acc 380k.1, financial accounting standards and analysis i

SYLLABUS FOR ACC 380K.1 -- FALL 2002

Accounting 380K.1 – Fall 2002 Financial Accounting Standards and Analysis I for MPA’s and MBA’s

Class Monday and WednesdayHours: 12:00 noon – 2:00 (unique 02425) UTC 4.134

Professor: Lisa Koonce Email: [email protected] page: http://www.bus.utexas.edu/faculty/lisa.koonce/ConsultationLocation / Phone: CBA 4M.238 / 471-5576Consultation Hours: Anytime on blackboard discussion groups

Monday 2:30 – 5:00 p.m.Wednesday 3:00 – 4:30 p.m.(no Wednesday office hours on 9/18 and 10/2 – will be rescheduled to 9/19 and 10/3, respectively – 8:30 a.m. to 10 a.m.)

TA: Ainsley GaddisEmail: [email protected]: CBA 4.304AConsultation Hours: 3:00-5:30 Tuesday

2:30-4:30 Thursday

TA: Scott BighamScott also will help with the TA review sessions

CourseObjectives The course examines issues in financial reporting from both preparer and user perspectives. The

basic objectives of the course are:

(1) to learn about current financial reporting,

(2) to learn to reason about financial reporting problems in a forward direction (i.e., work forward from the data to journal entry to financial statement),

(3) to learn to reason about financial reporting problems in a backward direction (i.e., work backward from financial statement and footnote data to journal entry),

(4) to consider the larger context of financial reporting (beyond rules and requirements), including how bankers, auditors, company CEO’s and CFO’s, and Wall Street analysts think about financial reporting.

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http://www.bus.utexas.edu/faculty/lisa.koonce/


Required TextINTERMEDIATE ACCOUNTING, by Kieso, Weygandt & Warfield (10th edition).

Required Supplements CLASS NOTES: I have prepared a packet containing my class notes. The class notes will be available at the GSB Copy Center in the GSB Building on the first class day. These notes contain (1) my class notes, and (2) the "Additional Problems in Class Notes" indicated on the assignment sheet.

Based on feedback from students who have taken this course previously, your primary source of studying topics in this course probably will be these class notes. Students have indicated to me that they rely heavily on the class notes and homework problems to study for exams. Spending time reading every word in the textbook was not deemed as productive for three reasons: (1) we cover topics very quickly in this class and there is not much time to spend reading the textbook, (2) the textbook contains many accounting details that are not that important (i.e., they will never show up on exams), and (3) the textbook forces students to think only about current GAAP; many aspects of this course involve thinking about alternative perspectives, some of which are not GAAP. Heavy reliance on the textbook hinders performance in these aspects of the course. Thus, you are encouraged to use the textbook as a reference tool; read excerpts from the textbook as necessary. For most, reading the textbook on an as needed basis after we talk about a topic in class will work best. For others, reading it before class optimizes their performance in this class. DO WHAT WORKS BEST FOR YOU.

SOLUTIONS TO HOMEWORK PROBLEMS. This packet contains the solutions to homework problems.

READINGS. Available for purchase at the GSB Copy Center. You won’t be tested per se on the readings. They are very recent and very interesting articles from the popular press that pertain to our course topics.

Optional SupplementsOLD EXAM QUESTIONS. Available for purchase at the GSB Copy Center. As we get closer to our exams in this course, I will tell you how my exams for this semester will be similar to or different from the questions in this packet.

BE SURE TO GET THE CLASS SUPPLEMENTS DESIGNATED FOR YOUR SECTIONS – 02425. I HAVE TWO OTHER SECTIONS OF THE COURSE FOR STUDENTS IN THE PPA PROGRAM AND THEIR MATERIALS DIFFER FROM YOURS.

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GradesThere will be two mid-term exams and one final exam. No make-up exams will be given. Medical emergencies and family emergencies are the only valid reasons that will be accepted for missing an exam. You must provide supporting documentation (e.g., signed note from a physician) if you do miss an exam. If you are excused from an exam, the other two exams will be re-weighted (e.g., if you miss the first exam, the second and final exams will be re-weighted). If you do not have a valid reason for missing an exam, you will receive a zero on the exam, which usually implies failing the course.

Exam 1 290 points 29%Exam 2 330 points 33%Final Exam 380 points 38%TOTAL POINTS 1000 points 100%

For the three exams, you can bring a 4 x 6 inch index card “cheat sheet.” Writing on both sides is acceptable. The final exam will cover some topics from the first 2/3rds of the course.

Class Attendance and HomeworkIn my opinion, class attendance and homework are the two most important components of this course. Based on my prior experience, those students who generally do very well in this class are those who attend class and those who don't do as well are those who tend to skip class. Importantly, there is a lot of material in ACC 380K.1 and I make every effort during class to indicate what is important in the real world (and, thus, this class). Plus, much of what I cover in class is not in the textbook. Consequently, knowing what to study for the exams is much easier if you've been in class on a regular basis. Trying to figure out on your own some of the course material is just too tough – year after year, students tell me that the easiest way to get a grasp on the material is to come to class.

Since intermediate accounting (the content of ACC 380K.1) is problem oriented, doing the homework problems on a timely basis is a necessity. Exam performance is directly related to systematic preparation, which includes timely completion of the homework assignments. Since this course moves very quickly, you should make an effort not to fall behind on homework.

DeficienciesI would highly recommend that those of you who feel in any way nervous about your skills at making journal entries to read through Chapter 3 of the textbook and work some problems. Work through as many as you need to feel comfortable with making journal entries. Suggested: E3-1, E3-8, E3-9, E3-16, E3-27, P3-1, P3-5, P3-8, P3-9, P3-11, P3-13, and P3-14. Solutions to these problems are in your homework solutions packet.

How do you know if you should be “nervous” about your journal entry skills? If you made anything but a high B or A grade in intro financial accounting, you should be nervous. If you struggled in intro, you will definitely struggle in this class.

Email and Course Web PageEach week on Wednesday afternoon, I will send an email containing announcements, upcoming events, etc. Doing so will avoid my spending time in class on these matters.

I have a course page on Blackboard. To access it, you’ll need a UT-EID. Go to http://courses.utexas.edu. Because I have multiple sections of a largely similar course offered to students in different programs, I have combined those multiple sections into one for purposes of this course web page. You may occasionally see some things on the course page that do not make sense for your section. I suspect you will be able to figure it out, but if there is any question, just ask me.

On the course page is a discussion group where you can post questions (and answers) as they pertain to this class – for example, class notes questions, homework questions, etc.

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http://courses.utexas.edu/


The University requires that I communicate the following about this course web page. In Fall 2002, web-based, password-protected class sites will be available for all accredited courses taught at The University. Syllabi, handouts, assignments and other resources are types of information that may be available within these sites. Site activities could include exchanging e-mail, engaging in class discussions and chats, and exchanging files. In addition, class e-mail rosters will be a component of the sites. Students who do not want their names included in these electronic class rosters must restrict their directory information in the Office of the Registrar, Main Building, Room 1. For information on restricting directory information see: http://www.utexas.edu/student/registrar/catalogs/gi00-01/app/appc09.html

Students with DisabilitiesThe University of Texas at Austin provides upon request appropriate academic accommodations for qualified students with disabilities. For more information, contact the Office of the Dean of Students at 471-6259, 471-4641 TTY.

Scholastic Dishonesty

Departmental Policy on Scholastic DishonestyThe Department of Accounting has no tolerance for acts of scholastic dishonesty. The responsibilities of both students and faculty with regard to scholastic dishonesty are described in detail in the department’s Policy Statement on Scholastic Dishonesty in the MPA Program and the Professional Program in Accounting. By teaching this course, I have agreed to observe all of the faculty responsibilities described in that document. By enrolling in this class, you have agreed to observe all of the student responsibilities described in that document. If the application of that Policy Statement to this class and its assignments is unclear in any way, it is your responsibility to ask me for clarification.

Application of Departmental Policy to Writing Assignments in this Course

EXAMSEach student is expected to independently complete the exams during the designated exam period. Each student should not refer to other students’ exam solutions or discuss the exam with other students during the exam period. Violation of this policy will be treated as an act of “scholastic dishonesty.” Evidence of non-independent work will be forwarded to the Dean of Students with a recommendation that a grade of “F” be assigned in the course.

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http://www.utexas.edu/student/registrar/catalogs/gi00-01/app/appc09.html


Date Chapter Topic Assignment C = case; E = exercise, P = problem (all from textbook)

W 8/28 None

Syllabus questions

The Bigger Picture

Start Risks & Uncertainties

C2-3, C2-5, C2-6, C2-10, E2-5, E2-7, E2-8

None

MINIMUM ADVANCE PREPARATION: Read Syllabus MAXIMUM ADVANCE PREPARATION: Read Syllabus

BECAUSE YOU COULD NOT OBTAIN THE COURSE READINGS PACKET IN ENOUGH TIME BEFORE THE FIRST CLASS TO READ THE THREE ASSIGNED READINGS PLEASE DO SO AFTER CLASS. THESE INCLUDE THE 6/24/02 FORTUNE ARTICLE, THE 5/13/02 BUSINESS WEEK ARTICLE, AND THE 5/20/02 BUSINESS WEEK ARTICLE. ALSO, READ PAGES 2-20 AND 34-51 FROM TEXTBOOK.

M 9/2 NO CLASS – LABOR DAY

W 9/4 5 + 24 Finish Risks and Uncertainties

If time, start Statement of Cash Flows

C13-6, C13-8, C13-10, E13-14, P13-11, Additional Problems in Class Notes A-E

MINIMUM ADVANCE PREPARATION: READ CAPITAL ONE’S ANNUAL REPORT – PAGES 3 THROUGH 41 – COPY OF THESE PAGES IN YOUR CLASS NOTES AT THE BEGINNING OF THE RISKS & UNCERTAINTIES NOTES. ALSO, READ 5/6/02 BUSINESS WEEK ARTICLE. (NOTE: READINGS PACKET IS SEPARATE FROM THE COURSE PACKET BECAUSE OF OVERLY COMPLICATED COPYRIGHT RESTRICTIONS BEYOND MY CONTROL.)

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 201-206, 670-682, 1389-1390, AND 1404-1405 FROM TEXTBOOK.

M 9/9 5 + 24

4 + 23

Statement of Cash Flows

If time, start Discontinued Operations, Extraordinary Items, Accounting Changes, and Restatements

E24-3, E24-4, E24-5, E24-6, E24-7, E24-9, E24-11, E24-12, E24-13, E24-14, E24-15, E24-16, P24-2, P24-3, P24-4, P24-8, P24-9, P24-10, Additional Problems in Class Notes A-H

NOTES: E24-9 and Problems E, F, G, and H are comprehensive, so don’t do these until we have gone through accounting changes and deferred taxes.

MINIMUM ADVANCE PREPARATION: YOU’VE HAD THE SCF TOPIC BEFORE IN INTRODUCTORY FINANCIAL ACCOUNTING (AND PROBABLY IN SOME FINANCE CLASSES TOO), SO I WANT YOU TO TRY TO WORK THE SCF PROBLEM IN THE CLASS NOTES (THAT WE WILL GO OVER IN CLASS) BEFORE WE HAVE CLASS. ALSO, READ 3/5/02 WALL STREET JOURNAL ARTICLE, 11/12/01 BUSINESS WEEK ARTICLE, AND 7/15/02 BUSINESS WEEK ARTICLE.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 206-212 AND 1309-1337 FROM TEXTBOOK.

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Date Chapter Topic Assignment C = case; E = exercise, P = problem (all from textbook)

W 9/11 4 + 23 Discontinued Operations, Extraordinary Items, Accounting Changes, and Restatements

C4-7, P4-3, P4-6, E23-2, E23-5, E23-17, P23-1, P23-2, P23-3, P23-5, Financial Reporting Problem – Intel, Additional Problems in Class Notes A – P

Do P23-3 and P23-5 but do them after we cover deferred income taxes.

MINIMUM ADVANCE PREPARATION: READ 5/27/02 BUSINESS WEEK ARTICLE, 11/26/01 BUSINESS WEEK ARTICLE, AND 2/5/02 NEW YORK TIMES ARTICLE.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 130-133, 140-153, 1254-1265, AND 1269-1275 FROM TEXTBOOK. ALSO, READ EXCERPTS FROM SFAS 144 AS TEXTBOOK DOES NOT HAVE DISCUSSION ON NEW STANDARD FOR DISCONTINUED OPERATIONS. DO NOT READ THE TEXTBOOK FOR DISCONTINUED OPERATIONS – OUT OF DATE.

M 9/16 4 + 23 Discontinued Operations, Extraordinary Items, Accounting Changes, and Restatements

See above.

W 9/18 20 Deferred Income Taxes C20-4, E20-3, E20-4, E20-9, E20-14, E20-17, P20-2, P20-6, Financial Reporting Problem – Intel, Financial Statement Analysis Case-Homestake,Additional Problems in Class Notes A – K

MINIMUM ADVANCE PREPARATION: READ PAGES 1058-1086 AND 1089-1096 FROM TEXTBOOK. DEFERRED TAXES TYPICALLY ARE QUITE HARD FOR STUDENTS, SO I WANT YOU TO READ THE TEXT BEFORE CLASS FOR THIS TOPIC.

MAXIMUM ADVANCE PREPARATION: SAME AS ABOVE.

Th 9/19 Optional Exam Review Session by TA’s – they will go over several Homework problems to be announced (session from 5 – 7 p.m. in GSB 2.126).

M 9/23 Finish Deferred Income Taxes========================Optional Exam Review Session by TA’s – they will go over several homework problems to be announced (6-8 p.m. in GSB 2.124).

W 9/25 NO CLASS -- time off for night exam

Th 9/26 EXAM 6:30-9:00 p.m. in location TBA (I’m still waiting to hear back on classrooms, so it is possible the exam may be from 6:00-8:30 p.m. … I’ll keep you posted)

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Date Chapter TopicAssignment (both homework to turn in and homework not to turn in)C = case; E = exercise, P = problem (all from textbook)

M 9/30 15 + 16 Equity

If time, begin Liabilities

C15-2, C15-3, E15-2, E16-6, E16-7, P16-7, Research Case 1 from Chap. 15 (do Coach Inc and use DEF-14A from Oct. 4, 2001), Additional Problems in Class Notes A – B

MINIMUM ADVANCE PREPARATION: NONE, WHO AM I KIDDING FOR THE MONDAY AFTER AN EXAM.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 616-617, 661-662, 770-782, 786-789, 861, 812-816, AND 820-825 FROM TEXTBOOK.

W 10/2 13 + 14 Liabilities C13-3, C13-4, C13-5, E13-3, E13-4, E14-15, E14-19, P14-5, P14-11,Additional Problem in Class Notes A-L

MINIMUM ADVANCE PREPARATION: READ 3/11/02 BUSINESS WEEK ARTICLE, AND 2/27/02 NEW YORK TIMES ARTICLE.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 656-662, 712-732, AND 734-735 FROM TEXTBOOK.

Th 10/3

F 10/4

Optional Review Session -- Review of Calls, Puts, Options, Forwards, Futures, and Swaps (same session – just held two times)

Thursday, 10/3 at 4-5 p.m. in GSB 2.126 and Friday, 10/4 at 8-9 a.m. in WAG 101

M 10/7 13 + 14

17

Finish Liabilities

Start Hybrids

See above.

C17-1, C17-2, E17-1, E17-7, E17-8, E17-9Additional Problems in Class Notes A - F

MINIMUM ADVANCE PREPARATION: READ 11/26/01 FORTUNE ARTICLE.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 858-864 FROM TEXTBOOK.

W 10/9 17

18A

Finish Hybrids

Start Derivatives

See above.

E18-24, E18-25, E18-26, E18-27, P18-16,P18-17, P18-18, P18-19, P18-20, P18-21Additional Prob’s Class Notes A – I

MINIMUM ADVANCE PREPARATION: READ 2/6/02 WALL STREET JOURNAL ARTICLE, AND 1/23/02 WALL STREET JOURNAL ARTICLE.


NO CLASS ON 10/14, 10/16, 10/21, and 10/23 -- TEXAS PLUS SCHEDULE

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M 10/28 18A

Finish Derivatives See above.

W 10/30 17 Employee Stock Options

=========================Optional Exam Review Session by TA’s—homework problems to be announced(6-8 p.m. in GSB 2.124)

E17-10, E17-13, E17-14, Financial Reporting Problem-Intel,Additional Problems in Class Notes A – L

MINIMUM ADVANCE PREPARATION: READ 4/15/02 BUSINESS WEEK ARTICLE, AND 3/4/02 FORBES ARTICLE.


M 11/4 17

17

Finish Employee Stock Options

Earnings Per Share

=========================Optional Exam Review Session by TA’s—homework to be announced(6-8 p.m. in GSB 2.124)

See above.

E17-15, E17-18, E17-22, E17-23, E17-24, E17-25, P17-5, P17-7, P17-8,Additional Problems in Class Notes A-B

MINIMUM ADVANCE PREPARATION: READ 10/16/02 WALL STREET JOURNAL ARTICLE, AND 8/21/02 WALL STREET JOURNAL ARTICLE.


W 11/6 19 Revenue Recognition E19-1, E19-5, E19-13, E19-14, E19-15, P19-2, P19-5, P19-6, P19-15, Additional Problems in Class Notes A

MINIMUM ADVANCE PREPARATION: READ 2/8/02 WALL STREET JOURNAL ARTICLE.


Th 11/7 EXAM 6:30-9:00 p.m. in location TBA (I’m still waiting to hear back on classrooms, so it is possible the exam may be from 6:00-8:30 p.m. … I’ll keep you posted)

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M 11/11 18 Revenue recognition continued See above

W 11/13 7 Receivables/Securitization E7-11, E7-13, E7-15, E7-16, P7-7Additional Problems in Class Notes A–K

MINIMUM ADVANCE PREPARATION: READ 3/10/02 NEW YORK TIMES ARTICLE, AND 11/25/01 NEW YORK TIMES ARTICLE.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 344-348 AND 355-362 FROM TEXTBOOK AND ALSO READ TWO BACKGROUND READINGS ON SECURITIZATION (IN CLASS NOTES – ONE CALLED BACKGROUND READING FOR SECURITIZATION AND THE OTHER CALLED MORE BACKGROUND READING. MOST OF WHAT I AM GOING TO TALK ABOUT FOR THIS TOPIC IS NOT IN THE TEXTBOOK (I.E., SECURITIZATION) BUT IS COVERED IN THE SECURITIZATION HANDOUTS.

M 11/18 10, 11, 12, 22

Operational Assets (PPE + Intangibles) and Leasing

E22-8, E22-9, P22-3, P22-6, E10-4, E10-14, P10-2, C10-3, E11-16, E11-17, E11-18, Financial Reporting Problem Chap. 11 – Intel, Financial Statement Analysis Case 2 Chap. 11 – McDonald’s, Financial Statement Analysis Case Chapter 12 – Merck and Johnson & Johnson, Add'l Probs Class Notes A – E and K - M

MINIMUM ADVANCE PREPARATION: READ 12/88 CORPORATE FINANCE ARTICLE, 12/31/02 WALL STREET JOURNAL ARTICLE, AND 2/21/02 WALL STREET JOURNAL ARTICLE.

MAXIMUM ADVANCE PREPARATION: DO MINIMUM ABOVE AND ALSO READ PAGES 500-503, 509-512, 561-564, 614-618, AND 1190-1226 FROM TEXTBOOK. ALSO, READ PAGES 1-9 AND 15-22 FROM THE NEW CHAPTER 12 THAT IS IN THE BACK OF THE TEXTBOOK (I HAVE A PDF VERSION OF THAT NEW CHAPTER IN CASE YOU BOUGHT A USED BOOK THAT WON’T HAVE IT IN THERE – WILL PUT IT ON THE BLACKBOARD COURSE PAGE FOR DOWNLOADING).

W 11/20 10, 11, 12, 22

Leasing continued... See above.

M 11/25 10, 11, 12, 22

Finish Leasing …

See above.

W 11/27 NO CLASS -- time off for second night exam

M 12/2 21 Pensions Q21-30, C21-1, E21-8, E21-11, E21-12, P21-4, P21-8, Financial Reporting Problem – Intel, Additional Problems in Class Notes A – F

MINIMUM ADVANCE PREPARATION: READ 1/23/02 WALL STREET JOURNAL ARTICLE, AND 4/26/02 NEW YORK TIMES ARTICLE.


W 12/4 21 Pensions See above.

FINAL EXAM: Wednesday, December 11 from 9-12 noon

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acc 380k.1, financial accounting standards and analysis i

Documents

maximum advance preparation

york times article

making journal entries

minimum advance preparation

gsb copy center

financial reporting problems

financial reporting

journal entry