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Indian School of Business

Financial Accounting in Decision Making (FADM)


Term One: 2016 (Mohali Campus)
Instructor: Partha Mohanram (Sessions 1 5)
Affiliation: University of Toronto

Class Sessions: Mondays & Wednesdays


or Tuesdays & Thursdays

Email: ISB id:


Home School id: Partha.Mohanram@Rotman.Utoronto.Ca

Office Hours: TBD

Instructor: Mark Finn (Sessions 6 10)

Class Sessions: Mondays & Wednesdays


or Tuesdays & Thursdays

Affiliation: Northwestern University


Office Hours: TBD

Email: ISB id:


Home School id: m-finn@kellogg.northwestern.edu
Required Materials:

Horngren, Sundem, Elliott, and Philbrick. Introduction to Financial Accounting. 9th Edition. Prentice
Hall, 2006.
Course pack All material for this course will be provided electronically. This includes daily case
questions, handouts, and financial reports for many corporations.
Preparation for class INCLUDING DAY 1
Given the fast pace of the curriculum, we advise you to take the following three steps ahead of each class:
1. Read the textbook chapter(s) as listed on the daily schedule. Reading technical material is not like
reading a novel or the newspaper. You must read carefully and take notes as you read. Plan on
spending one to two hours per chapter.
2. Attempt to solve some of the suggested end-of-chapter problems (see table on page 5, below).
Doing so will help you identify material you did not comprehend. Solutions to all of these
problems are posted on the On-line Learning Management System (LMS).
3. Attempt to answer all of the case questions for the day on your own. Then work with your group
or with other students. Compare answers see where you erred. These questions relate to the
financial statements of specific companies. You have the financial statements for these companies
and will use these reports to answer the questions. From this you will learn real-world
applications of the principles of Accounting.
For many of you, this will be the first time you are encountering financial reporting. You will need to
spend additional time in order to succeed in FADM. Doing the pre-class work described above, will help
you get the most out of each class.

Grading:
There are five components to the class grade:
Component

Weight

Two quizzes*
Mid-term examination
End-term examination
Group project
Class Participation

10%
25%
30%
30%
5%

Coding
Scheme
2N-b

2N-b
4N

*The quizzes provide additional practice and assist in preparation for the final exam. While this
component is rated coding scheme #1, students who attempt this work individually learn more and are
better prepared for the mid-term and end-term examinations.
Chartered Accountants have the option of completing course requirements through a small group research
project on a topic approved by the accounting faculty. Decision must be communicated to the professor
before the start of Session #3. For details, please visit the professor during regular office hours.
NB: If you do not choose the small group project option, you MUST attend all classes and take all
examinations.
NB: This option is NOT available to students who hold other professional business designations such as
CFA, CMA, CGA or members of the ICSI, etc. Please do not ask for exceptions.
Course Description:
This class will provide students with an introduction to financial statements and their use. The course centers
on real financial statements. Each class session will provide a detailed examination of the major components of
the companies income statements, balance sheets, and statements of cash flows. We will examine performance,
liquid assets, inventories, fixed assets, intangible assets, long-term obligations, investments, equity, and cash
flows. Upon completion, students should have developed a basic understanding of what financial statements
contain and how to use them to assess a companys profitability and financial position.
The course will foster managerial thinking and hone decision-making skills by focusing on the following
key aspects:
Awareness of Global Issues Affecting Business
The course materials will identify and analyze key global factors relevant to financial reporting.
Real-world financial statements prepared by multinational firms will be used to demonstrate how
financial reporting varies across jurisdictions. This facilitates a better understanding of the Indian and
global business environments.
In the final project requirement students compare U.S. and international accounting principles and
understand the primary differences and their impact on financial reports.
Critical and Integrative Thinking
Financial analysis of corporate performance and position will begin with identification of key integral
relationships among financial statements and reported items.
Class discussion will draw on students personal business experience. This will provide depth not
available from assigned (textbook) materials.
2

Comparison of U.S, Indian and international accounting standards (IFRS) will compel students to
form opinions and explain their position to others.
Financial analysis will require students to clearly define their information needs and gather
appropriate evidence.
Critical thinking is evaluated across all components of the grade, i.e., class participation, quizzes,
midterm exam, final exam, and the final project.

Ethical Responsibility
Real world financial reporting outcomes provide current examples of ethical accounting issues.
Several high-profile corporate frauds (e.g., Enron, Satyam) will be discussed.
Students will systematically evaluate pros and cons of alternative financial reporting choices and
discuss how various players (e.g., auditors, regulators) respond to the reporting incentives and
outcomes.
Class lectures will explain earnings management and how managerial intervention in the reporting
process can lead to corporate malfeasance.
Interpersonal Awareness and Working in Teams
Final project requires students work in teams.
Project requires higher-order thinking skills, which should encourage team members to plan, delegate,
communicate, and efficiently execute final report.
Members will individually and collectively ensure that group tasks are successfully accomplished.
Group will receive a common grade, which will garner buy-in and support from all team members.
Classroom Etiquette

Attendance is mandatory and so is punctuality


- Be on time come early enough to get your materials ready for on-time start
- NB: If you are late, you receive a 0 for class participation for the day.
- If you know in advance you will be late, send an email to your professor; this is a matter of
professional courtesy.
- If you are late due to exigent circumstances, discreetly take your seat.
- Repeated late arrival will result in additional penalty.
- We give adequate break time So return to class on time
Laptop policy
o Given the green electronic handout initiative, students will be allowed to bring laptops to
class provided they are used exclusively for classroom related activity.
Class participation
- Quality is more important than quantity
- Listening is an important part of communication
- Your comments must address the question OR build on others comments
- Please raise your hand if you would like to be called upon.

The ISBs Mandatory Attendance Policy:


Learning is an interactive process. ISB students are admitted partly based on the experiences they bring to
the learning community and what they can add to class discussions. Therefore attendance is an important
aspect of studying here. You have to be present in all the classes. Absence is only appropriate in cases of
extreme personal illness, injury, or close family bereavement. Voluntary activities such as job interviews,
business school competitions, travel plans, joyous family occasions, etc. are never valid reasons for
missing any class. The Academic Associate will keep track of attendance on a regular basis and is shared
with the students on a weekly basis.
If a student misses more than two sessions, there will be a reduction in the overall course grade. For
instance, if a student misses three sessions in any course, s/he will obtain a letter grade lower than that
awarded by the faculty for that course. With four sessions missed, the student will receive a letter grade
that is two levels lower, and if a student misses five sessions or more, the student will receive an 'F' grade
for that course. However, the concerned faculty is free to remove even the relaxation of two sessions and
make the entire ten sessions mandatory for attendance purposes. Such exceptional situations are always
communicated by the faculty.
If a student does not meet the minimum attendance requirement for health reasons or for grave personal
exigencies, the student may receive an adjusted grade for the course depending on the number of sessions
missed. This will be based on submission of necessary documentary evidence. Any deviations will be
referred to the Academic Committee for a final decision.
Late arrival is disruptive to the learning environment; so you have to be in class before the scheduled
time. Most courses meet twice a week during the day. Normally there are no classes scheduled on Friday
or in the evenings, but there are exceptions. Class and Exam schedules are posted on the On-line Learning
Management System (LMS). Any change in the class schedule will be announced in advance.
Assignment Schedule
Name of
Component
Quiz #1

Mid-term
Examination
Quiz #2

Date

Week 2

Format

LMS

Group
Assignment
No

Week 4

Inclassrooms
LMS

Group
Project

Week 5

Take-home

Yes

End-term
Examination

Week 6

Inclassrooms

No

Week 3

No
No

Additional Instructions
Quiz will be uploaded and
available by Friday 17:00 (5pm)
Quiz must be completed by
Sunday 17:00 (5pm)
Location will be announced
Closed book exam
Same as for Quiz #1
Hardcopy due Friday 17:00
(5pm) to AA mailbox
8-page limit, excluding exhibits
and appendices
Instructions as to exam location
will be forthcoming
Open book exam

Topical Course Schedule:

Session
1
2

Textbook Readings

Suggested
Practice Problems

Chapter 1

1-27, 1-33, 1-38,


1-42

statement Chapter 2
Chapter 4

2-32, 2-52, 4-22,


4-25, 4-31, 4-35

Subject
Introduction
to
reporting
Balance sheet
General
income
Accrual accounting

financial

Statement of cash flows

Chapter 5

Accounts receivable & Inventory

Chapter 6 & 7

Long term tangible assets (PPE)

Chapter 8

5-40, 5-45, 5-52,


5-59
6-35,6-48, 6-51,
6-58, 6-60, 7-32,
7-80, 7-85
8-29, 8-32, 8-38,
8-48

Fair value accounting

Chapter 8
Begin Ch. 11

8-49, 8-53, 8-67


11-27,
11-28,
11-31,
11-32,
11-53

Majority investments

Finish Ch. 11

11-43, 11-44, 11-46,


11-48

Liabilities: Bonds and Remediation


Obligations

Begin Ch. 9

9-41, 9-42, 9-43, 961

Liabilities: Leases, Deferred Taxes

Finish Ch. 9

9-37, 9-65, 9-66, 966, 9-68, 9-70, 9-71

10

Contingent Liabilities
Shareholders Equity

Chapter 10 (skim)

10-67, 10-56, 10-72

Intangibles

Course Name
Professor Name
Academic Associate(s):

Grading Components
Two quizzes
Group project
Mid-Term Examination
End-Term Examination
CP

Evaluation and Grading Policy


Financial Accounting in Decision Making
__________________________________________________
RLN Murthy, Ajay Mittal
Marks will be released within __ days of
submission (Please Tick)

Soft Copy Submissions


(Please Tick)

3x___
5___
3___
5___ 7x_____
As per paper viewing schedule
As per paper viewing schedule
After L5 and L10 ____
Only after L10
__x__

Y _______ N_________
Y _______ N_________

*All changes to course outline/submission deadlines/class schedule/grading to be posted on LMS.


*We request that all marks are revealed by first Wednesday of the next term.
*All grading timelines to be communicated to the students by end of Lecture 1.
*All components (except CP) revaluation policies will be similar to end term exam revaluation

policies.
*AA can inform ASA about any extra venue requirement 1 working day in advance