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/ ACCOUNTING 582 (second half): FINANCIAL ACCOUNTING FOR M&A
Spring 2017 Semester
Meets Tuesday/Thursday, 12:30 pm- JKP 212
Professor: Patrick Kinsella
Office: Leventhal School of Accounting Building #214
Cell Phone:310-270-8605
E-mail:
Office Hours: Tuesday/Thursday 11am-12pm
Can’t Miss Dates: Please note that these are the dates of exams that should not be scheduled forinterviews, trips out of town, etc.: Financial Accounting Half of Course: April 6 (midterm) andMay 10 (final). Please note these dates as there are no make-ups for exams.
The last day to add or drop a class without a mark of “W” and with a refund is January 27. To drop without a refund and without a mark of “W” the date is February 24. The last day to drop with a mark of “W” is April 7.
Prerequisite: an introductory accounting course
Corequisite: none
Course (second half of ACCT 582) Description and Objectives
This course is the second half of ACCT 582. We cover financial accounting for mergers and acquisitions and we examine how financial accounting reports and their analysis are impacted by detailed financial accounting rules used to account for mergers and acquisitions.The first half of the course covers tax aspect of mergers and acquisitions and has its own syllabus. The objectives and expected learning outcomes of the first half of ACCT 582 include the following:
By the time students finish the second half of ACCT 582, they should be able to
- explain and apply the rules used to prepare and report thefinancial statement information related to M&A transactions by solving problems and analyzing transactions and Form 10-K disclosures.
- explain and apply the rules for fair value accounting as they relate to M&A transactions by solving problems and analyzing transactions and Form 10-K disclosures.
- analyze how a given M&A transaction (including the type of consideration used) impacts earnings per share and important financial ratios by solving problems based on information presented in cases and Form 10-Ks demonstrate an understanding of the usefulness and limitations of financial accounting information and disclosures related to M&A transactions by preparing written reports based on information presented in cases, Form 10-Ks, and articles in the financial press.
- Apply ethical principles and professional standards in analyzing situations and making informed decisions.
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Grading for second half of ACCT 582 Maximum
% of Points Points
Midterm 36% 90
Final Examination 46% 115
3 assignments 18% 45
Total 100% 250
Assignment Submission Policy: Assignments will include a current event and 2 problems which will be assigned in class. The assignments must be turned in on the due date prior to the start of class either in person or via email. Any assignment turned in late will not receive full credit. Late work will be accepted only at the discretion of the professor, depending on the circumstances. It should be noted that the Practice Problems in the syllabus are not required to be turned in. It is highly suggested that you complete such problems to ensure you understand the course materials.
Exams:Calculators will be acceptable for the midterm and final but no notes or textbooks will be allowed. The final will be cumulative.
Grading for ACCT 582 overall: The points you earn in the first half of ACCT 582 (tax aspects) will be combined with the points you earn in the second half of ACCT 582 (financial accounting). Your grade for ACCT 582 (entire course) will be based on your total points in the first and second halves of the course added together (each half of the course will be scaled to yield the same number of maximum points), and the two halves of the course are weighted equally. Using these total points, grades will be assigned.
No late work will be accepted. There are no make-ups for exams; please arrange your interview schedule appropriately. Refer to “Can’t Miss Dates” on page 1 of this syllabus to see the dates involved.
Required Course Materials
The text for the second half of ACCT 582 is the custom e-text available at the e-bookstore or the hard copy version available at the student bookstore.
To find our text at this website, type “Patrick Kinsella” into the “Looking for new materials” search box. The book is Accounting for Mergers and Acquisitions compiled for ACCT 582.
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STUDENT LEARNING OUTCOMES
Graduate Program Student Learning Outcomes
Below are the five Student Learning Outcomes developed by the USC Leventhal faculty and administration and filed with the AACSB, the accrediting body for accounting and business schools: also indicated is the emphasis on each learning objective in the first half of ACCT 582:
1. Technical, Conceptual, Problem-Solving Requirement
Students will be competent in and be able to apply discipline-specific knowledge and skills in the fields of accounting or taxation. This learning outcome includes the development of critical thinking and problem solving skills, as well as an understanding of the strategic role of accounting in business organizations and society. Emphasis: Heavy
2. Professional Development Requirement
Students will be able to communicate clearly, and strategically, after considering the relevant audience, situation, and purpose of the communication. Students will develop the ability to work productively with others to accomplish established goals. Emphasis: Heavy
3. Research/Life-Long Learning Requirement
Students will be able to use relevant research databases and academic/professional literature to gain new knowledge and analyze business situations. Emphasis: Light
4. Ethical Principles and Professional Standards Requirement
Students will be able to apply ethical principles and professional standards in analyzing situations and making informed decisions. Emphasis: Medium
5. Globalization Requirement
Students will be able to demonstrate an international perspective and appreciation for diversity and cultural differences, along with their significance in global business. Emphasis: Light
GRADING POLICY
We adhere to the USC Leventhal School of Accounting and Marshall School of Business grading standards for graduate programs. In general, final course grades at the graduate level in a core course average approximately B+ (3.3), but may vary based on class performance. For elective courses, the class average is usually higher--approximating 3.5, which is between a B+ and an A-. You must receive a C or better to pass a required class, and you must have an overall B average (3.0 minimum) in order to graduate from USC. The graded elements of this course are listed in this syllabus along with information on how they will be evaluated.
ACADEMIC CONDUCT
Students enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code. Students are responsible for obtaining, reading, and understanding the Honor Code System handbook. Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook. For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101.
Plagiarism– presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism inSCampusin Section 11 Behavior Violating University Standards Other forms of academic dishonesty are equally unacceptable. See additional information inSCampusand university policies on scientific misconduct,
SUPPORT SYSTEMS
Students whose primary language is not English should check with the American Language Institute which sponsors courses and workshops specifically for international graduate students.
The Office of Disability Services and Programs ( certification for students with disabilities and helps arrange the relevant accommodations.
If an officiallydeclared emergency makes travel to campus infeasible, USC Emergency Information ( will provide safety and other updates, including ways in which instruction will be continued by means of blackboard, teleconferencing, and other technology.
Discrimination, sexual assault, and harassment are not tolerated by the university. You are encouraged to report any incidents to the Office of Equity and Diversity or to the Department of Public Safety This is important for the safety of the whole USC community. Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report or can initiate the report on behalf of another person.Relationship and Sexual Violence Prevention and Services (RSVP) provides 24/7 confidential support, and the sexual assault resource center webpage describes reporting options and other resources.
EMERGENCY INFORMATION
USC Emergencies 740-4321
USC Emergency Information Line 740-9233
USC Information Line 740-2311
KUSC Radio 91.5
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(1) March 7 Introduction and Overview
Merger Rationale
Readings: Chapter 1 p.1-9
Chapter 3 p. 49-53
(2) March 9Accounting for Non-controlling interests
(Fair value and equity method)
Readings: Chapter 2 p. 11-13, 15-23, 32-34
Practice Problems: 8 (p.39) and 16 (p.41)
(3) March 21 Consolidation Accounting-dissolution (Acquisition Method)
Readings: Chapter 3 p.53-65
Practice Problems: 28 (p.90), 31a (p.91)
(4) March 23Consolidation- no dissolution
Readings: Chapter 3 p. 65-72
Practice Problems: 27 (p.89), p31b (p.91)
Read Tail O’ The Dog problem
(5) March 28 Fair Value Concepts
Reference Chapter 3 p.57-59
(6) March 30Goodwill Impairment
Readings: Chapter 4 p. 117-123
Practice Problems: 17 (p.136) and 19 (p.137)
(7) April 4Contingent Consideration/Midterm overview
Readings: Chapter 4 p.125-126
Practice Problem: 34a,b (p.147)
(8) April 6Midterm
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(9) April 11Guest Speaker- Sam Halls (Shamrock Capital)
Discussion regarding the M&A marketplace
& due diligence
10) April 13Midterm review
Variable Interest Entities
Enron Story
Readings: Chapter 6 p.213-219
Chapter 8 p.283, 293-297
(11) April 18Day 2 Consolidation
Readings: Chapter 4 p.95-108
Practice Problems: 30 (p.144) and 32 (p.146)
(12) April 20Acquisitions less than 100%
Readings: Chapter 5 p. 159-165
Practice Problem: 27 (p.199)
(13) April 25Financial Statement Impacts/Disclosures
(14) April 27Course Wrap Up and Review
May 10 2pm-4pmFinal Exam
Note: All page number referenced are those at the top of the custom created textbook, Accounting for Mergers & Acquisitions, Kinsella