Course Learning Objectives
The purpose of this course is to provide MBA students with the key points to understand how financial accounting and reporting are used in business as inputs for decision-making. The concepts and topics covered in the course presume that participants have a thorough understanding of the material covered in foundations weeks. The knowledge acquired in foundations weeks about the features of and the interrelationships among the fundamental financial statements will be used in this course to better understand some of the most relevant regarding financial accounting and reporting. As it portrays the financial situation and performance of a company, financial accounting appeals to a wide audience including present and potential investors, creditors, government agencies and management. The course will develop the criteria, procedures and formats used to represent and report some of the most significant components of the financial statements (e.g. revenue recognition, cost of goods sold, operating assets, inter-corporate investments, capital sources), so that students are well equipped to properly interpret the meaning of the reported information and can subsequently engage in financial analysis.
The course aims to develop analytical skills so that participants are well equipped to:
- To analyze some of the most significant individual components of financial statements and the different ways in which they can be presented as well as to gain an appreciation for the impacts different accounting methods may have in this regard. Most of the issues discussed here are valid in most countries and in most sets of accounting standards. In those cases where particular concepts or practices covered here might vary from one country to another, we will take International Accounting Standards / International Financial Reporting Standards (IAS / IFRS) as the reference framework.
- To provide awareness regarding some common financial accounting and reporting misunderstandings and minefields.
- To extend the concepts and tools covered in foundations weeks in order to have an overview of the representation provided by consolidated financial statements (statements at group level), understanding the differences between individual financial statements (i.e. firms) and consolidated financial statements (i.e. corporations or groups).
- To provide a solid grounding for properly engaging in financial analysis (object of the subsequent Finance course)
Bibliography
Stolowy, H and Ding, Y. (2017). Financial Accounting and Reporting: A Global Perspective (5thd ed.). Cengage.
Weygandt, J.J., Kimmel,,P.D. and Kieso, D.E. (2015). Financial Accounting (IFRS edition). (3rd ed.). Wiley
