Dr Nalayiram's E-Learning

This course equips the participant to understand the significance of a Cash Flow Statement, what are its Component Sections, How they are prepared, how to analyse it, its Utility in decision making by managers and how useful they are in making investment decisions by existing and prospective investors and how the cash flow statement forms as one of the bases for valuing a business entity.

Course Overview

This Course on Preparation of Operational and Financial Models for Hospitality Industry consists of the following Modules

1. Financial Statements  -Preparation, Analysis and Planning
   
2. MIS Statements in a typical hospitality industry unit
3. Preparation of Budgets
4. Application of Advanced MS Excel and VBA
5. Financial Modelling Concepts and Methodology
   
6. Preparation of Operational and Financial Models
   

The course which spreads into 300 hours involves lectures and / or  self pace learning, recorded lectures, illustration of application of MS Excel and VBA, Assignments, Quizzes,  Project Work and end course assessment.

The course which spreads into 300 hours involves lectures and / or  self pace learning, illustration of application of MS Excel and VBA, Assignments, Quizzes,  Project Work and end course assessment.

Course Overview

Certificate Course in Financial Modelling consists of three modules.

1. Financial statements preparation, financial statements analysis and planning
2. Application of Advanced Excel in Financial statements preparation, financial statements analysis and planning
3. Financial Modelling Methodology
4. Preparation of Financial Models in MS Excel and VBA 

The course which spreads into 100 hours involves lectures and / or  self pace learning, illustration of application of MS Excel and VBA, Assignments, Quizzes,  Project Work and end course assessment.

Syllabus

Objective

To develop an understanding of the basic concepts and principles of Accounting and apply the same in preparing financial statements and simple problem solving.

Contents:

1. Theoretical framework

i. Meaning and Scope of accounting

ii. Accounting Concepts, Principles and Conventions

iii. Accounting terminology - Glossary

iv. Capital and revenue expenditure, Capital and revenue receipts, Contingent assets and contingent liabilities

v. Accounting policies

vi. Accounting as a Measurement Discipline - Valuation Principles, Accounting Estimates

vii. Accounting Standards - Concepts and Objectives

viii. Indian Accounting Standards - Concepts and Objectives

2. Accounting Process

i. Books of Accounts

ii. Preparation of Trial Balance

iii. Rectification of Errors

3. Bank Reconciliation Statement

Introduction, reasons, preparation of bank reconciliation statement.

4. Inventories

Cost of Inventory, Net realizable value, Basis and technique of inventory valuation and record keeping

5. Concept and Accounting of Depreciation

Concepts, Methods of Computation and accounting treatment of depreciation, Change in depreciation methods

6. Accounting for Special transactions

i. Bills of Exchange and promissory notes

Meaning of Bills of Exchange and Promissory Notes and their Accounting Treatment; Accommodation bills

ii. Sale of Goods on approval or return basis

Meaning of goods sent on approval or return basis and accounting treatment

iii. Consignments

Meaning and features of consignment business, differences between sale and consignment, Accounting treatments for consignment transactions and events in the books of consignor and consignee.

iv. Average due date

Meaning, Calculation of average due date in various situations

v. Account current

Meaning of Account Current, Methods of preparing Account Current

7. Final Accounts of Sole Proprietors

Elements of financial statements, closing adjustment entries, trading account, profit and loss account and balance sheet of manufacturing and non-manufacturing entities

8. Partnership Accounts

i. Final Accounts of partnership firms

ii. Admission, Retirement, and Death of a partner including treatment of goodwill.

iii. Introduction to LLPs and distinction of LLPs from partnerships.

9. Financial Statements of Not-for-Profit Organizations

Significance of Receipt and Payment Account, Income and Expenditure Account and Balance Sheet, Differences between Profit and Loss account and Income and expenditure account, Preparation of Receipt and Payment Account, Income and Expenditure Account and Balance Sheet.

10. Introduction to Company Accounts

i. Definition of shares and debentures

ii. Issue of shares and debentures, forfeiture of shares, re-issue of forfeited shares

iii. Statement of profit and loss and balance sheet as per Schedule III to the Companies Act 2013.

This quiz is based on Disclosure of Accounting Policies based on AS 1 of the Intermediate Course - Advanced Accounting

Syllabus

Objective

Contents

1. Financial Management and Financial Analysis

i. Introduction to Financial Management Function

a. Objective and scope of financial management

b. Role and purpose

c. Financial management environment

d. Functions of finance executives in an organization

e. Financial distress and insolvency

ii. Financial Analysis through Ratios

a. Users of the financial analysis

b. Sources of financial data for analysis

c. Calculation and interpretation of ratios:

 -Analysing liquidity

- Analysing leverage

- Analysing solvency

- Analysing efficiency / activity

- Analysing profitability

d. Limitations of ratio analysis

2. Financing Decisions

i. Sources of Finance

 a. Different sources of Finance, Characteristics of different types of long term debt and equity finance, method of raising long term finance

b. Different Sources of short term finance

c. Internal fund as a source of finance

d. International sources of finance

e. Other sources of finance- Sale and lease back, Convertible debt, Venture capital, Grants etc.,

ii. Cost of Capital

a. Significance of cost of capital

b. Factors of cost of capital

c. Measurement of costs of individual components of capital

d. Weighted average cost of capital (WACC)

e. Marginal cost of capital

f. Effective interest rate

iii. Capital Structure Decisions

a. Significance of capital structure

b. Determinants of capital structure

c. Capital structure planning and designing

d. Designing optimum capital structure

e. Theories of Capital Structures and value of the firm - relevancy and irrelevancy of capital structure

f. EBIT-EPS Analysis, Breakeven - EBIT Analysis 

g. Under / Over Capitalisation

iv. Leverages

a. Types of Leverages - Operating, Financial and Combined

b. Analysis of Leverages

3. Capital Investment and Dividend Decisions

i. Capital Investment Decisions

a. Objectives of Capital Investment decisions

b. Methods of Investment appraisal

 -Payback period, Discounted payback period

-Accounting Rate of return (ARR)

- Net Present Value (NPV)- The meaning of NPV, Strengths and limitations of NPV method, The working capital adjustment in NPV Analysis, Capital Rationing, Equivalent Annual Costs

- Internal Rate of Return (IRR) - Limitations of the IRR Method, Multiple IRRs

- Modified Internal Rate of Return (MIRR) - Definition and Exploitation of MIRR, The process for calculating MIRR, Strengths of the MIRR Approach

- Profitability Index

ii. Adjustment of Risk and Uncertainty in Capital Budgeting Decision

a. Probability Analysis

b. Certainty Equivalent Method

c. Risk Adjusted Discount Rate

d. Scenario Analysis

e. Sensitivity Analysis

iii. Dividend Decisions

a. Basics of Dividends

b. Forms of Dividend

c. determinants of Dividend

d. Relevancy and irrelevancy of Dividend policies - Traditional approach, Walter's model, Gordon's Model, Modigliani and Miller Hypothesis

4. Management of Working Capital

a. The management of working capital - Liquidity and Profitability

b. The working capital financing decisions - Primary and Secondary Sources of Liquidity

c. The working capital cycle (operating cycle) Effectiveness of working capital based on its operating and cash conversion cycles

d. Assessment of working capital requirement

e. Management of Accounts receivables

f. Factoring and forfaiting

g. Management of Accounts payables

h. Management of Inventory

i. Management of Cash, Treasury management

j. Banking norms of working capital finance

Objective

1. To develop an understanding of the basic concepts and applications to establish the cost associated with the production of products and provision of services and apply he same to determine prices.

2. To develop an understanding of cost accounting statements

3. To acquire the ability to apply information for cost ascertainment, planning, control and decision making

Contents

1. Overview of Cost and Management Accounting

i. Introduction to Cost and Management Accounting

a. Objectives and scope of Cost and Management Accounting

b. The users of Cost and Management accounting information and Functions of Management Accounting

c. Role of cost accounting department in an organization and its relation with other departments

d. Installation of costing system

e. Relationship of Cost Accounting, Financial Accounting, Management Accounting and Financial Management

f. Cost terms and concepts

g. Cost reduction and cost control

h. Elements of Costs

i. Cost behavior pattern, Separating the components of fixed, variable, semi-variable and step costs.

j. Methods of costing, techniques of costing

k. Cost Accounting with use of Information technology

ii. Elements of Cost and preparation of Cost Sheets

a. Functional classification and ascertainment of costs

b. Preparation of Cost Sheets for Manufacturing sector and for Service sector.

2. Ascertainment of Costs and Cost Accounting System

i. Material Cost

a. Procurement procedures - Store procedures and documentation in respect of receipts and issue of Stock, Stock verification

b. Valuation of material receipts

c. Inventory control

-Techniques of fixing levels of stocks 0 minimum, maximum, re-order point, safety stock, determination of optimum stock levels

- Determination of Optimum Order Quantity- Economic Order Quantity (EOQ)

- Techniques of Inventory Control - ABC Analysis, Fast, Slow moving and non moving (FSN), High, Medium, Low (HML), Vital, Essential, Desirable (VED), Justin[Time (JIT)- Stock taking and perpetual inventory system, use of control ratios.

d. Inventory Accounting

ii. Employee Cost

a. Attendance and payroll procedures

- Elements of wages - basic pay, Dearness Allowance, Overtime, Bonus, Holiday and leave wages, Allowances and perquisites.

b. Employee cost control

c. Employee Turn over- Methods of calculating employee turn over, causes of employee turn over, effects of employee turn over.

d. Utilisation of Human resource, Direct and Indirect Employee cost, Charging of Employee Cost, Identifying employee hours with work orders or batches or capital jobs.

e. Remuneration Systems and incentive schemes

- Premium Bonus Method (Halsey Plan and Rowan Plan)

iii. Overheads

a. Functional analysis - factory, Administration, Selling, Distribution, Research and Development

b. Behavioural analysis - Fixed, Variable and Semi-Variable

c. Allocation and Apportionment of Overheads using Absorption Method

d. Factory  Overheads - Primary and Secondary Distribution

e. Administration Overheads - Method of allocation to cost centres or products

f. Selling & Distribution Overheads - Analysis and absorption of the expenses in products / customers, impact of marketing strategies, cost effectiveness of various methods of sales promotion.

g. Treatment of Research and Development cost in decision making.

iv. Concepts of Activity Based Costing (ABC)

v. Recording and Accounting of Costs

a. Non-integrated Cost Accounting System - Ledger under non-integral system

b. Integrated (Cost and Financial) Accounting System - Ledgers under Integral System

c. Differences between Non-integrated and Integrated Accounting System

d. Reconciliation of profit as per Cost and Financial Accounts (under Non-Integrated Accounting System)

3. Methods of Costing

i. Single Output / Unit Costing

ii. Job Costing

Job cost cards and databases, collecting direct costs of each job, attributing overheads to jobs, Application of Job Costing

iii. Batch Costing

Determination of optimum batch quantity, ascertainment of costs for a batch, preparation of batch cost sheet, treatment of spoiled and defective work

iv. Contract Costing

a. Ascertainment of cost of a contract, Progress payment, Retention money, Escalation clause, Cost plus contract, Value of work certified, Cost of work not certified.

b. Determination of Value of work certified, Cost of work not certified, Notional or Estimated profit from a contract.

v. Process / Operation costing

a. Process cost recording, Process loss, Abnormal gains and losses, Equivalent Units of Production, Inter-process profit, Valuation of Work in progress

b. Joint products- Apportionment of Joint Costs, Methods of apportioning joint cost over joint products

c. By-products- Methods of apportioning joint costs over by-products, treatment of By-product cost

v. Costing of Service Sectors

Determination of Costs and prices of services

4. Cost Control and Analysis

i. Standard Costing

a. Setting up of Standards, Types of Standards, Standard Costing as method of performance measurement. 

b. Calculation and Reconciliation of Cost Variances -Material Cost Variance, Employee cost variance, Variable and Fixed Overheads variances

ii. Marginal Costing

a. Basic concepts of Marginal costing, contribution margin, Break-Even Analysis, Break-even and profit volume charts, Contribution to Sales Rati, Margin of Safety, Angle of Incidence, Cost-Volume-Profit Analysis (CVP), Multi product break-even analysis, Consideration of Limiting Factor (Key factor)

b. Determination of Cost of a product / service under marginal costing, determination of cost of finished goods, work-in-progress

c. Comparison of Marginal costing with absorption costing method- Reconciliation of profit under both the methods

d. Short term decision making using the above concepts (basic / fundamental level)

iii. Budget and Budgetary Control

a. Meaning of Budget, Estimates of Budget, Budget Manual, Budget setting process, Preparation of Budgets and monitoring process

b. The use of Budget in planning and control

c. Flexible budget, Preparation of Functional budget for operating and non-operating functions, Cash budget, Master budget

d. Introduction to Principal / Key budget factor, Zero based budgeting (ZBB), Performance Budget, Control ratios and Budget variances.

Syllabus

Objective

To analyze and integrate the concepts, principles and provisions of accounting, auditing, taxation, corporate laws, finance and business strategy and management to address issues in practical case scenarios.

Coverage

The paper will include case studies covering the the following areas.

1. Financial Accounting and Reporting
2. Audit and Assurance
3. Taxation
4. Finance and Financial Management
5. Management Accounting
6. Corporate Laws
7. Business Strategy and Management

Objective

1. To apply various cost management techniques for planning and controlling performance in order to monitor and control strategic objectives

2. To develop skills of analysis, synthesis and evaluation in cost management to address challenges which might affect or influence the management of performance within organizations

Contents

Part A: Strategic Cost Management and Decision Making

Sub Part 1: Strategic Cost Management

1. Introduction to Strategic Cost Management

i. Concept of Strategic Cost Management

ii. Limitations of Traditional Cost Management

iii. Traditional vs. Strategic Cost Management

2. Modern Business Environment

i. Introduction / Characteristics of the Modern Business Environment

ii. Cost of Quality, Total Quality Management, Business Excellence Model

iii. Throughput Accounting and Theory of Constraints

iv. Supply Chain Management (SCM)

v. Gain Sharing Arrangements

vi. Outsourcing

3. Lean System and Innovation

i. Introduction to Lean System

4. Cost Management Techniques

i. Cost Control / Waste Control, Cost Reduction

ii. Target Costing

iii. Value Analysis and Value Engineering

iv. Pareto Analysis

v. Life Cycle Costing

vi. Environmental Management Accounting

5. Cost Management for Specific Sectors

i. Agricultural Sector

ii. Information Technology Sector

iii. Power Sector

Part B: Performance Evaluation and Control

Sub Part I: Performance Evaluation and Reporting

1. Performance Measurement and Evaluation

2. Divisional Transfer Pricing

i. Meaning, Purpose and Principles of Transfer Pricing

ii. Methods of Transfer Pricing

iii. The Beahavioural Consequences arising from Divisional Structures

iv. International Transfer Pricing

3. Strategic Analysis of Operating Income

i. Operating Profit Analysis

ii. Advanced Activity Based Costing, Activity Based Management (ABM), Activity Based Budgeting (ABB) 

Sub Part II: Managerial Control

1. Budgetary Control

i. The Concept of Feedback and Forward Control

ii. Behavioural aspects of Budgeting - Imposed Style, Participative Budget

iii. Behavioural aspects of Budgetary Control 

iv. Beyond Budgeting

2. Standard Costing

i. Advanced Analysis of Variances

ii. Integration of Standard Costing with Marginal Cost Accounting

iii. Reconciliation of Profit

iv. Variance Investigation Techniques, Interpretation of Variances, Possible interdependence between variances and reporting

v. Behavioural aspects of Standard Costing, Limitations of Standard Costing (including its use in the contemporary environment)

Part C: Case Study

Case Study (covering Course Concepts)

General Note

Application of the following qualitative techniques are required to be studied to have linkage to course concept

a. Linear Programming

b. Learning Curve / Experience Curve

Syllabus

Objective

(a) To acquire the ability to integrate and solve problems in practical scenarios on Indian Accounting Standards for deciding the appropriate accounting treatment and formulating suitable accounting policies

(b) To gain the prowess to recognize and apply disclosure requirements specified in Indian Accounting Standards while preparing and presenting the financial statements

(c) To develop the skill to prepare financial statements of group entities which includes subsidiaries, associates and joint arrangements based on Indian Accounting Standards

(d) To develop an understanding of the various forms of reporting (other than financial statements) and accounting for special transactions and apply such knowledge in problem solving.

Contents

1. Framework for preparation and presentation of financial statements in accordance with Indian Accounting Standards (Ind AS)

2. Application of Indian Accounting Standards (Ind AS) with reference to General Purpose of Financial Statements

(i) Ind AS on First time adoption of Indian Accounting Standards

(ii) Ind AS on Presentation of Items in the Financial Statements

(iii) Ind AS on Measurement based on Accounting Policies

(iv) Ind AS on Income Statement

(v) Ind AS on Assets and Liabilities of the Financial Statements including Industry specific Ind AS

(vi) Ind AS on items impacting the Financial Statements

(vii) Ind AS on Disclosures in the Financial Statements 

(viii) Other Ind AS

3. Indian Accounting Standards on Group Accounting

(i) Business Combinations and Accounting for Corporate Restructuring (including demerger) (as per Ind AS)

(ii) Consolidated and Separate Financial Statements (as per Ind AS)

4. Accounting and Reporting of Financial Instruments (as per Ind AS)
5. Analysis of Financial Statements
6. Integrated Reporting
7. Corporate Social Responsibility Reporting

Module 1: The financial reporting environment (25%)

1.1 Describe the regulatory environment for financial reporting in Australia and the reasons for accounting and reporting requirements
1.2 Discuss the main types of business entity and explain the reasons for selecting each structure
1.3 Identify different types of accounting regulation, including laws, Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards
1.4 Explain how the requirements of users, together with social and environmental developments, impact the underlying principles and requirements of financial reporting and the desire to establish a single set of international accounting standards
1.5 Describe the role of the International Accounting Standards Board in developing a regulatory framework and explain how new policies and standards are established
1.6 Identify the purpose of a conceptual framework and the key characteristics in the GAAP and apply this knowledge to define and recognise the different elements of the financial statements
1.7 Describe and demonstrate the role of accounting standards and accounting policies in fairly presenting the financial performance and financial position of an entity

Module 2: The accounting theory (15%)

2.1 Compare historical cost accounting with other methods of valuation and explain the difference
2.2 Explain agency and contracting theories and how they relate to accounting policy choice (positive accounting theory)
2.3 Apply the recognition criteria for the elements of the financial statements according to the conceptual framework (normative theory)
2.6 Discuss the use of an accounting software package

Module 3: Financial statements (15%)

3.1 Prepare and present the statement of profit or loss and other comprehensive income with appropriate disclosure in accordance with relevant accounting standards and policies
3.2 Prepare and present the statement of financial position with appropriate disclosure in accordance with relevant accounting standards and policies
3.3 Prepare and present the statement of cash flows in accordance with relevant accounting standards and policies
3.4 Demonstrate the ability to detect, investigate and correct discrepancies or particular items and events while matching the financial statements to supporting documentation

Module 4: Application of specific accounting standards (22%)

Module 5: Business combinations (13%)

Module 6: Analysis of financial statements (10%)

Module 1: Introduction to capital and money markets (7%)

1.1 Specify the function and structure of the financial markets and the role of the various market participants
1.2 Discuss regulation in the finance industry
1.3 Describe sources of international finance

Module 2: Introduction to financial theories (13%)

2.1 Interpret the future and present values of a series of single cash flows and of annuities
2.2 Demonstrate the relationship between systematic risk and expected return of individual securities and portfolios using the Capital Asset Pricing Model (CAPM) and the security market line relationship
2.3 Distinguish between the weak form test, the semi strong form test and the strong form test of the Efficient Market Hypothesis (EMH)
2.4 Explain the implications of market efficiency for both investors and companies
2.5 In the context of capital markets distinguish between operating efficiency, allocative efficiency and pricing efficiency

Module 3: Introduction to risk identification, assessment and management markets (13%)

3.1 Define the term risk
3.2 Describe the different types of risk in international trade
3.3 Explain the different methods of risk assessment in international trade
3.4 Identify the key financial risks facing a business

Module 4: Sources and cost of finance (18%)

4.1 Identify the characteristics, terms and conditions of the alternative sources of short, medium and long term
finance
4.2 Evaluate the suitability of different methods of finance in a given scenario
4.3 Analyse the cost of various sources of finance
4.4 Explain the different sources of long term finance
4.5 Apply the concepts of financial mathematics to loans, and debt and equity securities with the use of effective interest rates
4.6 Calculate and interpret the weighted average cost of capital (WACC)

Module 5: Liquidity Management (11%)

5.1 Analyse the various sources of short term finance
5.2 Demonstrate the link between working capital management and corporate cash flow
5.3 Describe the operating cycle in working capital management to explain inventory management, debtor management and cash management
5.4 Prepare short term finance plans and strategies

Module 6: Capital structure and management (15%)

6.1 Describe the impact of the external financial markets
6.2 Explain the factors which influence the dividend policy decision

Module 7: Cash flow valuation and management (10%)

7.1 Explain the characteristics of major long-term investments where a 'capital budgeting' approach might be required
7.2 Apply different quantitative methods used in project evaluation
7.3 Compare and contrast the ROI, IRR, payback and NPV methods of investment appraisal
7.4 Explain why investment decisions should be analysed using the NPV method
7.5 Apply the NPV method to investment project scenarios
7.6 Select investment appraisal techniques which are appropriate to the objectives and circumstances of a given organisation taking account of working capital, inflation and tax
7.7 Undertake a sensitivity analysis of diverse projects using appropriate tools
7.8 Analyse capital rationing and draw appropriate conclusions
7.9 Calculate the weighted average cost of capital and apply it in capital budgeting

Module 8: Market and credit risk management (8%)

8.1 Describe the characteristics of derivatives and other hedging instruments
8.2 Apply different methods of managing currency risks
8.3 Select methods of managing interest rate exposure
8.4 Identify the advantages and disadvantages of different hedging strategies
8.5 Identify different methods of hedging which are appropriate to meeting an organisation's objectives

Module 9: Investment management (5%)

9.1 Demonstrate the relationship between systematic risk and expected return of individual securities and portfolios using the Capital Asset Pricing Model (CAPM) and the security market line relationship
9.2 Distinguish between the weak form test, the semi strong form test and the strong form test of the Efficient Market Hypothesis (EMH)
9.3 Explain the implications of market efficiency for both investors and companies
9.4 In the context of capital markets distinguish between operating efficiency, allocative efficiency and pricing efficiency
9.5 Analyse measures of expected return and risk using the probability distribution approach
9.6 Analyse and interpret rates of return on financial investments
9.7 Analyse measures of expected return and risk for two-security portfolios
9.8 Analyse share price in both perfect and imperfect markets
9.9 Explain the impact of portfolio leveraging and short selling on the risk and expected return of two-security portfolios
9.10 Assess portfolio risk

This course equips the participant to understand the concepts and techniques relating to Technical Analysis of price and volume of securities traded in stock exchanges based on real data with the help of MS Excel and VBA. At the end of the course the participant will have the confidence and skills required to analyse the price movements and to make informed decisions as a prospective analyst or investor.

This program consists of the following modules based on live data.

1. Downloading of Data from the Website of the Stock Exchange
2. Collating the Data
3. Cleaning  the Data
4. Arranging the Data
4. Segmenting the Data
5. Computing the Statistics
6. Preparation of Charts
7. Analysis and Presentation of Data and the Analysis
Application of MS Excel and VBA all throughout the Modules

Module Aim 

This course is designed to provide candidates with an overview of the presentation and disclosures of financial statements and an advanced knowledge of selected important accounting standards.

Syllabus Learning Outcomes 

Candidates will be able to: 

 Understand the framework for the preparation and presentation of financial statements and the disclosure issues. 

 Identify the basic and further issues in the preparation of consolidated financial statements.  Understand the basic concepts of deferred tax accounting, the disclosures and presentation issues. 

 Understand the concepts relating to foreign currency transactions and translation. 

 Account for financial instruments. 

 Understand emerging or other accounting issue

Module outline and detailed syllabus

1. Overview of Financial Statements 

 Framework for the preparation and presentation of financial statements 

 Objective of financial statements 

 Qualitative characteristics of financial statements 

 Recognition and measurement of the elements of financial statements 

 Concepts of capital and capital maintenance 

 Financial statements 

 Statement of Financial Position 

 Statement of Comprehensive Income

  Concept of comprehensive income 

 Income Statement 

 Statement of Cash Flows 

 Statement of Changes in Equity 

 Notes to accounts 

 Other disclosure issues in the financial statements 

 Changes in accounting policy and estimates and correction of errors 

 Events after the balance sheet date 

 Provisions, contingent liabilities and contingent assets 

 Operating segments 

 Related party disclosures 

 Earnings per share 

2. Consolidated Financial Statements 

 Basic issues in the preparation of consolidated balance sheet and consolidated income statement 

 The acquisition method  Goodwill on consolidation 

 Fair value adjustments  

 Non-controlling interests 

 Inter-company transactions and unrealised gains/losses 

 Further issues in the preparation of consolidated balance sheet and consolidated income statement 

 Investments in associates and equity accounting 

 Loss of control 

 Re-measurement of previously-held interests on acquisition date 

 Reverse take-overs 

 Complex group structure (e.g. father-son-grandson structure) 

 Interests in joint-ventures 

3. Accounting for Income Taxes 

 Basic concepts in deferred tax accounting 

 Rationale for deferred tax accounting 

 Concept of tax base and temporary differences 

 Taxable and deductible temporary differences 

 Recognition of deferred tax assets/liabilities 

 Accounting for temporary differences 

 Recognized assets and liabilities in separate financial statements 

 Revaluation of recognized assets and liabilities in separate financial statements 

 Initial recognition of assets and liabilities in separate financial statements 

 Fair value adjustments recognized under the acquisition method in consolidated financial statements 

 Goodwill 

 Investment in subsidiaries and associates 

 Accounting for deferred tax assets 

 Accounting for tax losses 

 Deductible temporary differences 

 Measurement issues 

 Measurement of deferred tax assets/liabilities 

 Measurement of tax expense 

 Presentation issues 

 Presentation of current tax payable 

 Presentation of deferred tax assets/liabilities 

 Presentation of tax expense 

 Disclosure requirements 

 Reconciliation of effective tax rate/amount to statutory tax rate/amount 

 Analysis of temporary differences 

 Other disclosures 

4. Foreign Currency Transaction and Translation 

 Foreign currency transactions and balances 

 Concepts relating to functional currency and presentation currency 

 Translation of foreign currency transactions and balances into an entity’s  functional currency

 Monetary items versus non-monetary items 

 Treatment of exchange gains/losses

 Foreign operations

 Re-measurement of foreign currency financial statements to the functional currency 

 Translation of financial statements prepared in an entity’s functional currency to a different presentation currency 

 Translation of foreign currency financial statements of subsidiaries and associates to the presentation currency of the parent 

 Translation gains and losses arising from translation of the separate financial statements of a subsidiary or an associate 

 Translation gains and losses arising from the translation of goodwill and fair value adjustments 

 Allocation of translation gains and losses to non-controlling interests 

5. Accounting for Financial Instruments

 Theoretical and practical considerations underlying the application of FRS 32, FRS 39 and FRS 107 

 Recognition and derecognition 

 Recognition of financial assets: primary instruments and derivative instruments, stand-alone and embedded derivatives 

 Recognition of financial liabilities 

 Derecognition of financial assets and liabilities 

 Measurement 

 Measurement of financial assets: “fair value through profit or loss”, “available-for-sale”, “held-to-maturity”, and “loans and receivables” 

 Measurement of financial liabilities 

 Presentation 

 Substance over form 

 Split accounting for compound instruments 

 Off-setting of financial assets and financial liabilities 

 Disclosure 

 Risk management policy 

 Fair values 

 Other disclosures 

 Hedge accounting 

 Fair value hedge 

 Cash flow hedge 

 Hedge of investment in foreign entity 

6. Emerging or Other Accounting Issues

This topic deals with conceptual and qualitative issues relating to: 

 IFRS 9 Financial Instruments 

 Compensation-related issues including accounting for share-based compensation  

 Issues addressed in exposure drafts (ED/FRS and ED/INT FRS) that have significant impact on future accounting practices 

 Contentious or evolving issues relating to Topics 1- 5 of this syllabus

Module Objective

 The Accounting for Decision Making module develops cost accounting techniques for planning, control, and decision making. The key focus is on analysis of relevant information for decision making by management. Upon successful completion of this module, Candidates will have gained practical knowledge through the application of various strategic management accounting tools and techniques. 

Module Assessment 

The Foundation Programme is assessed by way of centralised examinations. Each module will be assessed by way of a 3-hour and 15 minutes restricted open-book written examination. There will be four questions, and each question may have multiple parts requiring structured responses. 

THE MODULE AT A GLANCE 

A Explain managerial accounting and its primary responsibilities in organisations and classify costs used in managerial accounting. 

B Apply various cost management tools for analysis and decision making. 

C Prepare master and flexible budgets and apply standard costs to compute and interpret the cost variances. 

D Identify various types of responsibility centres and evaluate various types of short-term. 

E Analyse various types of strategic models in managerial accounting. 

F Discuss the application of balanced scorecard and performance measurements for strategic planning and control for sustainable business. 

WEIGHTAGE 

ASSUMED KNOWLEDGE 

1. Basic application of common costing techniques and associated terminology; 

2. Basic application of budgeting techniques; and 

3. The ability to identify variances and possible causes.

Scope of the Program

This program illustrates application of MS Excel in making informed decisions based on the Monte Carlo Simulation Concept.