Synopsis of Module
This module is concerned with financial reporting by individual companies and groups of companies within the UK. It aims to look critically at the role of financial reporting within society and the ways in which practice is governed by law and accounting standards. Particular accounting issues will be looked at in greater depth.
At the end of the module students will have a firm grasp of current practices and issues in financial reporting by companies and groups of companies and the effectiveness of the instruments which regulate corporate financial reporting. Students will be able to demonstrate their knowledge by critically discussing particular issues and by processing of numerical data.
Students will also be able to interpret and critically evaluate the effectiveness of current reporting practices and the role of corporate financial reporting within society.
The module will be delivered by means of lectures and student centred seminars. There will be significant directed preparation requirements for seminars which will enable students to check their understanding and progress to date. In addition, students will be expected to undertake independent reading and learning.
Aims of Module
The aim of this module is to enable students to:
| 1. | understand the purpose of corporate financial reporting in society. |
| 2. | understand the legal, professional and theoretical framework for financial reporting by companies. |
| 3. | prepare, appraise and analyse the primary financial statements of individual companies and groups of companies for both internal and external purposes. |
| 4. | understand and assess current solutions for particular reporting issues. |
Learning Outcomes
At the end of the module the student will be able:
| 1. | Discuss and evaluate the UK financial reporting environment. |
| 2. | Prepare company financial accounts in accordance with accounting requirements. |
| 3. | Analyse and appraise UK corporate financial statements and reports. |
| 4. | Prepare group financial statements in accordance with the UK legal and regulatory framework. |
| 5. | Discuss significant differences between UK and international accounting standards. |
| 6. | Demonstrate and evaluate current techniques for dealing with particular accounting issues. |
Outline Syllabus
The corporate reporting environment
| • | The history of corporate reporting and its regulation; the true and fair view, stewardship; decision usefulness of accounting data. |
| • | The current regulatory framework – ASB, FRC, UITF and the RP; EU and IASB; UN and OECD |
Corporate reporting issues
The legal and professional requirements for corporate reporting:
| • | Formats for published accounts |
| • | Accounting concepts and conventions |
| • | Reporting financial performance |
| • | Post balance sheet events |
| • | Provisions, contingent liabilities and contingent assets |
| • | Foreign exchange transactions, including branches and equity investments |
| • | Cash flow accounting and cash flow statements |
| • | Research and development |
| • | Accounting for fixed assets, depreciation, revaluation and impairment |
| • | Fair value accounting and the substance of transactions |
| • | Accounting for finance and operating leases by lessors and lessees |
Accounting for groups of companies
| • | history and purpose of group accounting |
| • | the current legal and regulatory framework [Companies Act, Accounting standards] |
| • | parents and subsidiaries: vertical groups: associated undertakings: overseas subsidiaries: joint ventures |
| • | the preparation of group accounts (including cash flow statements) using acquisition accounting |
| • | adjustments for intercompany transactions, dividends and indebtedness |
| • | group earnings per share |
| • | piece-meal acquisitions of participating interests |
| • | partial and total disposals of participating interests |
| • | the treatment of overseas participating interests |
| • | group accounting policies, exclusion of subsidiaries and exemptions from the requirement to prepare consolidated financial statements. |
Advanced interpretation techniques: online sources of data and financial databases, limitations of published information.
The module will also acknowledge other influences on and current developments in corporate reporting and voluntary disclosure, including convergence issues.
Summative assessment
Assessment A: Unseen Closed Book Written Exam (2 hours)
The weighting of this assessment is 50%
Assessment B: Closed Book Written Exam (2 Hours)
The weighting of this assessment is 50%
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