Key Topics in Financial Accounting (2235.YR.005792.1)

General information

Type:	OPT	Curs:	1	Period:	S semester
ECTS Credits:	3 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Year 1	Petya Platikanova	Economía, Finanzas y Contabilidad	ENG
Year 1	Soledad Moya Gutierrez	Economía, Finanzas y Contabilidad	ENG

This course is restricted to MSc in Finance students.

Students should have basic accounting knowledge acquired from previous courses.

This course builds upon the knowledge gained in Financial Analysis and Reporting. It emphasizes the relevance of financial information and its accurate interpretation in decision-making. Because the financial information can be presented in various formats, it requires a comprehensive examination to extract meaningful insights. In this course, we will examine and practice critical considerations in financial analysis with the objective to develop expert knowledge on the topic.

The Key Topics in Financial Accounting (KTFA) course focuses on critical aspects in financial analysis. Financial Reporting and Analysis in the first term (Master in Finance) introduced the main issues related to the analysis of investment, financial and operating decisions. In this course, we will build on this course to deepen financial analysis knowledge. More specifically, we will integrate financial analysis with a focus on multinational corporations, financial instruments, executive compensation and corporate taxation. The course will provide insights into the use and interpretation of financial information coming from alternative sources (e.g., financial statements, footnote disclosure, non-financial information etc.). The course will also introduce and discuss a relevant topic in accounting such as ESG reporting.

The learning objectives of the course are the following:

- Be familiar with the main principles that govern the preparation and presentation of financial statements;
- Understand how principles and accounting policy choices may affect the financial statements and reflect the underlying economic of a company;
- Learn how to integrate different accounting information in order to provide solutions to accounting and financial reporting issues;
- Appraise corporate disclosure policies and identify situations in which managers may be biasing their reporting and communication.

1. Business Combinations and Consolidation Full consolidation and Equity Method. Economic and Financial Internal transactions: Tangible and intangible assets, Inventories, Dividends, Loans. Impact on the Consolidated Financial Statements

2. Foreign Currency Accounting methods for operations and transactions in foreign currency both for separate and consolidated financial statements. Presentation vs Functional currency. Disclosures required.

3. Financial instruments Accounting for financial instruments. Disclosure and interpretation of financial footnotes related to investment in financial instruments. Hedging policy.

4. Employee compensation Accounting for employee compensation, including stock options and pension benefits. Role of performance-based compensation on real business decisions and firm value.

5. Corporate taxation Accounting for income taxes. Tax avoidance: effects on business decisions and firm value.

6. Sustainability Reporting CSRD and the new European Reporting Sustainability Standards (ESRS). Environmental, Social and Governance disclosures. First developments and impact on sustainability reporting of European companies

7. Sustainability Assurance The new requirements for assurance in Europe. Limited vs Reasonable assurance. Double materiality concept. Sustainability engagement scopes and impact on credibility.

The course combines theoretical lectures with examples, cases and academic research outputs to help students deepen their understanding of the core concepts in financial accounting. Participants will work on examples and cases that will allow them to integrate concepts and standards in order to understand the financial implications, and provide solutions to financial reporting issues. In addition, participants will learn from experts/researchers how companies deal with the most relevant and complex topics derived from accounting policies and corporate governance.

E-books:
Wiley IFRS 2015: Interpretation and Application of International Financial Reporting Standards
PKF International Ltd, 2015 | Wiley

International Financial Reporting Standards
IFRS Foundation
Official Pronouncements

Financial Statement Analysis and Security Valuation. By Stephen H. Penman (Columbia University)
McGraw-Hill Education; 5th Edition (2013)


Additional bibliography:
Consolidated Financial Statements: a step-by-step approach. P. Mahony & N. MacLochlainn. 3rd Edition (2017)
International Financial Accounting and Reporting. Connolly, Ciaran (2013). 4th Edition. Chartered Accountants Ireland
Winning investors over. Baruch Lev. Harvard Business School Publishing Corporation (2011)
Handbook of Accounting and Sustainability. Research Handbooks on Accounting Series. Edited by Carol A. Adams. Edward Elgar Publishing. (2022)
The KPMG Survey on Sustainability Reporting. KPMG. (2020)
Giner, B. and Luque-Vílchez, M. (2022), "A commentary on the "new? institutional actors in sustainability reporting standard-setting: a European perspective", Sustainability Accounting, Management and Policy Journal

Group	Teacher	Department
Year 1	Petya Platikanova	Economía, Finanzas y Contabilidad
Year 1	Soledad Moya Gutierrez	Economía, Finanzas y Contabilidad