1

Course No.

AC 503

Course Title
Credit Units

:
:

Financial Accounting and Reporting Part I

6
TOPICS

Student Learning Outcomes

(Expected Course Competencies)

Course Orientation (3 hours)

USC Mission Statement

School of Business and Economics and Department of Accountancy
aims
Duties and responsibilities of a student
Discussion of final requirements and grading systems
Expectations about the subject and from the teacher

Review of Basic Accounting Concepts

Definition of Accounting
Purpose and Function of Accounting
Uses of Accounting Information
Branches of Accounting
Overview of Financial Accounting (3 hours)
Definition of Financial Accounting
Purpose and Function of Financial Accounting
Uses and Limitations of Financial Accounting Information
Philippine Financial Reporting Standards
Standard Setting Bodies
Application of IFRS and PFRS
Harmonization of Accounting
Preparation and Presentation of Financial Statements (6 hours)
Purpose, Status and Scope of General Purpose Financial Statements
Underlying Assumptions

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to accounting in general.

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to financial accounting.
2. Reflect on the applicability of IFRS in the Philippine setting.
3. Render an opinion on the on-going harmonization effort of accounting
principles.

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to the framework and general

Qualitative Characteristics and Con-straints of Accounting
purpose financial statements and its elements.
Information
2.
Apply the principles of the Philippine Financial Reporting Standards
Elements of Financial Statements Definition, Recognition and
in the preparation and presentation of financial statements.
Measure-ment
3.
Solve problems involving the recog-nition and measurement of the
Capital and Capital Maintenance
elements of financial statements.
Statement of Comprehensive Income
4.
Prepare a statement of comprehensive income, income statement and
Income Statement
statement of financial position in accordance with PFRS.
Statement of Financial Position

Financial Instruments: Cash and Cash Equivalents (6 hours)

Definition and Recognition
Initial and Subsequent Measurement
Cash Management and Control
Bank Reconciliation
Petty Cash Fund

Financial Instruments: Overview (12 hours)

Applicable Standards: PFRS 9, PAS 39 (to be replaced) and PAS 32
Definition of Terms and Scope
Classification

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to cash and cash equivalents
and cash control and management.
2. Apply the principles of the Philippine Financial Reporting Standards
in the recognition and measurement of cash and cash equivalents.
3. Solve problems involving the recog-nition, measurement,
management and control of cash and cash equivalents.
4. Prepare journal entries involving the recognition, measurement and
mana-gement of cash and cash equivalents.

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to financial instruments in
general, accounts, notes and loan receivables and payables, receivable
financing and debt restructuring.
Financial Instruments: Receivables and Payables
2. Apply the principles of the Philippine Financial Reporting Standards
Definition of Terms
in the initial and subsequent measurement and derecognition of
Classification and Presentation
accounts, notes and loans receivables and payables.
Accounts Receivable and Payable: Initial and Subsequent
3. Solve problems involving the initial and subsequent measurement and
Measurement
derecognition of accounts, notes and loans receivables and payables,
Doubtful Accounts Estimation
receivable financing and debt restructuring.
Notes Receivable and Payable: Initial and Subsequent Measurement
4. Prepare journal entries involving the initial and subsequent

measurement and derecognition of accounts, notes and loans

Loans Receivable and Payable: Initial and Subsequent Measurement
receivable, receivable financing and debt restructuring.
Receivable Financing
Debt Restructuring
Financial Instruments: Financial Assets at Fair Value (6 hours)
Debt and Equity Instruments
1. Apply the principles of the Philippine Financial Reporting Standards
Trading Securities
in the initial and subsequent measurement and derecognition of
Initial and Subsequent Measurement
financial assets measured at fair value.
Irrevocable Election of Presenting Gains and Losses in Other
2. Solve problems involving the initial and subsequent measurement and
Comprehensive Income
derecognition of financial assets measured at fair value.
Reclassification
3. Prepare journal entries involving fi-nancial assets measured at fair
value.
Financial Instruments: Financial Assets at Amortized Cost (12 hours)
Definition of Terms: Investment in Bonds and Bonds Payable
1. Identify, enumerate, classify and define the fundamental standards,
Initial Measurement
concepts, principles and theories related to financial assets at
Subsequent Measurement: Straight Line Amortization
amortized cost and bonds.
Subsequent Measurement: Bond Outstanding Amortization
2. Apply the principles of the Philippine Financial Reporting Standards
Subsequent Measurement: Effective Interest Amortization
in the recognition, initial and subsequent measurement and
Computation of Market Price
derecognition of financial assets at amortized cost and bonds.
Computation of Effective Rate
3. Solve problems involving financial assets at amortized cost and bonds.
Sale of Bond Investments
4. Prepare journal entries involving financial assets at amortized cost and
Retirement of Bonds: At Maturity Date
bonds.
Retirement of Bonds: Before Maturity Date
Financial Instruments: Investment in Equity Securities and
Shareholders Equity (18 hours)
Definition of Terms
Initial and Subsequent Measurement
Share Capital, Share Premium and Subscriptions
Dividends: Cash, Property, Liability and Stock
Share Split and Stock Rights
Donation of Capital

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to investment in equity
securities and shareholders equity.
2. Apply the principles of the Philippine Financial Reporting Standards
in the recognition, measurement, classifi-cation, presentation and
derecog-nition of investment in equity securities and shareholders

Redeemable, Convertible and Shares with Share Warrants

Treasury Shares
Appropriation of Retained Earnings
Statement of Retained Earnings
Statement of Changes in Shareholders Equity
Recapitalization and Quasi-Reorgani-zation

Financial Instruments: Investment in Associates (6 hours)

Definition of Terms
Recognition Principles
Initial and Subsequent Measurement: Equity Method
Investment Income
Impairment Loss
Upstream & Downstream Transactions
Alternative Measurement: Cost Method

equity.
3. Solve problems involving investment in equity securities and
shareholders equity.
4. Prepare journal entries involving investment in equity securities and
shareholders equity.
5. Prepare a statement of retained earnings and statement of changes in
shareholders equity in accordance with PFRS.

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to investment in associates.
2. Apply the principles of the Philippine Financial Reporting Standards
in the recognition, measurement, classifi-cation, presentation and
derecog-nition of investment in associates.
3. Solve problems involving investment in associates.
4. Prepare journal entries involving investment in associates.

Compound Financial Instruments (6 hours)

Definition of Terms: Bonds Payable with Share Warrants and
1. Identify, enumerate, classify and define the fundamental standards,
Convertible Bonds
concepts, principles and theories related to compound financial
Recognition Principles
instruments.
Initial and Subsequent Measurement
2.
Apply the principles of the Philippine Financial Reporting Standards
Payment Before and At Maturity
in the recognition, measurement and derecognition of compound
Disclosures
financial instruments.
3. Solve problems involving compound financial instruments.
4. Prepare journal entries involving compound financial instruments.
Derivatives (6 hours)
Definition of Terms
1. Identify, enumerate, classify and define the fundamental standards,
Recognition Principles
concepts, principles and theories related to derivatives.
Initial and Subsequent Measurement
2.
Apply the principles of the Philippine Financial Reporting Standards
Hedging Instrument and Hedged Item
in the recognition, classification, measure-ment and derecognition of
Cash Flow Hedge
deriva-tives.
Fair Value Hedge

Interest Rate Swap

Forward Contract
Futures Contract
Call and Put Options
Embedded Derivatives
Derecognition
Disclosures

Fund and Other Investments (3 hours)

Definition of Terms
Accounting for Sinking Fund
Accounting for Preference Share Redemption Fund
Accounting for Fund for Property Acquisition
Accounting for Contingency Fund
Accounting for Insurance Fund
Cash Surrender Value

3. Solve problems involving derivatives.

4. Prepare journal entries involving derivatives.

1. Identify, enumerate, classify and define the fundamental standards,

concepts, principles and theories related to the different fund
investments.
2. Apply the principles of the Philippine Financial Reporting Standards
in the recognition, classification, measure-ment and derecognition of
the different fund investments.
3. Solve problems involving the different fund investments.
4. Prepare journal entries involving the different fund investments.

Financial Statement Construction and Appreciation (3 hours)

Comprehensive Summary
Statement of Financial Position Asset, Liability and Equity Side of 1. Prepare a statement of financial position in accordance with the
applicable PFRS studied during the course.
Financial Instruments
2.
Prepare an income statement in accordance with the applicable PFRS
Income Statement
studied during the course.
Statement of Changes in Shareholders Equity
3.
Prepare a statement of changes in shareholders equity in accordance
Notes to Financial Statements
with PFRS.
Other Contemporary Topics
4. Prepare the necessary notes to financial statements, including account
analyses and disclosure requirements.
5. Reflect on the application and developments of Philippine financial
statements in light of PFRS.