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Financial Accounting B

Module description

Financial accounting is a branch of accounting that focuses on producing information for external users of corporate financial reports, including shareholders and creditors. The accounting information system collects, processes and summarises financial data pertaining to a business entity, and presents it as information that is useful for decision making purposes.  Financial accounting therefore plays a crucial role in the efficient allocation of resources in an economy.   

This module follows on from, and is a continuation of, the BEA2019 Financial Accounting A module, study of which is a co-requisite for entry to this module.  Similar to BEA2019, this module will expose students to the recognition, measurement and disclosure issues relating to a wide variety of financial statement items such as: borrowing costs; government grants; taxes; impairment of assets; revenue recognition; earnings per share; cash flows reporting; and business combinations.  Finally, this module will also teach students how to analyse and interpret financial statements whilst being mindful of their limitations.  

Module aims - intentions of the module

This module aims to give you a solid foundation in the theory and practice of financial reporting.  You will be exposed to current issues within the financial reporting environment and will engage with International Financial Reporting Standards (IFRS).  Use is also made of the published financial statements of listed companies as a practical illustration of the concepts taught.

The module will provide you with the knowledge and skills that you need to progress to further study of financial reporting.

Intended Learning Outcomes (ILOs)

ILO: Module-specific skills

On successfully completing the module you will be able to...

• 1. explain and discuss the issues surrounding the accounting of borrowing costs, government grants, impairment of assets, revenue recognition, construction contracts, changes in accounting policies, estimated and errors, cash flows and business combinations (including the impact of taxes, where applicable);
• 2. account for borrowing costs, government grants, taxes, assets impairment, revenue recognition, construction contracts, changes in accounting policies, estimates and errors (including the impact of taxes, where applicable) in corporate financial statements in accordance with relevant accounting standards;
• 3. compute and present basic and diluted earnings per share (including comparatives) and explain their importance to financial statements users;
• 4. prepare a statement of cash flows for a single entity in accordance with relevant accounting standards;
• 5. prepare basic consolidated financial statements (consolidated statement of comprehensive income, statement of financial position, and statement of changes in equity) for a simple group involving either subsidiary acquisitions or disposals;
• 6. analyse and interpret financial statements using contextual information and discuss the limitations of financial statements analysis.

ILO: Discipline-specific skills

On successfully completing the module you will be able to...

• 7. evaluate arguments and evidence;
• 8. process information and draw reasoned conclusions concerning structured and unstructured financial accounting problems from a given set of data;
• 9. apply logical thinking and numeracy skills to problems by using appropriate accounting techniques and professional judgement.

ILO: Personal and key skills

On successfully completing the module you will be able to...

• 10. use appropriate learning resources to manage own learning experience independently;
• 11. communicate effectively in writing.

Syllabus plan

• Impairment of assets
• Borrowing costs and government grants
• Revenue recognition (including construction contracts)
• Earnings per share
• Changes in accounting policies, accounting estimates and errors
• Cash flows statements
• Business combinations 1
• Business combinations 2
• Business combinations 3
• Analysis and interpretation of financial statements

Learning activities and teaching methods (given in hours of study time)

Details of learning activities and teaching methods

Formative assessment

Summative assessment (% of credit)

Details of summative assessment

Details of re-assessment (where required by referral or deferral)

Re-assessment notes

** If you pass the module overall you will not be referred in any component – even if you have not passed one of the individual components.

Students who fail the whole module will be re-assessed with an in-class test and/or summer examination, whichever is relevant as above.

The written and MCQ components of the final exam are one assessment and are not separable.

Indicative learning resources - Basic reading

Indicative reading:

Melville, A. (2019). International Financial Reporting: A Practical Guide (7th ed.). London: Pearson.

Maynard, J. (2017).  Financial Accounting, Reporting and Analysis (2nd ed.), Oxford: Oxford University Press.

Connolly, C (2018). International Financial Accounting and Reporting (6th ed), The Institute of Chartered Accountants in Ireland

Additional journal/professional articles relevant to the module.

Indicative learning resources - Web based and electronic resources

ELE – https://vle.exeter.ac.uk/course/view.php?id=6197

Indicative learning resources - Other resources

Additional reading list (e.g. academic/professional journal articles, etc.) may be provided at the end of every lecture.

Key words search

Financial accounting, financial reporting, IFRS