IAF710 - Advanced Financial Accounting

Subject Title
Advanced Financial Accounting

Subject Description
This advanced financial accounting course provides an in-depth study of six major areas of advanced financial accounting. These are standard setting in Canada and internationally, financial instruments, income tax allocation, long-term intercorporate investments, consolidation, foreign currency translation and consolidation of foreign subsidiaries, and not-for-profit and public sector accounting.

Credit Status
One Degree -  Level Credit

Learning Outcomes
Upon successful completion of this subject the student will be able to:

Canadian and International Accounting Environment

1. Research the Canadian and international accounting environments and the latest developments in the Canadian accounting environment.
2. Document and explain the major differences between Canadian and International GAAP.
3. Critically evaluate the appropriateness of GAAP and financial statement concepts in specific situations.
4. Prepare financial statements by applying GAAP and financial statement concepts.
5. Evaluate and advise on the appropriateness of differential reporting standards for given circumstances and prepare financial statements by applying differential reporting standards.

Financial Instruments

1. Formulate, analyze and process transactions relating to financial instruments, including the initial recognition, reclassification and subsequent measurement and derecognition.
2. Prepare financial statements which correctly disclose financial instrument transactions.

Accounting for Income Tax

1. Formulate, analyze and process transactions relating to income tax.
2. Prepare financial statements which correctly disclose income tax transactions and obligations.

Business Combinations and Intercorporate Investments

1. Evaluate different intercorporate investments and advise on the appropriate accounting treatment for investments that constitute temporary investments, investments held-for-trade, investments available-for-sale, significant influence and control.
2. Formulate, analyze and process different intercorporate investments, using both the equity and cost methods as appropriate.
3. Calculate goodwill and allocate the purchase discrepancy stemming from business combinations.
4. Prepare consolidated financial statements for both 100% owned subsidiaries and less than 100% ownership, utilizing both the working paper and the direct approaches.
5. Prepare consolidated financial statements for both 100% owned subsidiaries and less than 100% ownership, applying both the cost and equity methods.

Consolidation Subsequent to Acquisition

1. Advise on the appropriate accounting treatment for goodwill and other intangible assets during consolidation.
2. Account for the purchase discrepancy more than one year after acquisition.
3. Prepare consolidated financial statements one year after acquisition.
4. Prepare consolidated financial statements in subsequent years.

Intercompany Transactions

1. Process intercompany receivable and payable transactions.
2. Formulate, analyze and process intercompany revenue and expense transactions, both "upstream" and "downstream".
3. Formulate, analyze and process intercompany inventory transactions.
4. Account for realized and unrealized intercompany profit on inventory sales.
5. Formulate, analyze and process intercompany land transactions
6. Formulate, analyze and process intercompany amortizable capital asset transactions.
7. Account for realized and unrealized intercompany profit on sale of land and amortizable capital assets.
8. Convert cost recording to equity recording.
9. Prepare consolidated financial statements where unrealized intercompany profits are involved.

Preferred Shares

1. Calculate non-controlling interest when the subsidiary has preferred shares in its capital structure.
2. Prepare consolidated financial statements where the subsidiary has preferred shares in its capital structure.

Issues in Ownership

1. Formulate, analyze and process transactions which constitute increase in ownership.
2. Evaluate the impact of, and advise on the appropriate accounting treatment of, step purchases on parent's investment account.
3. Formulate, analyze and process share purchase transactions that lead to a change in level of ownership.
4. Evaluate the impact of, and advise on the appropriate accounting treatment of, sale of shares by the parent that leads to decrease in ownership interest.
5. Account for subsidiary share issues in which the parent is not participating.
6. Evaluate the impact, and advise on the appropriate accounting treatment, where the subsidiary has preferred shares.
7. Formulate, analyze and process transactions where the parent has indirect shareholding and prepare appropriate consolidated financial statements.

Joint Ventures

1. Research, evaluate and advise on the appropriate accounting treatment for joint venture transactions.
2. Formulate, analyze and process intercompany transactions between joint venturers.
3. Account for joint ventures formed through non-cash asset combinations.
4. Prepare financial statements for joint venture projects.

Foreign Currency Translation

1. Research, evaluate and advise on the appropriate accounting treatment for foreign currency transactions.
2. Formulate, analyze and process foreign currency transactions for monetary and non-monetary transactions.
3. Formulate, analyze and process fair-value hedge transactions.
4. Formulate, analyze and process cash-flow hedge transactions.

Translation and Consolidation of Foreign Subsidiaries.

1. Distinguish between integrated versus self-sustained foreign operations and advise on the appropriate accounting treatment in each case.
2. Translate and consolidate foreign operations.
3. Translate and consolidate foreign operations where purchase discrepancy is involved.
4. Evaluate the impact of, and advise on the appropriate accounting treatment of, hedging a net investment in a self-sustained foreign subsidiary.
5. Research, evaluate and advise on the appropriate accounting treatment of foreign currency translations and consolidation.
6. Prepare financial statements appropriate for integrated and self-sustained foreign subsidiaries.

Segment Disclosure

1. Apply the quantitative thresholds to determine reportable segments.
2. Interpret and advise on the organization's reporting obligations as far as segment reporting is concerned.

Financial Reporting for Not-for-Profit and Public Sectors

1. Research, evaluate and advise on not-for-profit accounting and reporting issues.
2. Formulate, analyze and process accounting transactions using the deferral method
3. Formulate, analyze and process accounting transactions using the restricted fund method.
4. Research, evaluate and advise on GAAP issues for public sector organizations
5. Research, evaluate and advise on financial reporting for government.
6. Apply budgetary control and encumbrance accounting methods in a not-for-profit environment.
7. Research and discuss ethical considerations for not-for-profit organizations

Essential Employability Skills

    •  Communicate clearly, concisely and correctly in the written, spoken and visual form that fulfils the purpose and meets the needs of the audience.

    •  Respond to written, spoken, or visual messages in a manner that ensures effective communication.

    •  Execute mathematical operations accurately.

    •  Apply a systematic approach to solve problems.

    •  Use a variety of thinking skills to anticipate and solve problems.

    •  Locate, select, organize, and document information using appropriate technology and information systems.

    •  Analyze, evaluate, and apply relevant information from a variety of sources.

    •  Show respect for diverse opinions, values, belief systems, and contributions of others.

    •  Interact with others in groups or teams in ways that contribute to effective working relationships and the achievement of goals.

    •  Manage the use of time and other resources to complete projects.

    •  Take responsibility for one's own actions, decisions, and consequences.

Academic Integrity
Seneca upholds a learning community that values academic integrity, honesty, fairness, trust, respect, responsibility and courage. These values enhance Seneca's commitment to deliver high-quality education and teaching excellence, while supporting a positive learning environment. Ensure that you are aware of Seneca's Academic Integrity Policy which can be found at: http://www.senecapolytechnic.ca/about/policies/academic-integrity-policy.html Review section 2 of the policy for details regarding approaches to supporting integrity. Section 2.3 and Appendix B of the policy describe various sanctions that can be applied, if there is suspected academic misconduct (e.g., contract cheating, cheating, falsification, impersonation or plagiarism).

Please visit the Academic Integrity website http://open2.senecac.on.ca/sites/academic-integrity/for-students to understand and learn more about how to prepare and submit work so that it supports academic integrity, and to avoid academic misconduct.

Discrimination/Harassment
All students and employees have the right to study and work in an environment that is free from discrimination and/or harassment. Language or activities that defeat this objective violate the College Policy on Discrimination/Harassment and shall not be tolerated. Information and assistance are available from the Student Conduct Office at student.conduct@senecapolytechnic.ca.

Accommodation for Students with Disabilities
The College will provide reasonable accommodation to students with disabilities in order to promote academic success. If you require accommodation, contact the Counselling and Accessibility Services Office at ext. 22900 to initiate the process for documenting, assessing and implementing your individual accommodation needs.

Camera Use and Recordings - Synchronous (Live) Classes
Synchronous (live) classes may be delivered in person, in a Flexible Learning space, or online through a Seneca web conferencing platform such as MS Teams or Zoom. Flexible Learning spaces are equipped with cameras, microphones, monitors and speakers that capture and stream instructor and student interactions, providing an in-person experience for students choosing to study online.

Students joining a live class online may be required to have a working camera in order to participate, or for certain activities (e.g. group work, assessments), and high-speed broadband access (e.g. Cable, DSL) is highly recommended. In the event students encounter circumstances that impact their ability to join the platform with their camera on, they should reach out to the professor to discuss. Live classes may be recorded and made available to students to support access to course content and promote student learning and success.

By attending live classes, students are consenting to the collection and use of their personal information for the purposes of administering the class and associated coursework. To learn more about Seneca's privacy practices, visit Privacy Notice.