LEVENTHAL SCHOOL OF ACCOUNTING COURSE SYLLABUS [18106 & 18107] ACCOUNTING 470b (18106 & 18107) ADVANCED EXTERNAL FINANCIAL REPORTING ISSUES Spring 2006 Prof. Bill Holder OFFICE: ACC 117 Telephone: (213) 740-4855 E-MAIL: wholder@marshall.usc.edu Class Meeting Times & locations: T/W: 8 am–9:50 am ACC 303 10 am–11:50 am ACC 303 2 pm-3:50pm ACC 236 OFFICE HOURS: MW: 12pm-2:00pm & by appt. USC DEP’T. OF PUBLIC SAFETY:EMERGENCIES (213) 740-4321 USC EMERGENCY INFORMATION (213) 740-9233 USC INFORMATION (213) 740-2311 KUSC FM 91.5 FM ACCT 470b continues the student’s exposure to key aspects of financial accounting theory and practice. It builds upon the foundation established in ACCT 370a, and ACCT 370b, and ACCT 470a. COURSE DESCRIPTION: Developing capabilities to identify and articulate current external financial reporting problems and issues, concentrating on operating, financing, and investing activities of business organizations. COURSE PREREQUISITES: For successful performance in ACCT 470b, completion of ACCT 470a is essential. COURSE OBJECTIVES: The primary objectives of ACCT 470b are as follows (this list is not necessarily all-inclusive) : Develop skills in reporting and analyzing accounting information Develop an understanding of accounting information, including the rules used to prepare and report this information Develop an appreciation of the usefulness and limitations of accounting information Develop experience in analyzing accounting information from the perspective of its various users (e.g., equity investors, creditors, company management, auditors, etc.) Peripheral objectives of ACCT 470b are to enhance the student's written and oral communication skills and to imbue the student with the meaning of professionalism and ethical conduct. 1 STATEMENT FOR STUDENTS WITH DISABILITIES: Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to Prof. Simmonds as early in the semester as possible. DSP is located in STU 301 and is open 8:30a.m. – 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776. REQUIRED TEXTBOOKS (obtainable from USC Bookstore): Kieso, Keygandt, Warfield, Intermediate Accounting, Tenth Edition (Also used in 470a) (IA) Larsen, Modern Advanced Accounting, Ninth Edition, Second Printing (Also used in 470a) (MAA) Original Pronouncements: Accounting Standards (6/1/05) (APB, ARB, CON, FAS) (3 volumes) (Also used in 470a) RECOMMENDED OTHER COURSE MATERIALS: Dictionary STUDENT OBLIGATIONS: 1. Attend all classes on time. (See SCampus 2002-2003, IIB2, P.78) (NO MAKE-UP EXAMINATIONS WILL BE GIVEN; UNEXCUSED ABSENCE FROM AN EXAMINATION RESULTS IN A GRADE OF “O” ON THE EXAM.) 2. Submit all written assignments, prepared on a word processor, on the date assigned and in good form. (See ES Rule 13). Written assignments submitted late will be graded 0, except for excused absences. Also see pages 5 and 6 hereof. Students who do not turn in a solution to a case study on which a mid-term or final examination question is based will receive no credit for an answer to the examination question. 3. Staple written assignment sheets. Students are responsible for complying with the English grammar, style, and usage rules in Chapters I and II of The Elements of Style and in the attached essay "Thoughts on Writing" in written assignments. Grades on case assignments are NOT NEGOTIABLE. Annotations of “ES” (The Elements of Style), “TW” (“Thoughts on Writing”), and “1 (a),” “3,” etc. (p.5 hereof) should be studied to help students improve their writing skills. Students may consult informally with each other, and they may do any desired research, in completing written assignments. However, written assignments must be the students’ own work, and any cited material must be properly footnoted. (Please see definition of plagiarism at Section 11.11, page 83 of Scampus 2002 - 2003.) 4. Read attached “Ethical Obligations of USC Students of Accounting”. LEVENTHAL SCHOOL OF ACCOUNTING HONOR CODE: Per Article II of the Student Honor Code, “All students enrolled in upper division and graduate courses required for a degree in Accounting and offered by the Leventhal School of Accounting…are subject to the Code…” RETURNED GRADED WORK: All graded written assignments and examinations will be returned promptly to students. Unclaimed items will be retained by the instructor until the last day of the following semester (excluding summer term), then discarded. EXAMINATIONS: The mid-term examination is 110 minutes in length. The final examination is 120 minutes in length. Examinations are not cumulative. The mid-term and final examinations include “essay” questions, and “problems”. Grades on examinations are NOT NEGOTIABLE. No “makeup” examinations will be given; an unexcused absence from an examination results in a grade of 0 on the examination. 2 COMPOSITION OF FINAL GRADE: The average grade in this course will be in accordance with Leventhal School of Accounting Standards. The following weights will be assigned for determination of final grades: Attendance, class participation and written assignments, if any............................................10% Mid-term examination ..................................……………………………………………….45% Final examination.........................................................….………………………………….45% Total………….………………………….……………….…………………………………100% The +/- grading system will be used. (See attached "Leventhal School of Accounting Grading and Academic Standards.") Final grades are obtainable only through self-addressed postcard or envelope or through USC's formal grade report; they are not obtainable from the Leventhal School of Accounting Staff. Final grades are NOT NEGOTIABLE. ATTENDANCE AND CLASS PARTICIPATION: Attendance is defined as appearing in the classroom no later than 5 minutes after the scheduled beginning time of the class. Participation is defined as (1) asking questions of the instructor or fellow students; (2) answering questions posed by the instructor or fellow students; (3) volunteering to discuss issues raised in class. Sitting mutely in class is not participation. 3 COURSE AND EXAMINATION SCHEDULE DATE 3/6 3/8 3/13 & 15 3/20 TOPIC TEXT READING Revenue recognition: general GASB Meeting Spring Break IA 18; CON 6, ¶s 7879, 82; CON 5, ¶s 8384; FAS 48; FAS 49 IA 18; ARB 45 3/22 Revenue recognition: construction contracts Revenue recognition: other 3/27 Pension Plans 3/29 Pension Plans, continued 4/3 Other employee benefit plans IA 20 4/5 4/7 Earnings per share IA 16 4/10 Earnings per share ; IA 16; FAS 128 summary 4/12 Foreign currency transactions other than forward contracts. Foreign currency financial statements MAA Ch. 11 MAA Ch. 12 4/17 Forward contracts MAA 11 & 12 4/19 GASB Meeting 4/26 Derivatives & stock options Other stock issuance commitments IA 18; APB 10, ¶ 12; FASs 45, 50, 51, 91 IA 20; FAS 87 summary; FAS 88 summary FAS 43; FAS 106; FAS 112; WRITTEN ASSIGNMENTS IA Ex. 18-2; IA Ethics Case 2 IA Ex. 18-4, IA C 18-6 IA Ex. 18-11; IA Ex. 18-21 IA Ex. 20-42, Ex. 20-4, Ex. 20-6 IA Ex. 20-9 Ex. 20-10, Ex. 20-11, Ex. 20-13 Ex. 20-22, Ex. 20-23, Ex. 20-24 MIDTERM EXAMINATION IA 17; FAS 123, summary and ¶ 61 APB 14,(1-18) MAA 17, 18, 19 Governmental Accounting 4/28 FRI. Governmental Accounting and Financial Reporting 5/8 FINAL EXAMINATION TBA 4 IA Ex. 16-15; IA Ex. 16-16; IA Ex. 16-24; IA Ex. 16-28 MAA Ex. 11-3 MAA Ex. 11-4 MAA Ex. 12.5; MAA Ex. 12.7 MAA Ex. 11-8 MAA Ex. 11.9 IA Ex. 17-5; IA Ex. 17-7 MAA Ex.1614,MAA Case 16-6 MAA Ex.17-8. Ex.18-7,8 ACCT 470b INSTRUCTIONS FOR SOLUTIONS TO CASES 1. In preparation for case solutions, study Chapters II and III, pp. 15-38, of The Elements of Style (ES). Note especially the need for the following: (a) Heading (or title) - ES p. 34 (b) Paragraph construction - ES Rule 13, pp. 15-17 (c) Active voice - ES Rule 14, pp. 18-19 (d) Hyphenation - ES pp. 34-35 (e) Quotations - ES pp. 36-37 (f) References - ES p. 37 (g) Titles - ES p. 38 2. Do not write a “zero draft” only! See ES no. 5, p. 72, re revising and rewriting. 3. When an accounting pronouncement, etc., is first cited, spell it out in full and then place a suitable acronym in parenthesis to be used thereafter. For example: Generally accepted accounting principles (GAAP) Securities and Exchange Commission (SEC) Statement of Financial Accounting Concepts No. 1, “Objectives of Financial Reporting by Business Enterprises” (CON1) Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies” (FAS 5) Statement of Financial Accounting Standards No.141, “Business Combinations” (FAS 141) 4. Remember that ’s is singular possessive; s’ is plural possessive. 5. Examples of footnotes: First Citation: 1 Second Citation, same work, some page 2 Third Citation, same work, different page(s) 3 Fourth Citation, different work: 4 Fifth Citation, previous work: 5 E. John Larsen, Modern Advanced Accounting (New York: McGraw-Hill Companies, Inc. 2003), p. 105. Ibid. Ibid., pp. 109-110. Statement of Financial Accounting Concepts No. 6, “Elements of Financial Statements,” par. 78. Larsen, p. 114. 5