Financial accounting is the fundamental language used to express the economic realities of complex financial topics. Understanding this language is crucial for converting financial statement data into decision-enhancing information and expressing strategic business plans and investment ideas in a powerful and convincing way. |
This course is the first of two complementary courses to introduce students to corporate financial reporting following International Financial Reporting Standards (IFRS) and its embedding in international capital markets. As such, the course is designed to make students familiar with the most important IFRSs and will benefit any student who desires to increase his or her ability to prepare and/or evaluate the information presented in publicly available financial statements. With its focus on basic principles of IFRS as well as specific standards and their application, the course will also lay the foundations for more advanced courses (e.g., course No. 324028 “Advanced Financial Accounting”).
Upon successful completion of this course, students will be able to:
- …explain and discuss the economic consequences of corporate financial reporting, the role of accounting information in capital markets, and the special role of IFRS on international capital markets.
- …apply and contrast accounting rules under IFRS for key topics in corporate financial reporting.
- …compare and evaluate the implications of IFRS accounting rules on an entity’s financial statement and the representation of the entity’s financial positions and financial performance.
Key element of the course is the analysis of relevant IFRS standards against the background of their informational impact on capital markets. We begin with a short discussion of the internationalization of accounting, the relevance of IFRS in this context and the effect of this internationalization and IFRS on capital markets. This introduction also covers more conceptual aspects of financial accounting such as the IFRS Conceptual Framework and fair value measurement. After this introduction the course will heavily focus on studying different key topics of financial accounting, such as revenue recognition, recognition and measurement of assets, accounting for leases, etc.. For each accounting topic, we will not only discuss relevant IFRS regulations, but also analyze these regulations with respect to their capital market relevance. To illustrate the application and implications of specific accounting standards, we will discuss exercises and small case studies, discuss current accounting practices of multinational entities and cover major research findings concerning the link between accounting and capital markets’ effects.|
Although there is no formal prerequisite to enroll in this course, the course assumes that students are comfortable with the materials covered in the introductory and intermediate financial accounting classes (e.g., course No. 324038 “Intermediate Financial Accounting”, or equivalent).
Picker/Clark/Dunn/Kolitz/Livne/Lofthus/van der Tas (2016). “Applying IFRS Standards”, 4rdedition, Wiley [ISBN 978-1-119-15922-3].
Assignments and final exam. Details will be announced in due time.