University of San Carlos

School of Business and Economics

Department of Accountancy

SYLLABUS
Course No.

AC 511

Course Title

Advanced Financial Accounting and Reporting Part I

Credit

3 units (lecture)

Prerequisite Courses

AC 506: Financial Accounting and Reporting Part II

Revised

by Marvic John M. Leyson

Revised 2nd semester, AY: 2011 2012

Overview of the Course

This course deals with special contemporary accounting issues in the practice of accountancy. It includes the proper application of contemporary accounting techniques and
methodology to advanced accounting problems and situations like branch and home office relationship, special revenue recognition principles.
This course is designed to provide the student with conceptual knowledge of financial accounting for business enterprises. It covers discussions on financial reporting, and
disclosures in conformity with Philippine Accounting Standards (PAS), Philippine Financial Reporting Standards (PFRS), and International Financial Reporting Standards
(IFRS).

Course Description
This course is the first part of advanced accounting. It discusses advanced accounting principles applicable to special problems encountered by business entities and
accounting practitioners as well. It also covers the basic principles and concepts underlying income recognition and measurement. Greater in-depth understanding and higher
level of analytical and critical thinking are required compared to the fundamental and intermediate accounting courses.

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General Objectives
During the semester, the students are expected to:
1. understand the fundamental principles, concepts, and theories associated with business operations involving home office and branch, installment sales, franchise, and
long-term construction contracts;
2. be familiar with the basic concepts and underlying principles involved in accounting for joint ventures, fire insurance and build-operate-transfer scheme;
3. demonstrate the competencies required in the practice of the accountancy as a competent and socially responsible professionals; and
4. recognize the issues and developments in the practice of accountancy relevant to the needs of the local, national, and global communities in a rapidly changing world.

Classroom Management
1. Attendance is a MUST. Attendance in all classes is required. Being present in class means that you attend each class, and come prepared having read the chapters and
the exercises or cases that are assigned for that class. There are 54 sessions/hours in this course and you may incur only ten (10) absences for MWF schedules or seven
(7) absences for TTH schedules. Otherwise, you will automatically be dropped from class and receive a grade of either NC (No Credit) or a failing grade of 5.0 whichever is
applicable.
2. Readmission. Students who incur three consecutive (3) absences will be asked by the instructor to see the Department Chair to secure permission to be re-admitted to
class. A re-admission slip should be properly accomplished for this purpose.
3. Tardiness is discouraged. Make sure that you come on time, as it becomes a source of irritation for the members of the class and the professor when students come late.
As a policy for this class, you will be considered late if you come to class after 15 minutes of the time, three instances of tardiness whether incurred consecutive or not is
considered one absence. Learn to be professionals; respect for other peoples time is a principle that should be valued.
4. Seat Plan. A permanent seat plan will be made at the start of the semester. You are advised to keep to your assigned seating arrangement; otherwise, you will be marked
absent for that day.
5. Prayer. Classes should always start and end with a short prayer. The instructor can opt to lead the prayer or assign students to do this alternatively.
6. Classroom Management. Students should assist in maintaining the orderliness and cleanliness of the classrooms. Graffiti writing is strictly prohibited. Any student found
violating this rule will be punished with the appropriate sanction. Before leaving the classroom, the instructor with the help of the students, should ensure that no
litter/garbage is left behind and that chairs are in their proper order. Should the class be the last schedule for the day, the instructor should arrange that the lights and air
conditioning units are switched off.

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7. Mobile Phones. Use of mobile phones inside the classroom is strictly prohibited. Switch them off or place them under silent mode before entering your classes. The
instructor has the right to confiscate mobile phones that rings and/or is used during class hours. The confiscated unit can only be claimed in the Deans office at the end of
the semester.
8. Eating and Drinking. Food and drinks are not allowed inside the classroom and in the corridors. It is your responsibility to properly schedule your classes so that meals
and snacks can be taken at its proper time.
9. Consultation Hours. Students are encouraged to see the instructor during consultation hours for any concerns, questions and assistance with regards to the course.
Instructors should ensure that they are available on these hours and at the agreed location.
10. Submissions. Timely submission of written requirements will be strictly followed. Just like when you submit a report to the Bureau of Internal Revenue (BIR), BIR would
charge you penalty. The penalty is collected not for the purpose of making money; it is meant to discourage late submission of reports. It is also the same in this class.
The penalty for late submission of reports is non-acceptance
11. Library Hours. Maximize the use of the library resources. The library hours are: Monday to Saturday 7:30 a.m. to 8:00 p.m.
12. Enjoy every moment of the class. Lastly, learning should be fun and exciting. Enjoy your classes! It will be such a tragedy if you will be miserable in the class.
Participate so you get the most of this course.

Suggested Learning Experiences

1.
2.
3.
4.
5.
6.
7.
8.

Lecture-Discussion
Practice Tests
Individual Assignments
Problem Solving Exercises
Pretests
Unit Tests and Quizzes
Seatworks
Boardwork

Course Requirements
1. Regular Attendance
2. Active Class Participation

Midterms:
Tests/Quizzes
Other Requirements Midterm Examination -

1/3
1/3
1/3

3. Passing Grades
Finals:
4. Completion & Submission
of Seatworks and Assignments
5. Right attitude toward course

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Grading System

Midterm Grade
Class Standing after
Midterm
Final Examination

1/3

1/3
1/3

For purposes of transmutation, the course will use the following grade equivalent (at 50% passing):
Grade
Equivalent
1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2.0

Raw Score
100
98
95
93
90
88
85
83
80
78
75

99
97
94
92
89
87
84
82
79
77

Specific Objectives

Raw Score
73
70
68
65
63
60
56
55
53
50
Below 50

Contents

74
72
69
67
64
62
59
57
54
52

Grade
Equivalent
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3.0
5.0

Mode of Delivery /
Learning Activities
and Resources

Assessment
Scheme

WEEK 1 = 3 hours
Orientation
1.
2.
3.
4.
5.
6.
7.
8.

Introduction of the members of the class

Setting of expectations
Discussion of classroom rules and policies
Revisit Vision and Mission Statements of the
University of San Carlos
Checking of admission slips
Setting of seat plan
Grouping of students
Course Introduction:
Distribution and presentation of the course

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A.
B.
C.
D.
E.
F.
G.
H.

Introduction
USC Vision-Mission
Course Description
Course Objectives
Course Requirements
Alternative Activities
Grading System
House Rules

roup dynamics

G
Participation
I

Written summary

Question & answer

nteraction

eveling expectations

syllabus.
Discussion of the content of the syllabus for
the purpose of clarification.
Explore course structure, sequencing of
subject matter.
Discussion on the course requirements and
grading.

and-outs, notes

Learning statements

Recitation

WEEK 2 and 3 = 6 hours

Unit I Accounting for Agency Transactions
At the end of the chapter, students should be able A. Sales Agencies
to:

Introduction of Concepts
1. Contrast between a sales agency and a

Accounting Process
branch.

Journal Entries
2. Account for sales agency when agency net

Determination of Agency Net

income is:
Income
determined separately
not determined separately
Unit II Accounting for Branch Operations
At the end of the chapter, students should be able
to:
1. Record transactions between the home office
and the branch.
2. Prepare separate financial statements of the
branch and home office.
3. Prepare combined financial statements for
home office and branch.
4. Reconcile home office and branch accounts
(reciprocal accounts).

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B. Branches

Introduction of Concepts

Accounting Process

Journal Entries

Separate Financial Statements

Combined Financial Statements

Reconciliation of Reciprocal
Accounts

Lecture-discussion

Pre-tests

Boardworks

Class Participation

Problem Solving Exercises

Assignments

Accounting Case: Why Companies Have Agencies and Branches

Seatworks

Practice Tests

Unit Tests

WEEK 4, 5 and 6 = 9 hours

Unit III Special Problems in Home Office and
Branch Accounting
At the end of the chapter, students should be able A. Special Problems
to:

Interbranch
transactions
1. Account for and record interbranch transactions
involving
involving transfer of cash and merchandise.
transfer of cash and merchandise
2. Account for and record billing at amounts other

Branch billing at amounts other

than cost for branch-transferred merchandise.
than cost
3. Account for and record freight costs on

Freight costs on shipments

merchandise shipments.

Branch expense allocation

4. Account for and record branch expense

Branch true income

allocation by the home office.

Combined income statement

5. Determine the branch true income.
6. Prepare the combined income statement for
the home office and branch.

Lecture-discussion

Pre-tests

Boardworks

Class Participation

Problem Solving Exercises

Assignments

Accounting Case: How the Home

Office and Branches Work
Together

Seatworks

Practice Tests

Unit Tests

Pre-tests

Class Participation

Assignments

Seatworks

Practice Tests

WEEK 7, 8 and 9 = 9 hours

Unit IV Accounting for Installment Sales
At the end of the chapter, the students will be able A. Nature and Characteristics
to:

Introduction of Concepts
1. Discuss and explain the nature, characteristics

Accounting Process
and operations of installment sales.

Journal Entries
2. Explain and apply the methods of recognizing B. Gross Profit Computation
gross profit on installment sales.
C. Accounting Procedures
3. Apply the accounting procedures governing

Sale of personal property

installment sales for:

Sale of real estate property

Sale of personal property

Trade-ins
Sale of real estate property

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Lecture-discussion

Boardworks

Problem Solving Exercises

Accounting Case: Companies

using Installment Sales Method
(e.g. Appliance Stores)

Trade-ins

Repossessions
Repossessions

Interest
computation
using
annuity
Interest computation using annuity
Method
method
4. Prepare the financial statements of entities with D. Financial Statement Preparation
installment sales.
WEEK 10

Unit Tests

MIDTERM EXAMINATIONS

WEEK 11 = 3 hours
Unit V Accounting for Consignment Sales
At the end of the chapter, the student will be able A. Nature and Characteristics
to:

Introduction of Concepts
1. Discuss and explain the nature, characteristics

Consignor and Consignee

and operation of consignment sales.

Accounting Process under both

2. Account for consigned goods in the books of
Consignee and Consignors books
the:

Journal Entries under both

Consignor
Consignee and Consignors books

Consignee
B. Determination of Consignment Income
3. Determine consignment income under:

Completed consignment

Completed consignment

Uncompleted consignment

Uncompleted consignment
C. Financial Statement Preparation under
4. Prepare financial statements from the viewpoint
viewpoint of Consignor
of the consignor.

Lecture-discussion

Pre-tests

Boardworks

Class Participation

Problem Solving Exercises

Assignments

Accounting Case: How Consignment Works

Seatworks

Practice Tests

Unit Tests

Pre-tests

Week 12 and 13 = 6 hours

Unit VI Accounting for Long Term Construction
Contracts
At the end of the chapter, the student will be able

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A. Nature and Characteristics

Introduction of Concepts

Lecture-discussion

to:

Accounting Process
1. Discuss and explain the nature, characteristics

Journal Entries
and operation of long term construction B. Accounting Methods
contracts.

Percentage
of
completion
2. Account for long term construction contracts
method
using:

Cost recovery or zero-profit

Percentage of completion method
method
Cost recovery or zero-profit method
C. Accounting Procedures
3. Account for long term construction contracts for

Revision of estimates
revision of estimate and change order

Change order

Boardworks

Class Participation

Problem Solving Exercises

Assignments

Accounting Case: What Method

Do Construction Companies
Commonly Use?

Seatworks

Unit Tests

Lecture-discussion

Class Participation

Boardworks

Assignments

Problem Solving Exercises

Seatworks

Practice Tests

WEEK 14 and 15 = 6 hours

Unit VII Accounting for Financially Distressed
Corporations
At the end of the chapter, the students would be
able to:
1. Discuss and explain the terms, nature and
characteristics of insolvency.
2. Enumerate and explain the remedies available
for relied of debtor.
3. Understand the concepts behind and compute
for the rates of estimated payment and
deficiency to unsecured creditors.
4. Prepare the statement of affairs.
5. Prepare the statement of realization and
liquidation.

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A. Insolvency/Bankruptcy

Defined and Differentiated

Voluntary vs. Involuntary

Secured vs. Unsecured Creditors

Assignee, Trustee, Receiver

Proceedings
B. Remedies Available for Relief of Debtor

Equity Insolvency

Bankruptcy Insolvency
C. Statement of Affairs

Nature, Purpose and Importance

Form and Content

Computation
of
Amount
Available,
Rate of Estimated Payment and
Deficiency to unsecured Creditors

Preparation of the Statement of

Affairs
and
the
Supporting
Deficiency Statement

Accounting Case: Corporate

Rehabilitation in the Philippines

Practice Tests
Unit Tests

D. Statement
of
Realization
and
Liquidation

Nature, Purpose and Importance

Form and Content

Analysis of Transactions and its

Effect on the Statement

Preparation of the statement of

realization and liquidation
WEEK 16 = 3 hours
Unit VIII Commercial Franchise Operations
(Point of View of Franchisor)
At the end of the chapter, the students would be
able to:
1. Discuss and explain the nature, characteristics
and operation of franchises.
2. Explain and apply the methods of recognizing
franchise revenue under:

Accrual basis

Installment basis
3. Account for initial franchise fees and
continuing franchise fees.
4. Determine net income earned by the
franchisor.

A. Nature and Characteristics

Introduction of Concepts

Accounting Process

Journal Entries
B. Methods of Recognizing Franchise
Revenue

Accrual basis

Installment basis
C. Accounting Procedures

Initial Franchise Fees

Continuing Franchise Fees

D. Determination of Franchisor Net
Income

Lecture-discussion

Class Participation

Boardworks

Assignments

Problem Solving Exercises

Seatworks

Accounting
Case:
Philippine Franchises

Accounting Case: How Franchises Work

A. Joint Ventures

Lecture-discussion

Common

Practice Tests

Unit Tests

Class Participation

WEEK 17 and 18 = 6 hours

Unit IX Joint Venture and Associated
Enterprises and Fire Insurance
At the end of the chapter, the students would be

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able to:
1. Discuss and explain the nature, characteristics
and operation of joint venture and associated
enterprises.
2. Record the different transactions under joint
ventures.
3. Explain the financial reporting of interests in
joint venture.
4. Discuss and explain the nature, characteristics
and operation of insurance contracts.
5. Account for fire insurance (point of view of
insurer) and record the transactions under
insurance contracts.
6. Compute income under insurance contracts.
WEEK 19

FINAL EXAMINATIONS

TOTAL = 54 HOURS

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Introduction of Concepts
Accounting Process
Journal Entries
Financial Reporting of Interests

Boardworks

Assignments

Problem Solving Exercises

Seatworks

Accounting Case: Joint Ventures

in the Philippines

Accounting Case: How Fire

Insurance Companies Work

B. Fire Insurance Contracts (Point of View

of Insurer)

Introduction of Concepts

Accounting Process

Journal Entries

Measurement of Income

Practice Tests
Unit Tests

REFERENCES
A. BOOKS
Textbook:

Guerero, P., Peralta, J., Advanced Accounting. Volume One. 2008 edition, GIC Enterprises and Co., Inc, C2008
Guerero, P., Peralta, J., Advanced Accounting. Volume Two. 2008 edition, GIC Enterprises and Co., Inc, C2008

References: Skousen, K. F., Stice E. K. Stice, J. D., Intermediate Accounting. 15th edition, South-Western College Publishing, C2004.
Statement of Financial Accounting Standard. Compiled by the Accounting Standards Council, PICPA.
Kinnel, Kieso & Weygandt, Financial Accounting. 3rd edition, John Wiley and Sons, Inc., C2004.
Valix & Peralta, Financial Accounting. 2000 edition.
Epstein B. J., Mirza., International Accounting Standards. C2001.
B. WEBSITES
http://skousen.swcollege.com
Bank for International Settlements
http://skousen.swcollege.com
Intermediate Accounting, Skousen:
http://www.wiley.com/college/kieso
Intermediate Accounting, Kieso & Weygandt:
http://www.wiley.com/gaap
International Accounting Standard, John Wiley & Sons:
http://www.booksites.net/benedict
Practical Accounting:

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http://www.rutgers/edu/accounting/raw/fasb
Financial Accounting Standards Board
http://www.ifac.org
International Federation of Accountants

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RUBRIC
CRITERIA

KNOWLEDGE

SKILLS

ATTITUDES and VALUES

Individual Performance

30 pts

shares readings, explains, expounds

reasoning, justifying, demonstrating, responding

diligence, patience, perseverance

Group Involvement

20 pts

contributes ideas, communicates, listens

relating, agreeing, sharing, deciding, collating

tolerance, consideration, kindness

Class Commitment

20 pts

consults, discusses, decides, relates

listening, conferring, associating, synthesizing

openness, dedication, objectivity

Practical Implications

30 pts

plans, implements, evaluates, improves

forecasting, articulating, applying, modifying

persistence, determination, optimism

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Presentation Rubric

Attributes

Resource
Utilization

Topic
Discussion

Visuals &
Supplementary
Materials

Above Standard

At Standard

Attribute Still a Goal

(5-4.5)

(4.5-3.5)

(3.5-0)

Utilized all resources described on Information

Sheet to acquire info; incorporated info
information presentation and Web page.

Utilized some resources described on Information

Sheet to acquire info; incorporated information into
presentation and Web page.

Utilized few or no resources described on

Information Sheet to acquire information
into presentation and Web page.

(10-9)

(9-7)

(7-0)

Informed when speaking (without reference to

notes) about the material.

Informed when speaking about the material while

referencing notes.

Unable to accurately discuss information

related to topic or simply read information
from paper.

(10-9)

(9-7)

(7-0)

Oral report included computer-generated and/or

Oral report included computer-generated and/or hand
hand made visuals (clip-art, graphs, tables,
Oral report did not include visuals or
made visuals (clip-art, graphs, tables, charts, and
charts, and QuickTime movies), and was
supplementary materials or materials used
QuickTime movies) that enhanced presentation, but
presented with multimedia software that
did not enhance presentation.
was not presented with multimedia software.
enhanced presentation.
(15-13.5)

Hyper Studio or Created pages accurately reflect the groups

Web Page
data, results and rationale. It is organized in a

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(13.5-10.5)

(10.5-0)

Created pages accurately reflect the groups data,

results and rationale. It is organized in a way that

Created pages are incomplete, missing or

do not get across the group's information,

Attribute
Points
Earned

/5

/10

/10

/15

Utilization

way that enhances the reader's ability to

understand the information, data and results.

allows the reader to understand the information, data

and results.
Total Presentation Points Earned

http://ed.fnal.gov/help/97/sightsound/litscrub.html

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data and results.