial statements; and other recent
developments in financial accounting.
COURSE OBJECTIVE
The major objective of this course is to make students familiar with advanced financial accounting
concepts and on the application of those concepts to problems arising in modern business organizations
(Inter-corporate investment, consolidations and accounting for foreign currency transactions, translations
of foreign currency financial statements and recent developments in financial accounting).

COURSE CONTENT
Chapter 1: Overview of Financial Accounting
1.1Conceptual Frameworks for Financial Reporting
1.2 Information perspective, agency theory and financial reporting
1.3 Integrity of financial reporting
1.4 The International Code of Ethics for Professional Accountants
1.5 Accounting standard setting bodies
1.6. Common Set of Global Accounting Standards
1.7. Rule based Vs Principle based standards
1.8. Financial reporting standards in Ethiopia
1.9. Role of Financial Accountants in modern organizations
Main Reading (s)
1. Elliott B & Elliott J. (2019). (Chapter 6)
2. Melville A. (2019). (Chapter 1&2)
3. Financial Reporting Proclamation 847/2014
4. Council of Ministers Regulation 332/2014
Chapter 2: Inter-corporate Acquisitions and Investments in Other Entities
2.1. Business expansion: why & how?
2.2. Classification of inter-corporate investments
2.3 Accounting method for inter-corporate investments
2.4 Accounting for investment in associates and joint arrangements
2.5 Business combination
2.6 Accounting for Business Combinations (IFRS 3)
Main Readings
1. IFRS 3, IAS 28, IFRS 11, IFRS 9, IFRS 12
2. Elliott B & Elliott J. (2019). (Chapter 25)
3. Melville A. (2019).
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Chapter 3: The Reporting Entity and Consolidated Financial Statements
3.1 Introduction
3.2 Principle of substance over form
3.3 Consolidated vs Unconsolidated Financial statements
3.4 Agency theory and limitation of consolidated financial statement
3.5 The Concept of Control
3.6 Consolidation Theories
Main Readings
1. IFRS 10, IFRS 12
2. Mian, S. L., & Smith Jr, C. W. (1990)
3. Holthausen, R. W. (1990)
4. Holthausen, R. W., & Leftwich, R. W. (1983).
5. Beams et al., (2018). (Chapter 11)
Chapter 4: Consolidating groups at the date of acquisition
4.1 Introduction
4.2 Elimination of investment
4.3 Preparation of Consolidated Statement of financial position 100% ownership
4.4 Preparation of Consolidated Statement of financial position-Controlling Interest
4.5 Illustrations
Main Readings
1. Elliott B & Elliott J. (2019). (Chapter 22)
2. Melville A. (2019). (Chapter 18 & 19)
3. Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay (2015) (Chapter 2&5)
Chapter 5: Consolidating groups Following Acquisition
5.1 Introduction
5.2 Issues in subsequent Years
5.3 Amortization of Fair Value Differentials
5.4 Non-controlling interest (NCI)
5.5 Goodwill Impairment Test
5.6 Illustrations
Main Readings
1. Melville A. (2019).
2. Elliott B & Elliott J. (2019). (Chapter 23)
2. Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay (2015) (Chapter 4)
Chapter 6: Foreign Currency Transactions & Translation of Foreign Entity Statements
6.1 Introduction
6.2 How to record foreign currency transactions in a company’s own books
6.3 Concept of Functional and Presentation Currencies
6.4 Translating the functional currency into the presentation currency
6.5 Preparation of consolidated accounts
6.6 How to reduce the risk of translation differences
6.7 Critique of the use of presentational currency
6.8 Accounting for price level change (Inflation accounting-IAS 29)
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 Main Readings
1. Elliott B & Elliott J. (2019). (Chapter 26)
2. IAS 21, IAS 29
3. Melville A. (2017). (Chapter 21)
4. Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay (2015) (Chapter 8 & 9)
Chapter 7: Integrated reporting: sustainability, environmental and social
7.1 Introduction
7.2 Environmental and social disasters, the adverse consequences that can follow and the lessons to be
learnt
7.3 Integrated reporting concepts
7.4 The historical context of the evolution of integrated reporting including the drivers of this movement
7.5 The efforts on which integrated reporting builds
7.6 The contribution of accountants
7.7 Integrated reporting – its impact on the future development of financial reporting and accounting
Reading (s)
1. Elliott B & Elliott J. (2019). (Chapter 32)
RESOURCES
Melville A. (2019). International Financial Reporting: A Practical Guide 7th ed. Pearson Education
Limited
Elliott B & Elliott J. (2019). Financial Accounting and Reporting.19th ed. Pearson Education Limited
Thomas H. Beechy, V. Umashanker Trivedi, Kenneth E. MacAulay (2015). Advanced financial
accounting -- 7th ed., Pearson Canada Inc
Wiley 2015 Interpretation and Application of International Financial Reporting Standards John Wiley
& Sons, Inc
Financial reporting Proclamation 847/2014 of the government of Ethiopia
Council of Ministers Regulation 332/2014
Christensen, Cottrell, Baker (2016). Advanced financial accounting, tenth edition, The McGraw-Hill
Companies, Inc
Beams et al., (2018). Advanced Accounting, 13th ed. Pearson Education Limited
COURSE POLICIES
A. Teaching Methods
• Lecture
• Group discussion
• Case study
• Article review
B. Classroom Policy
Students should switch off their mobile phone while attending classes and during exams. Students
should make active participations in class and should forward ideas to the class when they are allowed
to do so.
C. Attendance Policy
Regular attendance and punctuality to class are strongly advised. Irregular attendance detracts the
student’s learning and prevents participation in the important intellectual exchanges that occur among
students and the instructor. Hence, every student needs to have a minimum of 80% classroom
attendance to sit for final exam.
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 D. Assignment Policy
Students must submit the article review and the case on or before the stipulated time provided by the
instructor. Overdue and copied submissions will not be acceptable and eventually rewarded no
marks.
E. Student assessments:
Details of the assessment techniques that will be applied in the course progress are summarized below
MODE OF ASSESSMENT
No Mode of Assessment Points to be allotted (%)
1 Article reviews with presentation (Group) 20
2 Case analysis (Individual cases) 30
4 Final Exam 50
Total 100
1. Article review Guideline
▪ The objective of reviewing articles is to thoroughly read and understand the subject under
review, summarize, draw the strengths and weaknesses of the article and comment (criticize
& appreciate) it finally.
▪ The review is a group assignment
▪ Submission date: (In consultation with students)
▪ Marking: 20
▪ Articles for review are the following.
Ball, R., & Brown, P. (1968). An empirical evaluation of accounting income numbers. Journal of
accounting research, 159-178.
Mihret, D.G, James, K., & Mula, J. M. (2012). Accounting professionalization amidst alternating
state ideology in Ethiopia. Accounting, Auditing & Accountability Journal, 25(7), 1206-
1233.
Mian, S. L., & Smith Jr, C. W. (1990). Incentives for unconsolidated financial reporting. Journal
of Accounting and Economics, 12(1-3), 141-171.
Holthausen, R. W. (1990). Accounting method choice: Opportunistic behavior, efficient
contracting, and information perspectives. Journal of accounting and economics, 12(1-3),
207-218.
Holthausen, R. W., & Leftwich, R. W. (1983). The economic consequences of accounting choice
implications of costly contracting and monitoring. Journal of accounting and economics, 5,
77-117.
Whittred, G. (1987). The derived demand for consolidated financial reporting. Journal of
Accounting and Economics, 9(3), 259-285.
Your critique should include some basic information:
Part I: General information
▪ Article Title: Find from the article
▪ Name(s) of the author(s): Find from the article
▪ Publication Information: Volume, Issue, Date, Page Numbers, find from article
▪ Reviewer: This is you!
Part II: Summary of the article

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 • Include a synopsis or summary of the article. This must be in your own words-DO NOT COPY
FROM THE ARTICLE!!!
Part III: Analysis and Synthesis:
Here is where you actually "review" the article.
• What are the most important conclusions of the article or the most important aspects from your
perspective?
• Are the results in congruence with the theoretical views discussed in the class?
• Any special issues about the study subject/s that make the result different from the theoretical
perspectives?
Part IV: Hypothesis Comparison: you are supposed to go beyond the article for this part.
• How can you compare/contrast the information about financial accounting in the article with
other theories?
• Is there a theory that would use entirely different discourse than the one studied in the article? Part
V: What part of the article did you think was most important to help you understand finance better?
• How do you relate the issues in the article with the business environment of Ethiopia?
• Are there points in the article with which you agree or disagree? Why?
• What suggestion(s) from this article will help you to become a better professional?
• Do you already do some of the things suggested in this article? Could you do them more often?
Part VI
• Is it applicable in Ethiopian context?
Part VII: Quality Checklist
• Have you organized the article review in a logical fashion with ideas clearly and concisely stated?
• Does all information follow correct bibliographic format?
• Does the summary include a brief explanation of the article that includes the author's point of
view?
• Does the critique of the article include evidence of bias, your own or the author’s, identified the
pros and cons of the article, and indicates my recommendation?
• Did you summarize your personal response in a concluding statement?
2. Cases
• Will be provided by the instructor after completing the chapter from which the case is
developed.
• Objective: to enhance students understanding of the subject matter by solving cases
• They are individual assignments
• Must be handwritten
• Submission: (In consultation with students)