MANAC, 2013

GMP 2013-15

Course Outline
MANAGEMENT ACCOUNTING

For GMP, 2013-15

Course Instructor: Prof. Santosh Sangem

Contact Details: Office- No.18, Second Floor, Library Block. Office Ext. 3118; Email: santoshsangem@xlri.ac.in Appointment Timings: Monday-Saturday, 11 AM-1PM Course Rationale & Objectives: This course covers the basic concepts from two fields in accountancy, namely, financial accounting and management accounting. A commonly held notion is that accounting is an activity designed to satisfy regulatory agencies, lenders, and the tax collectors and more often that not impede management from focusing on broader organizational goals. As we shall see in the course, such notions are incorrect and that accounting provides management with the least subjective information pertaining to the business. The language of accounting and the underlying principles thereof have evolved over centuries with the precise aims of communicating information to all stakeholders and providing objective information for managerial decision making. Financial Accounting is largely concerned with the communication of information to external entities; and in an environment where there is separation of ownership and control, to owners as well. On the other hand, Management Accounting emphasizes the generation of information for decision making by the internal management and the design of control and incentive systems to enable the attainment of organizational objectives. Pedagogical Methods: The subject of accounting is essentially an application oriented discipline and the most effective approach to developing the required application, interpretative, and assessment skills would be to work through the numbers on the variety of examples provided in the text books on your own over and above those covered in the classes. It is expected that students practice on their own problems and examples over and above those covered during the sessions. Considering the nature of the course and the requirement to work through numerical computations and the underlying principles and rationales for the same, the primary pedagogical tools are lectures, case studies, mini-cases, and examples. Active participation by students is an important feature of the course.

Study Material Primary Text Book:

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GMP 2013-15

Accounting:Text and Cases by Robert Anthony, David Hawkins, and Kenneth Merchant (AHM) The text book will be provided by the first week of the course. Secondary Reference Material Additional reading material will be provided in the form of short handouts for individual topics and some materials/examples uploaded as and when required. Should some students feel that they are interested in exploring additional reading material for a particular topic of their interest, they can get in touch with me. Other Course Policies: Students are expected to have their own calculators during the class/examinations. Plagiarism, Cheating and Other Unfair Practices Students are requested to go through

the students manual regarding the rules and regulations related to cases of copying and similar acts. Cheating in examinations, quizzes or assignments will be dealt with severely. Depending upon the gravity of plagiarism/ cheating/unfair practices, the penalty may range from a zero in that particular component of evaluation or the awarding of an F grade for the course. Please note that aiding and abetting your batchmates in such activities will also be awarded the same penalties. NO subsequent justifications/arguments will be entertained by me.
System of Evaluation Method of Evaluation End-Term Quizzes (10 Marks each, Best 4 out of 5) Group Assignments Marks 40 40 20

Quizzes will typically be evaluated on a binary basis, with full marks for correct answers and zero marks for incorrect ones. The Mid-term and End-term exams will typically have minicases/problems followed by specific questions to be answered. The end-term exam will be comprehensive based on all the material covered in the course. The dates of the quizzes and midterm will be announced once the sessions begin. Grading Pattern A minimum score of 30 marks out of 100 is required to avoid getting a failing grade (F). The rest of the grades will be awarded following the institutes norms of a relative grading system with not more than 30% of enrolled students in A+ & A grade categories combined and not more than 15% of enrolled students in D+, D and F grade categories combined.

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MANAC, 2013
Topics to be covered (Tentative)

GMP 2013-15

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MANAC, 2013
Module 1-Prep 2-Prep Session P1-P2 P3-P6 Learning Objectives Part A: Financial Accounting Introduction to Accounting & Financial Statements Mechanics & Principles of Recording Financial transactions - Basic Accounting Concepts (Entity, Historical Cost, Matching, Objectivity, Accounting Period, Prudence, Materiality, Fair Value, Going Concern, Accrual) - Introduction to the Dual Entry System - Debit & Credit The Vocabulary of Financial Accounting - Recording transactions in the first period of operations - Recording transactions from second period onwards - Preparation of Trial Balance Recognition of Revenue - General Principles of Revenue Recognition - Revenue Recognition for Manufacturing & Merchandize Operations - Revenue Recognition for Long-Term Contracts & Services Accounting Principles for Assets - Accounts Receivable The various types - Dealing with Discounts Trade Discounts & Cash Discounts - Bad & Unrecoverable Debts - Reporting & Valuation of Inventory - Fixed Assets Tangibles & Intangibles - Depreciation, Amortization & Revaluation of Fixed Assets - An Introduction to Measurement of Asset Impairment - An Introduction to Accounting for Financial Instruments Accounting Principles for Liabilities - Types of Long Term Debt - Select Issues in Accounting for Long-Term Debt - Accounting for Current Liabilities - Provisions & Contingent Liabilities Preparation of Balance Sheet and Profit & Loss Accounts - The Trial Balance - Revised Schedule VI form of presenting financial statements - Calculation of Earnings per Share & Diluted Earnings per Share Cash is King An Introduction to Cash Flow Statements - Profits Cash - The concept of cash & cash equivalents An Introduction to Consolidated Financial Statements - Holding/Parent Company & Subsidiaries - The Concept of Minority Interest - Goodwill in Consolidated Financial Statements

GMP 2013-15
Study Material Chapters 1,14 (AHM), Class Notes Chapter 4 (AHM), Class Notes

1-2

Chapter 5 (AHM), Class Notes

3-5

Chapters 6,7 (AHM) , Class Notes

Chapters 8,9 (AHM) , Class Notes Chapters 2,3 (AHM), Class Notes

7-8

5 6

9 10

Chapter 11 (AHM) , Class Notes Chapter 12(AHM) Class Notes

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MANAC, 2013
Module 7 Session 11-13 Learning Objectives

GMP 2013-15
Study Material Chapter 13 (AHM), Class Notes

14-15

16-17

10

17-18

11

19-20

12 13

21 23-24

14

25-26

Analysis of Financial Statements A Case Based Approach - Key Financial Ratios - Du-Pont Analysis - Analysis of a Manufacturing Business - Analysis of a Service Business Forecasting Financial Statements Class Notes - The Percentage of Sales Method - Using Financial Relationships to Forecast Financial Statements Part B: Management Accounting & Control Systems Introduction & Basic Cost Concepts Chapters 15,16 - Why Management Accounting? (AHM), Class - Comparison with Financial Accounting Notes - The goals of cost management Planning & Control - The Concepts of Cost Structure & Cost Unit - Understanding alternative cost classifications - Breaking down semi-variable costs - What are overheads? - Common Bases for overhead allocation - Under-Applied & Over-Applied Overheads Absorption Costing & the use of Cost Sheets Chapter 17,18 - A brief introduction to pricing approaches (AHM), Class - Preparation of cost sheets Notes - Ascertaining the cost of inventories under absorption costing - Shortcomings of Absorption Costing Cost Behavior & CVPAnalysis Chapter 26 - Variable Costs and Contribution (AHM), Class - Break-Even Analysis, Sensitivity Analysis Notes - Comparative Analysis of Absorption Costing & CVP Analysis - Operating Leverage and the choice of Cost Structure - Application to select short-term decisions Relevant Costs & Decision Making Chapter 26 - Important cost concepts for decision making (AHM), Class - Application to select long-term decisions Notes An Introduction to Standard Cost Analysis & Variance Chapters Analysis 19,20,21 (AHM), - Role of Standard Costs Class Notes - Computation of Volume & Price Variances - Variance Analysis and the Control Process - Activity Based Costing vs Standard Cost Analysis Budgeting & Profit Planning Chapters - Responsibility Centers and Management Control 22,23,24 (AHM), - Role of Budgeting in Activity & Profit Planning Class Notes - Profit Planning & the Preparation of Static Master Budgets - The Flexible Budget Approach to Profit Planning - Zero Based Budgeting & Rolling Forecasts as alternative approaches to Budgeting

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GMP 2013-15

Please note that the above sequence is tentative (and could be altered based on initial class experience). Quiz & Mid-Term Schedule Date
2nd July 2013 11th July 2013 30th July 2013 23rd Aug 2013 3rd Sept 2013

Time
5:00 p.m. 5:30 p.m. 5:00 p.m. 5:30 p.m. 5:00 p.m. 5:30 p.m. 5:00 p.m. 5:30 p.m. 5:00 p.m. 5:30 p.m.

Exam
Quiz 1 (10 Marks) Quiz 2 (10 Marks) Quiz 3 (10 Marks) Quiz 4 (10 Marks) Quiz 5 (10 Marks)

Syllabus (Topics covered during)

10th June 2013 - 24th June 2013 26th July 2013 8th July 2013 10th July 2013 24th July 2013 26th July 2013 21st Aug 2013 23rd Aug 2013 2nd Sept 2013

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