BACHELOR OF SCIENCE IN ACCOUNTANCY

COURSE TITLE : Financial Reporting for SMEs

COURSE CODE : ACTG2
NUMBER OF UNITS : 3 units
PRE-REQUISITE SUBJECT :

A. COURSE DESCRIPTION:
This course deals with the discussion, appreciation and application of
accounting principles of Philippine Financial Reporting Standards for SMEs for
the recognition, measurement, presentation and disclosures of assets,
liabilities and equity in the financial statements. These include current
assets; property, plant and equipment; intangible assets; investment in
equity and debts securities; investment property; other non-current financial
assets; biological assets, liabilities, equity and financial statement
presentation.

B. COURSE LEARNING OUTCOMES

After the successful completion of this course, the student will be able to:

A. COGNITIVE
1. Discuss the nature and criteria of Small Medium Enterprises
2. Determine the required disclosures for the assets, liabilities and equity
in the financial statements of SMEs
3. Discuss the Philippine Financial Reporting Standards applicable for
every account and describe how these are applied to accounting problems

B. PSYCHOMOTOR
1. Measure the amount of assets, liabilities and equity on their initial
recognition and after initial recognition

C. AFFECTIVE
1. Determine the amount that will be presented in the financial
statements for each kind of account
2. Analyze the effects of errors on accounts on the current and future
financial statements
3. Formulate the proper adjusting entries to bring the assets to their
correct balances
Textbooks and References:
1. Intermediate Accounting 1, 2, 3 by Valix Peralta Valix
2. PFRS for SMEs a manual approach by Arrojado Laluan

Requirements:
1. Class Participation
2. Quizzes/Recitation/Assignments/Seatworks/Outputs
3. Major Examinations
DETAILED COURSE OUTLINE
Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes

1 3  Classroom Policies and introduction  Identify and comply with the requirements of the course in Sharing of
 Discussion on the course Syllabus Financial Reporting for SMEs to maximize learning expectations
 Explain the importance of Financial Reporting for SMEs from the teacher
 Introduction to SMEs  Explain the nature and composition of cash and cash to the students
 SEC Requirements equivalents
 Financial Reporting Standards
 Kinds of Financial Statements
Lecture/Class Students to answer
 Cash and cash equivalents
Discussion exercises and problems
 Definition of Cash related to the topic.
 Nature and composition of cash and cash Exercises /
equivalents Quizzes At least 75% of the
students must get at
least 75% grade in the
quiz/exercise
2 3  Cash equivalents
 Definition of Cash equivalents  Identify the items considered as cash equivalents Lecture/Class Students to answer
 Investment of excess cash  Make the proper presentation of cash and cash equivalents in Discussion exercises and problems
 Measurement and financial presentation the financial statements related to the topic.
 Cash funds and cash balances  Describe and explain the good practices in the management Exercises /
and control of cash Quizzes At least 75% of the
 Checks / kinds of checks
 Explain how the petty cash system operates students must get at
 Cash management / Investment of excess
 Prepare the proper journal entries involving petty cash least 75% grade in the
cash
 Explain the importance of a bank reconciliation quiz/exercise
 Imprest system
 Petty Cash Fund  Identify the reconciling items in a bank reconciliation and their
proper treatment
 Cash and cash equivalents  Prepare a bank reconciliation
 Bank to Book  Reconcile the cash receipts and disbursement in a
 Book to Bank company’s ledgers with the corresponding amounts in the
bank statement
 Adjusted book to adjusted bank balance
Prepare a proof of cash
Proof of Cash
 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes
3 3
 Accounts Receivables  Discuss the nature and classification of receivables Lecture/Class Students to answer
 Nature and classification of receivables  Prepare journal entries affecting receivables Discussion exercises and problems
 Measurement of accounts receivable  Make the proper measurement of the impairment of related to the topic.
Accounting for bad debts receivables Exercises /
Prepare the correct journal entry for bad debts Quizzes At least 75% of the
 Inventories students must get at
 Nature and classes of inventories  Discuss the nature of inventories and enumerate the items least 75% grade in the
includible in the inventory quiz/exercise
 Goods includible in the inventory
 Ownership of inventories  Determine the ownership of inventories according to the
 Inventory Cost Flow shipping terms.
 Inventory cost formulas  Compute the amount of inventory under the different cost
 FIFO formulas
 LIFO  Discuss the lower of cost and net realizable value as basis
for measurement of inventory
 Weighted average
 Apply the lower of cost / net realizable value
 Moving average
 Lower of Cost and Net Realizable Value
 Accounting for inventory write-down

4 3  Basic Financial Instruments

 Notes Receivable  Discuss the different forms of receivable financing Lecture/Class Students to answer
 Loan Receivable  Compute the proceeds from the different form of account Discussion exercises and problems
 Receivable Financing receivable financing related to the topic.
 Pledge  Compute the proceeds from discounting of notes receivable Exercises /
 Prepare the related journal entries in accounts receivable Quizzes At least 75% of the
 Assignment
financing and discounting of notes receivable students must get at
 Factoring
 Discuss the classification of financial assets least 75% grade in the
 Determine the initial and subsequent measurement of quiz/exercise
 Other Financial Instruments
 Financial asset at fair value financial assets
 Investment in equity securities  Apply the proper treatment of gain or loss in the sale of
financial assets
 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes
5 LONG QUIZ
6 3  Property, plant & equipment  To explain the nature and characteristics of property, plant
 Definition and characteristics of property, and equipment Lecture/Class Students to answer
plant and equipment  Identify specific items of property, plant and equipment Discussion exercises and problems
 Specific items of property, plant and related to the topic.
equipment  To determine the recognition and measurement of property, Exercises /
 Directly attributable costs plant and equipment under different modes of acquisition Quizzes At least 75% of the
 Measurement of initial recognition under  To determine the proper accounting and classification of students must get at
the different modes of acquisition property held for sale or idle or abandoned property least 75% grade in the
 quiz/exercise
7 3  Land and Building  To determine the proper classification of land
 Costs chargeable to land  To identify the expenditures to be included as cost of land or Lecture/Class Students to answer
 Land improvements building under different purchase arrangements Discussion exercises and problems
 Cost of building when purchased  To apply the proper treatment of other items related to land related to the topic.
 Cost of building when constructed or building Exercises /
Quizzes At least 75% of the
 Sidewalks, pavements, parking lots,
students must get at
driveways
least 75% grade in the
 Building fixtures
quiz/exercise
 Ventilating system, lighting system,
elevator
Cost of demolition of old building to  Identify the costs to be charged to machinery upon
construct a new building acquisition
 Determine the proper treatment of costs after acquisition;
 Machinery  Distinguish between capital and revenue expenditures and
their proper treatment
 Expenditures included as cost of
machinery  Prepare the proper journal entries
 Recognition of subsequent cost

8 3  Depreciation  To explain the concept of depreciation and depletion

 Concept of depreciation  To identify and discuss the causes of depreciation Lecture/Class Students to answer
 Kinds of depreciation  To compute the depreciation using the different methods Discussion exercises and problems
 Factors in computing depreciation  To explain the nature of wasting assets related to the topic.
 Methods of depreciation  To apply the proper accounting for depreciation of mining Exercises /
 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes
 Accelerated methods of depreciation equipment Quizzes At least 75% of the
 To prepare the proper journal entries for depletion of wasting students must get at
 Depletion assets least 75% grade in the
 Definition of depletion quiz/exercise
 Exploration and evaluation expenditures
 Exploration and evaluation asset
 Measurement and classification
 Wasting assets
 Acquisition, exploration, development and
restoration cost of wasting asset

9 MIDTERM EXAM

 Intangible assets
10 3  Definition / identification of intangible  To explain the essential requirements for intangible assets Lecture/Class Students to answer
assets  To determine the measurement on initial and subsequent Discussion exercises and problems
 Recognition; initial and subsequent recognition of intangible assets related to the topic.
measurement of intangible assets  To determine the amortization and impairment of intangible Exercises /
 Disclosures related to intangible assets assets Quizzes At least 75% of the
 Identifiable intangible assets  To identify internally generated intangible assets students must get at
 To explain what goodwill is; determine its recognition and least 75% grade in the
 Patent
measurement quiz/exercise
 Trademark
 Copyright  To distinguish between research cots and development cost
 Franchise  To apply the criteria for recognition of development cot
 Others
 Goodwill
 Research and development cost
 Definition of research
 Accounting for research cost
 Definition of development cost
Accounting for development cost

11 3  Biological assets  To discuss the difference between biological asset, agricultural

 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes
 Definition of biological assets, produce and agricultural activity Lecture/Class Students to answer
agricultural produce and harvest  To determine the recognition and measurement of biological Discussion exercises and problems
 Agricultural activities asset or agricultural produce related to the topic.
 Biological transformation To identify and apply the proper treatment for other items Exercises /
 Recognition and measurement of related to agriculture such as bearer plants, plant with dual Quizzes At least 75% of the
biological assets use, bearer animals and animals used in recreational students must get at
 Bearer plants activities least 75% grade in the
quiz/exercise
 Agricultural assets attached to land
 Bearer animals
Animal-related recreational activities

12 3  Liabilities  Differentiate Current and Non-Current Liabilities

 Definition of Liabilities  Articulate the different current and non-current liabilities and Lecture/Class Students to answer
 Measurement of Current and Non- know how to recognize each Discussion exercises and problems
Current Liabilities  Explain the accounting treatment for refinancing and breach related to the topic.
 Long-term debt falling due within the of covenants Exercises /
year and Refinancing  Discuss the presentation of Current and Non-Current Quizzes At least 75% of the
 Covenants and Breach of Covenants Liabilities in Financial Statements students must get at
 Discuss the accounting recognition and measurement for least 75% grade in the
 Presentation of Current and Non-Current
Deferred Revenue, Gift Certificates and Bonuses quiz/exercise
Liabilities
 Deferred Revenue, Gift Certificates and  Discuss the accounting recognition and measurement for
Bonuses Cash Rebate Program, Cash Discount Program and
Customer Loyalty Awards

13 3  Provision  Discuss the accounting recognition and measurement for

 Definition of Provision Provisions Lecture/Class Students to answer
 Recognition, Measurement and  Explain the relevance of PAS 37 in the discussion Discussion exercises and problems
considerations of Provision  Discuss the accounting treatment for Contingent assets and related to the topic.
 Definition of Restructuring provisions liabilities Exercises /
 Definition and Treatment for Contingent  Discuss the accounting treatment for Decommissioning Quizzes At least 75% of the
assets and Liabilities Liabilities students must get at
least 75% grade in the
 Definition and Treatment for
quiz/exercise
 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes
Decommissioning Liabilities

14 LONG QUIZ

15 3  Employee Benefits  Describe the basic components of employee benefits.

 Recognition and measurement of  Identify the compensation & benefits goals of the human Lecture/Class Students to answer
Short-term Employee Benefits resources department. Discussion exercises and problems
 Short-term paid absences  Discuss historic changes and trends that have affected or will related to the topic.
 Profit Sharing and Bonus Plan affect firms when they decide to initiate or implement Exercises /
 Recognition and measurement of employee benefit programs. Quizzes At least 75% of the
Other Long-term Employee Benefits  Analyze the effectiveness of various strategies used by students must get at
companies that offer employee benefits. least 75% grade in the
 Termination Benefits
 Gain awareness of internal and external factors that are quiz/exercise
 Recognition and measurement of
Retirement Benefits considered when companies decide to offer or forego offering
 Income Tax employee benefits.
 Accounting Income  Discuss the components in computing Income Taxes
 Taxable Income  Explain the difference of Deferred Tax and Current Tax
 Permanent and Temporary Differences
 Tax Base
 Deferred Tax Liability
 Accounting Income higher than
taxable income
 Current Tax Liability

16 3  Shareholder’s Equity  Understand the most common components of shareholders’

 Concept and components of equity. Lecture/Class Students to answer
Corporation  Understand the economics events that alter stockholders’ (or Discussion exercises and problems
owners’) equity, and how to account for them. related to the topic.
 Organization of Corporation
 Understand the various elements that affect the value of a Exercises /
stock option. Quizzes At least 75% of the
 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes
 Article of Incorporation and By-Laws  Analyze the impact of stock options on reported earnings students must get at
 Pre-incorporation and subscription least 75% grade in the
quiz/exercise
agreement
 Organization Cost
 Elements of Shareholder’s Equity
 Issuance of share capital for noncash
consideration and services
 Share Issuance Costs
 Costs od public offering shares
 Share issued at a discount
 Watered Share and Secret Reserve
 Delinquent Subscription
 Share based-payment
 Leases

17 3  Financial Statement Presentation  Analyze the consideration in preparing financial statements

 Fair Presentation  Evaluate the components of financial statements Lecture/Class Students to answer
 Going Concern  Reinforce the skills in transforming income statement data to Discussion exercises and problems
 Frequency of Reporting cash flow data and vice versa related to the topic.
 Consistency of Presentation  Consider the relations between net income and cash flow Exercises /
from operations and between cash flows from operating, Quizzes At least 75% of the
 Comparative information
investing, and financing activities for various types of students must get at
 Materiality and Aggregation
businesses. least 75% grade in the
 Complete set of Financial Statements quiz/exercise
 Statement of Financial Position  Understand the importance of Statement of Financial
Position, Income, Cash Flows and Notes in reporting the
 Statement of Income
financial status of the business to related parties
 Statement of Cash Flows
 Notes to Financial Statements
 Related Parties

 Significant differences between PFRS for

SMEs and Full PFRS
 Assessment of
Strategies/
Wk Hrs Topic Learning Outcomes Learning
Activities
Outcomes

18 FINAL EXAM
EXPECTATIONS FROM STUDENTS:
1. The student is responsible to come to each class prepared.
2. The student expected to take all examinations on the date scheduled.
3. The student should read the assigned chapter/s and solve exercises/problems prior to class.
4. The student is expected to attended each class and participate actively in the discussions.
5. The student is expected to do the seatwork/exercises that will be assigned by the instructor
inside the classroom.

ACADEMIC DISHONESTY:
All students are expected to be honest. Cheating, lying, and other forms of
unethical behavior will not be tolerated. Consistent with the University rules and
regulations, the following are considered major offenses and will be subject to
disciplinary action:
 Cheating during examination, quiz or test; plagiarism
o Unauthorized possession of notes or materials relative to examination, whether
the students use of them or not
o Copying from of allowing another to copy from one's examination paper, report,
term paper, etc.
o Having somebody else take the examination in place of another student. Both
students shall be liable
o Talking to another student without permission during the examination
o Submitting as one's work, assigned report, term paper, case analysis, reaction
paper, etc, copied from others

POLICY on ABSENCES:
 A student is expected to attend all his/her classes promptly and regularly from the first
day of classes onwards.
 A student will be marked late if s/he arrived within the 15-minutes grace period.
 A student will be considered absent if s/he arrives beyond the grace period
 Three instances of tardiness will be equivalent to one (1) absence
 The maximum number of absences is 20% of the total hours allotted for a subject in a
semester or equivalent to 7 absences. A student who incurs more than 7 absences shall
be considered Unofficially dropped.

GRADING SYSTEM:

Midterm Grade (MG) Pre-Final Grade (PFG)

Midterm Exam 40% Final Exam 40%
Class Standing 60% Class Standing 60%
Quizzes 15% Quizzes 15%
Recitation 10% Recitation 10%
Assignment 5% Assignment 5%
Seatwork 10% Seatwork 10%
Output 20% Output 20%
Total 100% Total 100%

Final Grade (FG)= (MG + PFG) / 2

POINT POINT
GRADE REMARKS GRADE REMARKS
Equivalent Equivalent
 98-100 1.00 Excellent 77-79 2.75 Satisfactory

95-97 1.25 Excellent 75-76 3.00 Passed

92-94 1.50 Very Good Below 75 5.00 Fail

89-91 1.75 Very Good INC Incomplete

86-88 2.00 Good OD Officially Dropped

83-85 2.25 Good UD Unofficially Dropped

80-82 2.50 Satisfactory

Prepared by: Approved by: Noted by:

Jennifer R. Laluan, CPA

Faculty Member Chairperson Vice-President for
Academic Affairs

I have read the course syllabus and I understand that I have to comply with the
requirements of the course and the expectations from me as a student of
______________ during the First Semester of _________. I am fully aware of the
consequences of non-compliance with the abovementioned requirements and
expectations.

________________________________
Printed name and signature of student

________________________________
Date