AMIS 522 Intermediate Accounting
Winter 2012
Class meeting time:
1:30-3:18 TR 215 SB
5:30-7:18 TR 215 SB
Office hours: 3:30-4:30 TR
Professor Doug Schroeder
Office: Fisher 424
schroeder_9@cob.osu.edu
phone: 292-6427
General Description
The course explores the science of accounting. In other words, we focus on theory and
practice in the academic discipline of accounting. Although the course has an academic
focus, it is not divorced from practical issues. Indeed, by reading and analyzing scholarly
work from the academic literature, students gain a keener understanding of the ways in
which accounting is practiced.
Approach
There are many possible ways to approach the study of accounting. This course
emphasizes an information content approach in which accounting reports represent one
among many sources of information in a society. In this approach, we examine the
structure, language or scaling choices, and comparative advantage of accounting reports
as an information source. Uncertainty will be central to our discussions.
Class preparation is vital and involves reading and carefully working the examples.
Students are expected to be actively involved discussions. Each class session will test our
understanding of accounting. The course involves a substantial time commitment (at least
two to three hours outside of class for each hour in class).
Text and Reading Materials
an intermediate accounting text.
Assignment material is posted at the following web address:
http://fisher.osu.edu/~schroeder_9/AMIS522/
Recommended (optional):
Christensen, J. and J. Demski (CD). Accounting Theory: An Information Content
Perspective, Irwin McGraw-Hill, ISBN: 0072296917.
Demski, J. (D) Managerial Uses of Accounting Information, revised edition, Springer,
ISBN 9780387774503.
While these materials are optional, suggested readings are identified in the attached
course schedule.
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Course Requirements and Grading
Grades will be assigned based on cumulative performance in the course, using the
following weights for the components:
class discussion, homework,
making a positive contribution
to the learning environment
Comprehensive final exam
50%
50%
Homework
Homework is collected at the beginning of each class. Homework is not graded but may
be used to assess your preparation for class discussion. Homework will not be returned.
Students should retain a copy of their homework to facilitate class discussion.
Examination
The final exam is a cumulative, closed-book, closed-note, in-class examination.
Calculators are permitted but other electronic devices are not. Make-ups for the final
exam will be given only for reasons acceptable according to University guidelines. The
exam date is identified in the outline, mark it on your calendar. You must notify me in
advance if you have a conflict with the exam time (including illness).
Examinations are designed to serve two purposes: (1) to help you assess your
comprehension of basic concepts, and (2) to help you evaluate your ability to integrate
various topics discussed and to apply them. The examination will be challenging, and
(hopefully) instructive. The exam format will primarily be problems and short essay.
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Tentative schedule for AMIS 522 Winter 2012:
week
T
Overview: accounting structure &
scaling
1/2
notes on accounting & linear algebra;
Ralph’s Structure
Overview: valuation – scale &
information
CD ch. 3; D ch. 3;
1/9
Ralph’s Economic Income (P)
Ralph's Income (S)
1/16
R
Overview: accounting structure &
information
notes on accounting & linear algebra;
Ralph’s Accounting Information
Overview: performance evaluation
information
CD ch. 11; D ch. 13;
Decentralized Ralph (P),
Ralph's Incentive Contract (S)
Accounting scale & private debt –
notes
Accounting scale & private debt –
notes
notes on directed graphs;
Ralph’s Debt Securitization (P),
Ralph's Note
Ralph’s Accruals
& Debt (S)
Informativeness of accruals
1/23
Accounting scale & public debt –
bonds
notes on linear algebra;
Ralph's Bonds
notes on best depreciation schedules;
Ralph’s Accruals
(parts A-C)
Accounting scale & leases
1/30
Ralph's Leases
Valuation & private information
D ch. 9,10;
Ralph’s Heirloom (P)
Accounting scale
notes on residual income valuation;
Ralph’s R&D Analyst (S)
3
week
2/6
2/13
T
R
Accounting scale & investments
Accounting scale & multiple
information sources
CD ch. 10;
CD ch. 10 appendix;
Ralph’s Scale (P)
Ralph’s Probability Assignment (S)
Ralph’s Investment
Contingent claims analysis & option
Contingent claims & accounting scale
valuation
Rubinstein, 1994, “On the Accounting
Cox, Ross, and Rubinstein, 1979,
Valuation of Employee Stock
“Option pricing: A simplified
Options.”
approach.”
Ralph's Employee Stock Options
Ralph's Employee Stock Options
(part B)
(part A)
2/20
Accounting standards & scale
CD ch. 19-20; D ch. 19;
Ralph’s 157 Dilemma (P)
Ralph’s Belief Assignment (S)
Accounting standards & information
CD ch. 19-20; D ch. 19;
Ralph's Regulation
2/27
Earnings management & scale
CD ch. 8; D ch. 10;
Ralph’s Accounting Reserves (P)
Ralph’s Information Cascade (S)
Accounting scale & owners’ equity
Ralph’s EPS
Financial statement analysis &
information
Arya, Fellingham, Glover, Schroeder,
and Strang, 2000, “Inferring
notes on a directed graph analysis of
transactions from financial
the cash flow statement;
statements.”
Ralph's Financial Statement
Invertible Ralph
Analysis
Financial statement analysis & scale
notes on accounting & linear algebra;
3/5
Final Exams
3/12
1:30 section M 3/12 1:303:18
5:30 section T 3/13 5:307:18
(P) primary focus of discussion
(S) secondary, will be discussed if
time permits
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