School of Management and Entrepreneurship, Shiv Nadar IoE

Dadri, Gautam Buddha Nagar, Greater Noida, 201314

Programme: BMS & BSc (Research) in Economics & Finance

Name of the course: Introduction to Financial Accounting
Course Code: FAC 102
Credits: Three Credits
Core/Elective: Core
Number of Sections: Three
Semester: Monsoon 2023
Course instructor:
Prof Ankur Mehra, Assistant Professor, Shiv Nadar University – L1 & L2
Prof Shivangi Gupta, Visiting Faculty, Assistant Professor, OPJGU – L3

Overview
After completing this course on Introduction to Financial Accounting (FA), students would have a
general understanding of accounting concepts and be able to converse in the language of financial
statements. They should be able to appreciate the content of annual reports released by listed firms.
This course will also help undergraduate students to understand financial terms used in various
business newspaper.
Introduction to Financial Accounting is the first course in accounting. It focuses on accounting
policies, accounting mechanics and financial analysis. The learning in each session would depend
crucially on ideas introduced in previous sessions.
Companies communicate economic and financial information to firm’s investors and other
stakeholders through corporate financial reports. Financial statements such as Income Statement,
Balance Sheet and Cash Flow Statement form the core of the annual report. Companies in India
follow Indian Accounting Standards (IndAS) to prepare these statements and accounting is viewed
as the business language used by companies to communicate with investors. It is vital for every
business manager to understand accounting language to be able to assess how a decision will impact
the firm’s financial health. A business manager must be able to proficiently analyse financial
statements and evaluate the firm’s financial performance. They should be able to answer questions
such as how much money must be raised to meet the capital expenditure, how much inventory a
firm must hold, will the firm be able to repay its debts and others.
Expected Outcome
At the end of this course students should be able:
• Understand the process through which transactions are recorded, and financial statements
are prepared

• Understand the basic structure of the balance sheet, the profit and loss statement and the
cash flow statement.

• Develop mastery of concepts and language of accounting and financial statements so they
can be used as useful management tools for communication, monitoring and resource
allocation.
• Be able to analyse the financial performance of listed companies.

Topics
• The objective of corporate financial reporting, including financial statements

• Users of financial statements

• Accounting equation and the structure of the balance sheet

• Process for recording transactions in Journal Proper, Ledger and Trial balance

• Preparation of profit and loss account, balance sheet, statement of retained earnings and
cash flow statement

• Understanding financial statements of limited liability companies

• Tools & Techniques for analysing financial statements.

Main Text:
• “Financial Accounting” by Libby, Libby & Hodge, Indian Edition, Mc Graw Hill, 9th
Edition; ISBN: 978-93-5316-651-9
Reference Text:
• “Financial Accounting” by Kimmel, Weygandt & Kieso, International Student Version,
Wiley Publications, 7th Edition; ISBN: 9788126551262
• Accounting: Texts and Cases – The Financial Accounting Chapters, 13th Edition, By
Robert Anthony and David Hawkins and Kenneth A. Merchant and Prakash Singh
• Ashish K Bhattacharya (2018) Corporate Financial Reporting and Analysis, PHI
Learning, India; ISBN: 978-9387472990
• Ashish K Bhattacharya (2022) First Course in Financial Accounting (forthcoming book)

Pedagogy: Lectures, Cases, Problem Solving Sessions, Quizzes and Project Submissions
Evaluation
• Two Announced Quizzes …........................20%

• Mid-term Examination………………….…30%

• Project Report..............................................20%
• End-term examination……………..............30%*
*AACSB PLO 3.2 will be assessed through a dedicated question in the End-term Exam

Office Hours

Prof Ankur Mehra: Wednesday 3 PM to 4 PM & Thursdays 10 AM to 11 AM

Prof Shivangi Gupta:

Important Instruction to Students

• Project: A group project demonstrating your understanding of the use and interpretation
of financial statements is required to be completed. The instructor takes no responsibility
in monitoring the dynamics of each group. A separate document with detailed instructions
on the project will be shared in due time.

• Preparing for class: You should realise that you are in a University. It is necessary to read
and become familiar with the materials assigned for each session before you come to class.

• Cases: Case studies are an important learning component of this course. There are no case
submission expected from you for this course. However, questions based on cases are likely
to be asked in the quizzes and exams. If applicable, it is important for you to read and
analyse assigned cases before coming to the class.

• Academic integrity: This is taken very seriously. Any violation of the ethical code of
conduct during any component of the course would necessitate a minimum course grade D
or F.

• Course Coverage: Course outline is indicative in nature and is subject to change. Any
major change in the course outline will be communicated to students in class.

• Sessions: Given the difficulty level of the course, significant pre-work is expected from all
students. Attendance in all sessions are mandatory.

• Readings: Introduction to Financial Accounting is a contemporary course. You are

expected to keep yourself updated with the latest in the business world and the financial
markets.

• Class Participation: You are expected to contribute to the class discussion by bringing in
your understanding of various concepts and how they related to the field of finance and
business.
 COURSE OUTLINE

Session Description
1-2 Brief overview of the course, An Introduction to Financial Accounting, Primary
Form of Business Organizations, Users and Principles Uses of Accounting, Three
forms of business activities, Introduction to Financial Statements, Content and
Purpose of each Financial Statement, Accounting Cycle & Process, State the
Basic Accounting Equation, Other Elements of the Annual Report
3-5 Apply Accounting Equation to understand the impact of selected transactions on
Income, Expenses, Assets, Liabilities and Shareholder’s Net worth Meaning of
Assets, Liabilities, Equity, Income, Expenses, Dividend, Retained Earnings,
Qualitative characteristics of Accounting Information, A look through an Annual
Report, GAAP - Principles and Concepts - Separate Entity, Going Concern,
Money Measurement, Accounting Period, Materiality, Realisation, Matching,
Conservatism, Historical Cost, Fair Value

6-8 Understand which accounts are affected in a transaction, Rules of debiting and
crediting an account, Journal entries of transactions, Accrual Accounting
Adjustment– Type 1 & 3, Accrual Accounting Adjustment– Type 2 & 4,
Adjustment and closing entries under accrual accounting, Adjustment and closing
entries under accrual accounting, Ledger Accounts and Trial Balance

9-10 Statement of profit and loss (Income Statement), Product Cost versus Period Cost,
Net Sales, Cost of Goods Sold, Gross Profit, Operating Expenses, Operating
Income / Profit, Non-Operating Income, Earnings / Profit before Interest and
Taxes, Interest Expenses, Earnings / Profit before Taxes, Tax Expenses (Current
tax and Deferred tax), Net Income / Profit, Income/ Profit for Equity holders,
Basic and Diluted EPS

11-13 Prepare Balance Sheet, Tangible Fixed Assets (Property, plant and equipment) net
of Accumulated Depreciation, Right-of-Use assets, intangible assets,
Investments, Receivables net of Allowance for Doubtful Debt, Current Assets &
Liabilities, Net Working Capital, Long-Term Liabilities (Deferred tax and
Leases), Total Borrowings (Short & Long Term), Total Liabilities, Net Worth
(Preference Shares, Equity Shares, Bonus Shares, Stock Split and Share
Buyback), Capital Employed, Introduction to the Schedule III – Part II of the
Companies Act 2013
 14-16 Trend Analysis and Common Size Statements, Financial Ratios including Du
Pont Analysis
Financial Statement Analysis – Relaxo Footwear
17-19 Introduction to Cash Flows Statement, Cash Flows Statement – Direct, Cash
Flows Statement – Indirect Method
20-22 Provisions for the historical cost of tangible fixed assets (Property, plant and
equipment) and ascertain the historical cost of tangible fixed assets, Provisions for
Depreciation and Amortization and compute Depreciation (SLM & WDV only),
Provisions for impairment of tangible fixed assets, test impairment and ascertain
impairment loss & reversal of impairment loss, Provisions for tangible fixed asset
retirement/disposal and compute the gain or loss on retirement/disposal, Impact of
all the above on financial statements and ratios.

23-24 Provisions on Inventory, Value of COGS and Closing Inventory, FIFO, LIFO, &
Weighted Average Cost methods, Ascertain the impact of all the above on
financial statements and ratios
25-26 Understand and apply the provisions on Revenue Recognition as per IndAS 115,

Revenue Recognition for Loyalty Points, bundled offerings and other mini-cases,
Understand Receivables and Accounting for uncollectible accounts

26-27 What financial reporting doesn’t tell us? Why valuations of Digital companies
defy financial statements? Tech behind Financial Accounting & Future of
Financial Accounting, Course Wrap-up

Course instructor: Prof Ankur Mehra

About the Instructor:
Prof Ankur holds doctorate in Finance & Control from Indian Institute of Management Calcutta.
Before pursuing his doctorate, Ankur completed his Master of Finance & Control from Department
of Financial Studies, University of Delhi and BBA (International Business) from Institute of
Management Sciences, University of Lucknow. Ankur qualified UGC’s Junior Research
Fellowship in Management in December 2012.
Email ID: ankur.mehra09@snu.edu.in; Mobile Number: +91 9903831354
Office: ‘B’ Block, 220F, Shiv Nadar University
Course instructor: Prof Shivangi Gupta
About the Instructor:
Shivangi Gupta is a doctoral candidate in the area of Finance & Control at the Indian Institute of
Management Calcutta. In her dissertation on entrepreneurial finance, she explores the vast startup
financing ecosystem by studying diverse and often neglected entrepreneurial capital sources and
ecosystems and their market impact. Her research has been accepted and presented at several
reputed international and domestic conferences. Her research interests lie at the intersection of
corporate finance and entrepreneurship. Prior to her Ph.D., Shivangi attained her Bachelors in
Business Studies from Shaheed Sukhdev College of Business Studies, University of Delhi, and
Masters in Commerce from Department of Commerce, Delhi School of Economics, University of
Delhi, with a specialization in finance. She is also a recipient of the UGC – Junior Research
Fellowship in commerce in 2015.

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