SAN FRANCISCO STATE UNIVERSITY
ACCOUNTING 801 (Intermediate Financial Accounting II)
Spring 2008
INSTRUCTOR: Dr. Su-Jane Hsieh
OFFICE: DTC 583 email: CLASS HOURS:
OFFICE HOURS: M 14:20-14:50 W 18:30-21:15
W 13:50-14:20
15:20-18:20
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COURSE DESCRIPTION: Accounting 801 is the second of two courses in intermediate financial accounting. The primary emphasis of the course is directed to (a) the basic concepts and theories underlying contemporary external financial reporting and (b) alternative rules and principles used to measure and analyze financial data with respect to corporate business organizations. In general, the course is concerned more with the production of financial information for external users than the use of financial information by internal users. The topics to be covered include accounting for long-term liabilities, leases, investments, accounting for shareholders’ equity, stock-based compensation, earnings per share, pensions, other postretirement benefits, and the statement of Cash Flows.
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Prerequisite: BUS 780 with a grade of B- or better.
REQUIRED TEXT: Intermediate Accounting (4th edition, Irwin McGraw-Hill) by Spiceland, Sepe and Tomassini.
Mastery of the Financial Accounting Research System (FARS) Through Cases (Wiley) by Wanda A. Wallace.
An alternative to the purchase of FARS CD is the subscription of FARS on line. The website for FARS on line subscription is:
http://he-cda.wiley.com/WileyCDA/Section/id-106057.html
REQUIRED READINGS:
Imhoff, E.A., R. C. Lipe, and D.W. Wright. 1991. Operating leases: Impact of Constructive Capitalization. Accounting Horizons (March):51 – 63.
_____ 1997. Operating Leases: Income Effects of Constructive Capitalization. Accounting Horizons (June):12-32.
Reilly, D. 2006. Outside Audit: Up for Overhaul: Lease Accounting---Rule makers Aim to Rein in Off-the-Books Approaches Possibly Exposing Billions. The Wall Street Journal (July 18).
Weil, Jonathan. 2004. Open Secrets: How leases Play a Shadowy Role in Accounting --- Despite a Post-Enron Push, Companies Can Still Keep Big Debts Off Balance Sheets. The Wall Street Journal (September 22).
Willams, Patricia. 2005. The Effect of Pension Income on the Quality of Corporate Earnings: IBM, A Case Study. Issues in Accounting Education (May): pp167-181.
RECOMMENDED READINGS:
Beattie V., K. Edwards and A. Goodacre. 1998. The Impact of Constructive Operating Lease Capitalization on Key Accounting Ratios. Accounting and Business Research (28) (autumn):233-254.
Bennett, B. K. and M.E. Bradbury. 2003. Capitalizing non-cancelable operating leases. Journal of International Financial Management & Accounting (summer):101- 114.
Benston, J. George and A. L. Hargraves. 2002. Enron: what happened and what we can learn from it. Journal of Accounting and Public Policy (21):105-127.
Lipe, R. C. 2001. Lease Accounting Research and the G4+1 Proposal. Accounting Horizons (September):299-310.
Ryan, G. S. (Chair), R. Herz, T. Iannaconi, L. A. Maines, K.G. Palepu, K. Schipper, C. M. Schrand, D. Skinner, and L. Vincent. 2001. Evaluation of the Lease Accounting Proposed in G4+1 Special Report. Accounting Horizons,(September):289-298.
HOMEWORK,EXAMINATIONS,CLASS POLICY, EVALUATION, WRITTEN ASSIGNMENTS, CASE PROJEC AND HOMEWORK ASSIGNMENTS:
I. Homework
The problems assigned for each class session are to be attempted by the student before coming to class. The student can only learn intermediate accounting by doing the assignments before the class period. My duties as a teacher of accounting are to help you, the student, overcome any difficulties you might have with the material assigned, do some (not all) of the problems assigned, and expand upon the material with examples from the business world. The student cannot learn all he/she
needs to know from just sitting in class. Homework problems and other assignments must be done in order for the student to gain the necessary background to go on to other courses and work.
II. Examinations
Three examinations are given throughout the semester. Examinations will include a combination of multiple-choice, problems, and essay. Examinations I and II are scheduled for February 27 and April 9, respectively. The final examination is scheduled for May 21, 6:30pm to 9:00pm.
III. Class Policy and Evaluation
Classes are generally conducted using a lecture and problem-solving format. Class notes are available at userwww.sfsu.edu/~sjhsieh. No make-ups will be given for any exam. Class participation is an integral part of the learning process in this course and hence is included in your final grade. Classes missed will count as deductions to your class participation (you cannot participate if you miss the class). Students are expected to prepare for the day's material including both reading assignments and problems assigned before coming to the class. An incomplete grade cannot be used to substitute for any other grade.
Your final grade will be based on the following:
Possible Points
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Exam I 100 points
Exam II 100 points
Final Exam 100 points
Written Assignments 30 points
Case Project 50 points
Class Participation 30 points
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Total 410 points
IV. Written Assignments and Case Project
A. Written Assignments
Two written assignments will be assigned during the semester. Each student is expected to turn in the assignment on the due date. Each assignment should be typed and double-spaced. The assignments will be graded on technical merit and professionalism (including presentation, grammar, spelling, etc.).
B. Case Project
A case pertaining to accounting for leases will be assigned to a group of two students during the semester. Each group is expected to turn in a professional looking case write-up no less than four pages (but no more than eight pages), excluding exhibits, tables and diagrams. The paper should have an introduction of the firms under study and their industries, a technical analysis section (i.e., including some financial statement or ratio analysis), a conclusion and any necessary exhibits. The paper shall be graded on technical merit, and professionalism (including presentation, grammar, spelling, etc.). Both group members shall receive the same grade and both members are expected to contribute equally to the development of the paper.
V. Homework Assignments
CLASS DATE CHAPTER SUGGESTED HOMEWORK
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1 1/30 14. Bonds and Long-Term Notes
2 2/6 -present values and
annuities, E14-2,E14-6,
-bond issuance, E14-14,P14-1,
-amortization of dis./pre. P14-5,P14-6,
-extinguishments of debt. P14-14,
-convertible debts, E14-19,P14-19,
-troubled debt restructuring P14-9,P14-20.
3 2/13 15. Accounting for Leases
4 2/20 -basics of lease, E15-11,E15-14,
-accounting by lessees, E15-16,E15-17,
-bargain purchase options, P15-8,P15-9,
-accounting by lessors. P15-11.
5 2/27 Exam I
6 3/5 12. Investments
7 3/12 -investments in debt secur., E12-2,E12-7
-investments in equity secur. E12-8,E12-13,
-transfers between categories, P12-5,
-Equity Method, P12-7,P12-8,
-reporting under GAAP. P12-9.
8 3/19 18. Shareholders’ Equity
-issuance of common stock, E18-6,E18-15,
-treasury stock, E18-16,E18-20,
-features of preferred stock P18-2,P18-5,
-convertible preferred stock P18-8,P18-9,
-retained earnings, P18-13.
-dividends,
-quasi-reorganization.
3/26 Spring Recess. No Class.
9 4/2 18. Continued.
10 4/9 Exam II
11 4/16 19. Share-Based Compensation and
Earnings Per share
-accounting for stock options, E19-4,E19-7,
-accounting for employee E19-10,P19-2,
share purchase plans, E19-18,P19-10,
-simple capital structure, P19-11,P19-13,
-complex capital structure, P19-14.
-additional EPS issues.
12 4/23 21. The Statement of Cash Flows P21-1,P21-7,
-the usefulness of cash P21-8,P21-11,
flow information,
-operating, investing and
financing activities,
-preparation of a statement
of cash flows.
13 4/30 21. Continued.
14 5/7 17. Pensions and Other Post-
15 5/14 Retirement Benefits
-the nature of pension plans, E17-9,E17-10,
-the pension obligation and E17-12,E17-14,
plan assets,
-determining pension expense, E17-17,
-amorti. of Prior service cost,
-amorti. of net gain or loss, P17-8,P17-13,
-minimum pension liability, E17-24,E17-25,
-reporting issues, E17-26,P17-16,
-Postretirement benefits other P17-9.
than pensions.
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