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University of Notre Dame

Department of Accountancy
ACCT 30100 Spring 2014
Corporate Financial Reporting

I. Professor and Office Hours

Instructor: Chao-Shin Liu
Professor's Office Location: 387 Mendoza College of Business
Professor's Office Hours: TuTh 11:00 12:15 and by Appointment
Professor's Phone #: 574-631-6029
Professor's E-mail Address: cliu@nd.edu

II. Required Course Materials:

Text: Financial Reporting & Analysis, 5
th
ed., Revsine et al (McGraw-Hill), 2012
(http://www.mhhe.com/revsine5e)

III. III. Course Goals and Objectives

To understand the role financial reporting plays in providing decision useful information
for internal managers and external decision makers.

To understand the economics underlying the business transactions studied.

To learn the Generally Accepted Accounting Principles (GAAP) that set the reporting
and disclosure requirements for these transactions.

To evaluate the efficacy of GAAP (i.e., do the principles capture the economics of the
transaction and if not, why).

To gain an appreciation of the motivations that lead managers to select one accounting
principle over another (e.g., contracting arrangements between managers and owners or
between companies and creditors may play a significant role in explaining accounting
method choice).

To gain an understanding of how external decision makers use financial statement data
to make investment and credit decisions (e.g., investigate why accounting earnings per
share is considered valuation relevant information for security pricing).

To help students prepare the CFA exams.

IV. IV. Grading

Your grade will be determined based on your total score on the following items:
Attendance 20
Cases (20 points* 2) 40
Unannounced Quizzes (30 points*2) 60
Exam 1 125
Exam 2 125
370 points
No late assignment will be accepted and no extra credit will be assigned.
Make-up exams/quizzes will only be given with university approved excuses and
with appropriate document from the Mendoza College of Business.
Students who miss 3 or more classes or take my 30100 course for the second
time will receive zero attendance point; students are not allowed to leave the
classroom in the middle of the class.
Students with less than 222 total points (60%) will receive an F grade.

V. Course Organization & Administration

Attendance and Participation: The active student involvement is required. In order to
participate, you will have to be prepared. It is virtually impossible to do well in this class
without devoting a considerable amount of time to solving homework assignments.
Regular attendance and active participation is expected for at least three reasons. First,
exams will include material not covered in the text; therefore it will be difficult to do well
on the exams without regular attendance. Second, a richer classroom environment exists
when each student has prepared prior to class and comes to class ready to discuss the
assigned materials in greater detail. Third, class participation helps students develop the
ability to formulate and respond to questions in the presence of peers. While attendance
is necessary in order to receive credit for class participation, it is not sufficient. The
discussion portion of the participation grade requires that you ask meaningful questions
and provide substantive solutions and comments.

Homework Assignments: The objectives of the homework assignments are to enhance
learning, stimulate class discussion, and aid in exam preparation. Students are expected
to be prepared to respond to homework-related questions during class discussions.

Exams: Two exams are scheduled during the semester. The second exam (and its make-up
exam) will take place according to the universitys Final Exam Schedule.

VI. Code of Honor

Students will not give or receive aid on exams. This includes, but is not limited to,
viewing the exams of others, sharing answers with others, and using books or notes while
taking the exam. It also includes discussing the exam in order to help those who are
taking it later.

For case assignments, students must work completely independently of other individuals.
Copying solutions from other students constitutes plagiarism.

Students are expected to avoid plagiarism. See The Mendoza College of Business
Honor Code (available in the Dean=s Office) for actions that constitute plagiarism.

The honor code requires that a student, with knowledge of the above violations,
report such occurrences. If a perceived honor code violation occurs, the procedures
outlined in The Mendoza College of Business Honor Code will be followed.

************
To the extent possible, I will follow the schedule of assignments in this syllabus. The
schedule may be altered (add, delete, change timing, etc.) in order to enhance
student learning opportunities or for other reasons.

Date

Topic

Textbook Reading

Assignments

Cases & Readings
Session 1
T, 1-14
Introductions - Instructor, course structure
Distribute & Discuss Syllabus




CFA Gains Momentum at B-Schools
Officials Say They Sought To Avoid Bear Bailout
Session 2
Th, 1-16
Institutional Setting for Financial Reporting

C1: 10-37
P1-11, P1-14, C1-5
WorldCom Internal Probe Uncovers Massive Fraud
U.S. Nears Accounting Shift
Session 3
T, 1-21
Accrual Accounting and Income
Determination

C2: 57-71
E2-2, P2-7


Session 4
Th, 1-23
Accrual Accounting and Income
Determination (continued)

C2: 71-89
P2-11, P2-13
For Annual-Report Purposes, Hurricane Katrina Is 'Ordinary'
FASB Finalizes Guidance on Presentation of
Comprehensive Income
Session 5
T, 1-28
Additional Topics in Income Determination

C3: 131-168
E3-2, E3-14, P3-7 SolvGen Inc. Case (Assignment #1, Due 2-4)
Session 6
Th, 1-30
Balance Sheet and Statement of Cash Flows

C4: 193-208

P4-6, C4-1
Tech Titans in Bidding War
Session 7
T, 2-4
SolvGen Inc. Case Due
Financial Statement Analysis

C5: 249-276
E5-6, P5-4, P5-9

Session 8
Th, 2-6
Financial Statement Analysis (continued)
Valuation and Credit Risk Assessment

C5: 276-284
C6: 313-317
C5-2 The Decline of the P/E Ratio
Session 9
T, 2-11
Valuation and Credit Risk Assessment
(continued)

C6: 317-336
P6-3, P6-9, C6-3
Back to Basics: How To Spot Growth
Session 10
Th, 2-13
Financial Information in Contracting

C7: 375-399
P7-4, C7-1
GM Races to Correct Errors for Report to SEC
Snack CEO Ousted in Accounting Inquiry
Session 11
T, 2-18
Receivables

C8: 425-440
E8-2, E8-3, P8-4, C8-1
Deloitte Receives $1 Million Fine
Session 12
Th, 2-20
Receivables (continued)

C8: 441-459
P8-15, P8-17 Lehman Repo 105
Session 13
T, 2-25
Inventories

C9: 477-496
P9-1, P9-11
Rush to Defend Tax Rule on Inventory and Profits
Session 14
Th, 2-27
Inventories (continued)
Review for Exam 1

C9: 496-519
E9-12, C9-3
Session 15
T, 3-4
Exam 1

C1-C9




Session 16
Th, 3-6
Long-Lived Assets and Depreciation

C10: 551-567
P10-1, E10-13
WorldCom Case (see related articles from session 2)
*****SPRING BREAK*****
Session 17
T, 3-18
Long-Lived Assets and Depreciation
(continued)

C10: 567-582,586-
591
P10-8, P10-9
Ciena Swings to Loss on Write-off
Strike Three: Is Ciena Out?
Session 18
Th, 3-20
Financial Instruments as Liabilities

C11: 611-635
P11-2, P11-3, P11-12
Cash-Rich Microsoft Sells Its First Bonds
Apple's Record Plunge Into Debt Pool
Session 19
T, 3-25
Financial Instruments as Liabilities
(continued)

C11:637-664
P11-5, P11-18, C11-4
Coke Long-term Debt Case
Session 20
Th, 3-27
Leases

C12:693-712, 726-
729
P12-1, C12-1
Accounting Change Could Boost Companies' Debt
Session 21
T, 4-1
Income Taxes

C13:749-763, 778-
791
P13-2, P13-5
Many companies pay no income taxes
Apple Tax Bill Overstated to Investors
Merck Income Tax Case
Session 22
Th, 4-3
Pensions and OPEB

C14:821-832, 838-
850
E14-7, E14-14
AMR Does About-Face
IASB Issues Amendments to IAS 19
Session 23
T, 4-8
Pensions and OPEB (continued)

C14: 852-866
E14-16
PepsiCo Pensions-OPEB Case
Rewriting Pension History
GM Acts to Pare Pension Liability
Pension Assumptions and Manipulations
Session 24
Th, 4-10
Equity

C15: 889-911
P15-1, P15-3, P15-6
Citigroup Instantly Becomes a $40 Stock
Microsoft Equity Case (Assignment #2, Due 4-22)
Session 25
T, 4-15
Equity (continued)

C15: 911-930
P15-14
Facebook Compensation
Session 26
Th, 4-17
Investments

C16: 949-961
P16-1, P16-2
PepsiCo and PepsiAmericas Case
Session 27
T, 4-22
Microsoft Equity Case Due
Statement of Cash Flows

C17: 1025-1053
P17-1 (2)
Justin Inc. Case
Session 28
Th 4-24
Statement of Cash Flows under IFRS

C17: 1053-1058
C17-1
Apple to Pay Dividend, Plans $10 Billion Buyback
Session 29
T 4-29
Review for Exam 2
(Exam Date: ? , 7:30-9:30)