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BMS - DSC - Financial Accounting and Analysis (1)

The DSC03 course in Financial Accounting & Analysis aims to teach students the preparation and analysis of financial statements in accordance with IFRS and Indian Accounting Standards. Key learning outcomes include understanding business transactions, creating financial statements, and analyzing them using various techniques like ratio and cash flow analysis. The course includes units on basic accounting concepts, preparation of financial statements, global accounting standards, and financial statement analysis, complemented by suggested readings and assessment methods.

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15 views2 pages

BMS - DSC - Financial Accounting and Analysis (1)

The DSC03 course in Financial Accounting & Analysis aims to teach students the preparation and analysis of financial statements in accordance with IFRS and Indian Accounting Standards. Key learning outcomes include understanding business transactions, creating financial statements, and analyzing them using various techniques like ratio and cash flow analysis. The course includes units on basic accounting concepts, preparation of financial statements, global accounting standards, and financial statement analysis, complemented by suggested readings and assessment methods.

Uploaded by

jhapriya878
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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DSC03: FINANCIAL ACCOUNTING & ANALYSIS

Course Objective(s): To familiarize students with the mechanics of preparation of Financial


Statements; understanding Corporate Financial Statements in the light of IFRS or Indian Accounting
Standards, their analysis and interpretation; understanding of beyond Balance Sheet indicators to
project corporate performance; prediction of financial crisis of a business enterprise.

Learning Outcomes:
➢ Understand the process of recording and classifying business transactions and events
➢ Creating and understanding Financial Statements of Sole Proprietor, viz., Profit & Loss
Account, Balance Sheet
➢ Understand the financial statements of company as per IFRS/Ind-AS
➢ Analyse the Financial Statements from the perspective of different stakeholders using Ratio
analysis, Cash flow analysis, Net working capital analysis , Trend analysis and learning to use
beyond balance sheet indicators for analysing corporate performance
➢ Understanding of financial distress or bankruptcy prediction, introduction to earnings
management

Course Contents:
Unit 1: Introduction to Financial Accounting. Basic Concepts and Conventions (4 Weeks)
Business Entity, Dual Aspect, Going Concern, Accounting Period, Money Measurement, Accrual,
Disclosure, Materiality, Consistency, and Conservatism. The Accounting Equation. Understanding
Assets, Liabilities, Revenues, and Expenses. Understanding Capital Expenditure, Revenue
Expenditure, Deferred Revenue Expenditure, Capital Receipts, and Revenue Receipts. Nature of
Accounts and Rules of Debit and Credit. Recording transactions in General Journal. Preparation of
Ledger Accounts. Opening and Closing Entries. Preparation of Trial Balance.

Unit 2: Preparation of Financial Statements (4 Weeks)


Preparing Trading Account, Profit & Loss Account and Balance Sheet for a Sole Proprietor. Format
for preparing financial statements for IND-AS companies as per Division II, Schedule III, Companies
Act, 2013. Understanding of Financial Statements of a Joint Stock Company as per new accounting
standards: IND-AS (Balance sheet, Profit & Loss, Statement of Comprehensive Income, Cash Flow
Statement); Understanding the contents of a Corporate Annual Report (Actual latest annual reports to
be used).

Unit 3: Global Accounting Standards/IFRS (3 Weeks)


Meaning & need for globalisation of accounting standards, Adoption versus Convergence, need for
convergence of Indian GAAP with IFRS; Benefits of achieving Convergence with IFRS to different
stakeholders in India. Salient features of Ind-AS/IFRS (Fair Value Accounting, Substance versus form,
Time value of money). Introduction to Indian Accounting Standards (Ind-AS); Understanding IND-
AS 1: Presentation of Financial Statements, IND-AS 7: Cash Flow Statement, IND-AS 109: Financial
Instruments.
Unit 4: Analysing Financial Statements (5 Weeks)
Objectives of Financial Statement Analysis; Sources of information; Standards of Comparison;
Techniques of Financial Statement Analysis (Through a case study of real company) - Ratio analysis,
Cash flow analysis, Net working capital analysis, Trend analysis. Use of ratios to predict financial
crisis of a company by using Altman Z –score. Use of Beyond the Balance Sheet indicators of
analysing financial position of a company. Introduction to Earnings Management.

Suggested Readings
1. Narayanaswamy R. Financial Accounting: A Managerial Perspective. PHI Learning Private
Limited, Delhi.
2. Robert N. Anthony, David F. Hawkins, Kenneth A. Merchant. Accounting- Text and Cases.
McGraw Hill Education (India) Private Limited, New Delhi.
3. Garg CA Kamal, and Sehrawat Neeraj Kumar. Beginner`s Guide to Ind-AS & IFRS. Bharat Law
House Pvt. Ltd., New Delhi.
4. Maheshwari S.N., Maheshwari Suneel K., and Maheshwari Sharad K. An Introduction to
Accountancy. Vikas Publishing House Private Limited, Noida.
5. Bhattacharyya Asish K. Corporate Financial Reporting and Analysis. PHI Learning Private
Limited, Delhi.

Additional Readings
1. Lal Jawahar. Corporate Financial Reporting: Theory, Practice & Cases. Taxmann Publications
Private Limited.
2. Patricia M. Dechow, Richard G. Sloan and Amy P. Sweeney: Detecting Earning Management, the
Accounting Review. 70, No. 2 (Apr., 1995), pp. 193-225.

Note: Latest edition of the suggested/additional readings will be used.

Teaching Learning Process


Class room lectures, Case study discussion, Numerical problem solving, Class presentation on the
assigned topic by students - individually or in groups, Workshops and Tutorials.

Assessment
Total Marks: 100
Internal Assessment: 25 Marks
End Semester University Exam: 75 Marks
The Internal Assessment of the course may include Class participation, Assignments, Class tests,
Projects, Field Work, Presentations, amongst others as decided by the faculty.

Key Words
Generally Accepted Accounting Principles, Financial Statements, Financial Ratios, IFRS, Indian
Accounting Standards.

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