Lesson Plan Financial Accounting

Teaching guide for the course:

FINANCIAL ACCOUNTING I

Degree program: Degree in Business Administration and Management

Course 2012‐2013

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Teaching guide for the course "Financial Accounting I"

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Teaching Guide

1. Information about the course

Name FINANCIAL ACCOUNTING

Subject ACCOUNTING

Module ACCOUNTING

Code 510101001

Degree awarded

Degree in Business Administration and Management

Study plan 2010

School School of Business

Type Mandatory

Academic term Annual Academic year First

Language English

ECTS 9 Hours / ECTS 25 Total workload (hours) 150

Hours for theoretical classes

First quarter: Monday (12‐14)/Friday (13‐14) Second quarter: Wednesday (12‐14)/Friday (12‐13)

Classroom 126

Schedule for practical classes

Location First floor

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2. Information about the instructor

Instructor Carmelo Reverte Maya

Department Accounting and Finance

Area of knowledge Accounting and Finance

Office location Office 1.42 B (first floor)

Tel: 968325925 Fax: 968325782

E‐mail: [email protected]

URL / WEB www.upct.es/defyc/crm/index.html

Office hours / Tutorials To define

Location during tutorials Office

Academic title Assistant Professor in Accounting and Finance

Teaching experience More than 10 years in courses such as: Financial Accounting, Cost Accounting, Financial Auditing, Firm Valuation, etc.

Areas of Research Market‐based accounting research, Corporate Governance, Corporate Social Responsibility, Firm Valuation, International Accounting

Professional Experience

Other topics of interest

mailto:[email protected]

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3. Description of the course

3.1. Presentation The subject Financial Accounting aims at introducing the student to the general aspects of the accounting language, getting to know the accounting problems concerning operations usually carried out by companies so as to elaborate reports that show the economic‐financial situation and the results of those operations.

3.2. Location on the study plan The course Financial Accounting I is an annual course that is offered during the first year of the Degree program in Business Administration and Management.

3.3. Description of the course. Adaptation to the professional profile Financial Accounting is the field of accounting related to the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, employees, government agencies, owners, and other stakeholders. Its main objective is the reporting of the financial position and performance of a firm through financial statements issued to external users.

3.4. How it relates to other courses Prerequisites and recommendations It is related to the rest of accounting courses, such as Financial Statement Analysis and Cost Accounting. There are no prerequisites.

3.5. Students with special needs Any student who has particular circumstances and may require special resources should let the professor know at the beginning of the quarter.

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4. Skills

4.1. Specific skills to be gained through the course a) Identify and analyze the requirements and objectives of accounting information.

b) Get to know the users of accounting information and their informative needs.

c) Get to know the different elements that configure the economic and financing structure of a company: assets, liabilities and equity.

d) Get to know the principles of double entry as a basic foundation for accounting, as well as the main accounting books (Journal and Ledger).

e) Get to know the accounting cycle through its different stages, ending with the Annual Accounts.

f) Get to know the regulations that affect accounting information, especially the Spanish General Accounting Plan.

g) Get to know the elements of net income (revenues and expenses).

h) Get to know the accounting treatment related with the economic and financial structure of a company.

i) Get to know the concept of depreciation, as well as its economic and financial significance.

j) Understand and assimilate the conceptual framework of accounting.

k) Elaborate and interpret the annual accounts.

4.2. General / Transversal Skills INSTRUMENTAL SKILLS

G01 Ability to analyze and summarize G02 Ability to organize and plan G03 Oral and written communication in the native language G04 Oral and written communication in a foreign language G05 Knowledge of computer programs and skills related to the field of study G06 Ability to search for and analyze information from different sources G07 Ability to solve problems G08 Ability to make decisions

PERSONAL SKILLS G09 Ability to work as a team G10 Ability to work in an interdisciplinary team

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G11 Ability to work in an international context G12 Developing skills in personal relationships G13 Ability to work in diverse and multicultural environments G14 Ability to critique and self‐critique G15 Ethical commitment at work G16 Work in stressful environments

SYSTEMIC SKILLS G17 Auto‐didactic skills G18 Ability to adapt to new situations G19 Creativity G20 Leadership G21 Initiative and entrepreneurial spirit G22 Quality driven G23 Sensitivity towards environmental and social issues

SKILLS FOR APPLICABILITY G24 Ability to put the knowledge into practice G25 Ability to search for information and do research G26 Design and management of projects G27 Ability to communicate economic issues

4.3. Specific skills related to the degree E01 Ability to manage and run a small company or organization, understanding

its competitive and institutional positioning and identifying its strengths and weaknesses E02 Ability to integrate in any functional area of a medium‐sized or large company or organization, and smoothly carry out any management task entrusted E03 Ability to evaluate the situation and the foreseeable evolution of the company based on the relevant records of information E04 Ability to issue consulting reports on specific situations of companies and markets E05 Ability to write up projects for the overall management or for the functional areas of the company E06 Ability to identify the sources of relevant economic information and its content in order to analyze and know the relevant economic environment for the company E07 Ability to understand the economic institutions as a result and to apply theoretical or formal representations of how the economy functions E08 Ability to derive relevant information from the data which is impossible for non‐professionals to know E09 Ability to regularly use information and communications technology in all professional tasks and activities E10 Ability to read and communicate in more than one language, especially in English E11 Ability to apply professional criteria based on the handling of technical instruments when analyzing problems E12 Ability to communicate fluently in their environment and work in a team

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4.4. Results expected from the learning At the end of the course, students will be capable of:

1. Efficiently analyzing and using financial information in the decision‐making process, which involves knowing and using the various financial accounting tools.

2. Knowing the accounting treatment concerning operations usually carried out by companies, so as to elaborate reports that show the economic/financial situation and the results of those operations.

3. Being in charge of a company’s accounts, once they have studied the rest of related subjects in the curriculum.

5. Content

5.1. Content according to the study plan The subject Financial Accounting aims at introducing the student to the general aspects of the accounting language, getting to know the accounting problems concerning operations usually carried out by companies, so as to elaborate reports that show the economic‐financial situation and the results of those operations.

5.2. Theory: modules and didactic units

LESSON 1: CONCEPT OF ACCOUNTING

1.1. Concept and objectives of Financial Accounting

1.2. Users of the accounting information

1.3. Accounting classification

LESSON 2: THE ECONOMIC AND FINANCING STRUCTURE OF THE COMPANY

2.1. Accounting concept of equity

2.2. Components of the economic and financing structure 2.3. Average maturity period

2.4. The balance sheet

2.5. Types of financial balances

LESSON 3: ACCOUNTING REPRESENTATION: THE ACCOUNT AND THE ACCOUNTING BOOKS

3.1. The account as an instrument of representation and measurement

3.2. Technical terms of the accounts

3.3. Classification of the accounts and operating agreement

3.4. The double‐entry method

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3.5. Accounting books: Journal and General Ledger

LESSON 4: THE ACCOUNTING CYCLE

4.1. Start of the accounting cycle: opening inventory and opening entry

4.2. Development of the accounting process: record of the accounting events and trial balances

4.3. Closing of the accounting period: accounting regularization and the closing entry

4.4. The financial statements

LESSON 5: REGULATION OF ACCOUNTING IN SPAIN: THE GENERAL ACCOUNTING PLAN 5.1. Accounting in Spain: applicable regulations

5.2. The General Accounting Plan (GAP)

5.3. Accounting principles in the GAP

5.4. Model for presenting the balance sheet in the GAP

LESSON 6: INCOME AND EXPENSES: THE COMPANY PERFORMANCE 6.1. Income: concept and classification

6.2. Expenses: concept and classification

6.3. Model of presentation of the profit and loss account in the GAP

6.4. Accounting of employee expenses

6.5. Introduction to value added tax (VAT)

LESSON 7: ACCOUNTING TREATMENT OF INVENTORY 7.1 Types of inventories: commercial companies and industrial companies

7.2 The speculative account of merchandise in the GAP

7.3 Valuation of stocks

7.3.1 Valuation of entries: transformed and non‐transformed stocks

7.3.2 Valuation of the cost of outflows: WAC and FIFO methods

7.4. VAT in business transactions: discounts, advances and returns

7.5. Accounting treatment of returnable packages and containers

7.6. Stock impairment

7.7. Accounting treatment of foreign currency

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LESSON 8: ACCOUNTING TREATMENT OF CREDITORS AND DEBTORS FROM TRADE OPERATIONS 8.1 Receivable accounts

8.2 Doubtful accounts: systems for estimating insolvency

8.3 Trade receivables

8.3.1 The banking discount of bills

8.3.2 Collection management/negotiation of bills

8.3.3 Non‐payment of trade bills

8.4 Accounts payable

8.5 Accounting for differences in foreign currency in credits and debits

LESSON 9: ACCOUNTING TREATMENT OF FINANCIAL ACCOUNTS

9.1 Concept of financial accounts in the GAP

9.2 Accounting representation of the cash flow: cash flow in foreign currency

9.3 Accrual adjustments

LESSON 10: ACCOUNTING TREATMENT OF NON‐CURRENT ASSETS

10.1 Concept and classification of non‐current assets

10.2 Valuation of tangible non‐current assets

10.2.1 Initial valuation

10.2.2 Specific issues: Improvements/enhancements and capitalization of financial expenses

10.3 Intangible non‐current assets

10.4. Value corrections of non‐current assets: depreciation, impairment losses and irreversible losses

10.5. Disposal of non‐current assets

LESSON 11: THEORY OF ECONOMIC DEPRECIATION

11.1. Analysis of depreciation

11.2. Economic and financial meaning of depreciation

11.3. Basic elements of a depreciation plan

11.4. Methods for calculating the annual depreciation quota: constant vs variable quotas

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LESSON 12: ACCOUNTING TREATMENT OF PERMANENT FINANCING

12.1. Concept of permanent financing in theGAP

12.2. Owners’ equity: concept

12.2.1 Capital

12.2.2 Reserves

12.2.3 Revenue pending allocation

12.3. Capital subsidies

12.4. Long‐term external resources: bank loans

12.5. Liability provisions

LESSON 13: THEORY OF NET INCOME

13.1. The company’s net income

13.2. Relativity of net income

13.3. Profit tax

5.3. Program of practical application

5.4. Program summarized in English (optional)

5.5. Detailed planning of the teaching units (optional)

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6. Teaching methodology

6.1. Formative activities

Activity teacher’s duty student’s duty ECTS

In class: taking notes and asking questions 2.7 Theory classes

Presentations using the lesson’s method.

At home: study of the matter 3.3

In class: active participation in case study 1.5 Solving practical

cases

Students’ participation is fostered through case‐study in groups. At home: resolution of proposed cases 1.1

In class: clearing doubts at tutorial time 0.1

Tutorials Clearing theory doubts, practical case study and cooperative learning tasks.

At home: use of e‐mail or the virtual classroom to ask questions

0.1

Exams Written evaluation In class: attendance to official exam 0.2

Total: 9 ECTS

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7.1. Evaluation techniques

Instruments Procedure / criteria Weight Generic skills (4.2) evaluated

Results (4.4) evaluated

Written exams

Two exams will be written during the course. The first one will consist of a partial exam (optional) after the first quarter which, if passed, will cancel the theory taught in that quarter. The second exam will take place at the end of the course. Both exams (partial and final) will consist of two parts: a theoretical part (test) and a practical part.

Theoretical part (test): 40% mark (eliminatory if a minimum note of 4 points isn’t achieved)

Practice part: 60 % remaining

G01, G02,G07,

G09 1,2,3

Student’s attendance and active participation in class

Personalized monitoring An extra 0,5 points (if any)

G10, G22 1,2,3

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7.2. Control and follow‐up mechanisms

Attendance to class and active participation: An extra 0,5 points can be achieved by this concept. This will be considered provided that a minimum note of 4 points in the test is achieved.

Exam: a theoretical‐practical written test will be carried out, consisting of two parts: a test (weight: 40%) followed by working out a practical case on the subject (weight: 60%).

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7.3. Expected results / learning activities / assessment of results (optional)

Results expected from the learning (4.4)

Theo

ry classes

Class exercises

Projects and

rep

orts

Test on theo

ry

Prob

lem solving

Class attend

ance

Group

project

Form

ative evalua

tion

1. Knowledge of the different basic techniques for performing a descriptive analysis of data

x x x x x x x x

2. Ability to collect, organize and analyze data from a descriptive point of view x x x x

3. Ability to make decisions based on analyzing the information x x x x x

4. Ability to work in a group, both on specific issues of the subject as well as on multidisciplinary issues

x x x

5. Ability to communicate the results and to draw up descriptive and quantitative types of technical reports

x x x x x x

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8. Distribution of the student´s workload ON-CAMPUS ACTIVITIES

FIRST QUARTER

Conventional Non-conventional OFF-CAMPUS ACTIVITIES

Week

Topics or activities (visits, midterm

exam, etc.)

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1 Presentation, Topic 1 3 3 3 2 Topic 1 3 3 1 1 4 3 Topic 2 1 1 2 1 1 2 1 1 2 6 4 Topic 2 2 2 1 1 2 4 5 Topic 2 3 3 1 1 2 1 1 2 7 P.2 6 Topic 3 2 1 3 2 1 3 6 7 Topic 3 1 1 1 1 1 3 1 1 2 4 8 P.3 8 Topic 4 1 1 2 2 2 4 6 9 Topic 4 3 3 1 1 2 2 2 4 9 P.4

10 Topic 5 2 2 2 1 3 2 1 3 8 11 Topic 5 y 6 1 1 2 3 2 5 7 P.5 12 Topic 6 1 1 2 2 2 4 6 13 Topic 6 1 1 2 2 1 3 2 2 4 9 P.6 14 Topic 7 2 1 3 2 1 3 6

15 Review 2 2 1 1 1 3 3 2 5 10 P.7

Exams 8 8 8

Miscellaneous

TOTAL HOURS 22 13 35 9 7 2 18 33 18 3 54 107

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ON-CAMPUS ACTIVITIES

SECOND QUARTER

Conventional Non-conventional OFF-CAMPUS ACTIVITIES

Semana

Topics or activities (visits, midterm

exam, etc.)

Theo

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1 Topic 7 2 1 3 2 1 3 6 2 Topic 7 1 2 3 1 1 2 2 1 3 8 P.7 3 Topic 8 1 1 2 1 1 2 1 3 6 4 Topic 8 1 1 2 1 1 2 1 3 6 5 Topic 8 1 2 3 1 1 2 4 2 2 4 11 P.8 6 Topic 9 2 1 3 2 1 3 6 7 Topic 9 1 1 1 1 2 4 2 2 4 9 P.9 8 Topic 10 2 1 3 2 1 3 6 9 Topic 10 2 2 1 1 2 1 3 6

10 Topic 10 3 3 1 1 2 2 2 4 9 P.10 11 Topic 11 1 1 2 1 1 2 2 4 7 P.11 12 Topic 12 2 1 3 2 1 3 6 13 Topic 12 1 2 3 2 2 4 7 P.12 14 Topic 13 1 2 3 2 2 4 7 P.13

15 Review 1 1 1 1 2 4 2 1 3 8

Exams 10 10 10

Miscellaneous

TOTAL HOURS 17 20 37 7 6 7 20 40 21 61 118

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9. Resources and bibliography

9.1. Basic bibliography REVERTE, C., BASTIDA, F. y MADRID, A. (2011): INTRODUCTION TO FINANCIAL

ACCOUNTING (2007 SPANISH GENERAL ACCOUNTING PLAN). REY POMBO, JOSÉ (2008): CONTABILIDAD GENERAL, EDITORIAL PARANINFO. LEGISLATION

REAL DECRETO 1514/2007, DE 16 DE NOVIEMBRE, POR EL QUE SE APRUEBA EL PLAN GENERAL DE CONTABILIDAD. En inglés: http://www.icac.meh.es/Documentos/CONTABILIDAD/PGC%20Ingles.pdf

REAL DECRETO 1515/2007, DE 16 DE NOVIEMBRE, POR EL QUE SE APRUEBA EL PLAN

GENERAL DE CONTABILIDAD DE PEQUEÑAS Y MEDIANAS EMPRESAS Y LOS CRITERIOS CONTABLES ESPECÍFICOS PARA MICROEMPRESAS.

9.2. Additional bibliography WANDEN‐BERGHE LOZANO Y OTROS (2008): CONTABILIDAD FINANCIERA. NUEVO PLAN

GENERAL DE CONTABILIDAD Y DE PYMES, EDITORIAL PIRÁMIDE. CERVERA Y OTROS (2008): CONTABILIDAD FINANCIERA (ADAPTADA AL NUEVO PGC),

CENTRO DE ESTUDIOS FINANCIEROS.

9.3. Online resources and other resources http://moodle.upct.es/

http://www.icac.meh.es/Documentos/CONTABILIDAD/PGC%20Ingles.pdf

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Lesson Plan Financial Accounting

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