SYLLABUS

ACCOUNTING THEORY
(3 SKS)
Semester I

SYLLABUS

ACCOUNTING THEORY
I.

NAME OF FACULTIES

1. Dr. Regina J. Arsjah, SE, Msi. Ak.

(Email: regina.arsjah@bakrie.ac.id)

2. Antonius N. Herusetya, SE, Ak, MM.

3. Dr. Endah Sri Wahyuni, SE, Msi.

II.

COURSE DESCRIPTION
Accounting Theory Course helps students to better appreciate the context of
financial reporting. It will describe how the accounting theories are formulized,
who involved in the process and what arguments accompanied the process. In
real life, management must choose among alternative accounting methods,
for his/her decision he/she needs more information about the chosen method,
the background ideas of the method and the context of the method.

III.

IV.

COURSE PREREQUISITE :

Principle of Accounting, Intermediate Accounting 1 & 2

TEXTBOOK

Financial Accounting Theory and Analysis : Text and Cases. Schroeder,

Clark and Cathey. 9/10 ed. Willey, 2009
V.

OBJECTIVES
After this course, the students will have:
1. Understanding the factors which influence accounting choices by
managers.
2. Understanding financial reporting rule-makers.
3. Understanding how to identify appropriate accounting treatment in
complex situations.
4. Abilities to think critically and to defend arguments by understanding the
process of accounting theory formulation.

VI.

METHODS OF INSTRUCTION
Guided discussion, group presentation.

VII.

ATTENDANCE PROCEDURE

The instructor will utilize the University's policy for attendance.

VIII. METHODS OF EVALUATION

Topic Summary. These include at least two pages summary for every group
on every topic. Groups which do not give presentation/case, are obliged to
make case summary/article summary (page 1-2).

Presentation. In group, students give 60 minutes-length presentation. This

presentation is according to the weekly topic. Both students and instructor
grade the presentation.
Summary of the grading :
Mid-test

35%

Final test

35%

Presentation/Topic Summary/Attendance

30%

COURSE OUTLINE

Week

Topic
ACCOUNTING THEORY AND CONCEPTUAL FRAMEWORK
Chapter 1
Ch. 1
The Early History of Accounting: The Mission
Page 1 5
of the FASB, Types of Pronouncements,
Page 12
Emerging Issues, Economic Consequences
23
The Evolution of the Phrase GAAP
The Role of Ethics In Accounting
Accounting in Crisis
Chapter 2
The Early Theorists
Statement on Accounting Theory and Theory
Acceptance, Criticism of the Approaches to
Theory, Evaluation of SATTA
The FASBs Conceptual Framework Project:
SFAC No.1, SFAC No. 2, SFAC No. 5,
Principles-Based vs Rules-Based Accounting
Standards
The FASB-IASB Financial Statement
Presentation Project

Ch. 2

Page
32
Page
54
Page
62
Page
70

29
41
58
66

INTERNATIONAL ACCOUNTING AND RESEARCH

METHODOLOGY
Chapter 3
Ch. 3
International Business Accounting Issues
Page 75 78
Development of Accounting Systems: Level of
Page 92 96
Education, Political System, Legal System,
Page 98 102
Economic Development
Page 106 107
The Use of IAS
Current Issue
Framework for the Preparation and Presentation
of Financial Statements: The Objective of FS,
Qualitative Characteristics, The Elements of
FS, Concepts of Capital and Capital

Maintenance
IASNo.1 and IFRS No.1
Ch. 4
Chapter 4
Page 111 131
Research Methodology: Deductive Approach,
Inductive Approach, Pragmatic Approach,
Scientific Method of Inquiry, Other Approaches
The Outcomes of Providing Accounting
Information: Fundamental Analysis, The EMH,
Weak Form, Semistrong Form, Strong Form,
The Implication of EMH, The CAPM, Type of
Risk Normative vs Positive Accounting Theory,
Agency Theory, Human Information
Processing, Critical Perspective Research,
The Relationship among Research, Education,
and Practice

INCOME CONCEPT
Nature of income: Capital Maintenance Concepts, Ch. 5
Exit Value or Selling Price, Discounted Present Page 135 148
Value, Current Value and the Historical
Page 151 161
Accounting Model.
Income Recognition: Meaurement, Accounting
for Inflation, Revenue Recognition and
Realization, Revenue Recognized, Matching,
Conservatism, Materiality,
Earnings Quality, Earnings Management, and
Fraudulent Financial Reporting
THE INCOME STATEMENT
Economic Consequences if Financial Reporting
Ch. 6
Page 169 206
Income Statement Elements
Statement Format: APB Opinion No. 9, Income
from Continuing Operations, Discontinued
Operations, extraordinary Items, Accounting
Changes, EPS, Comprehensive Income Prior
Period Adjustments
Proposed Format
The Value of Corporate Earnings: Sources of
Revenue, Persistence of Revenues, MDA, Gross
Profit Analysis, Net Profit Analysis,
IAS.
THE BALANCE SHEET AND THE STATEMENT OF CASH FLOWS
The Balance Sheet: Assets, Asset Valuation,
Ch.7
Page 215 251
Liabilities, Liability Valuation, Equity, Fair
Value Measurements

Statement fo cash flows

IAS

10

WORKING CAPITAL
Working capital concept
Ch. 8
Current Usage
Page 258 262
Components of Working Capital
Page 274 - 283
IAS
PROPERTY, PLANT AND EQUIPMENT
PPE
cost allocation
depreciation
Ch. 9
capital and revenue expenditures
Page 290 315
recognition and measurement
impairment value
IAS
MID SEMESTER TEST
INVESTMENT AND INTANGIBLES
Investment in equity securities
Ch. 10
Debt securities; permanent decline in fair value
Page 322 355
Transfers of financial assets
Intangibles, financial analysis of investment and
intangibles
IAS

LONG-TERM LIABILITIES
Recognition and measurement
Ch. 11
Debt vs equity
Page 362 398
Other issues
Debt restructuring
Financial analysis
IAS
ACCOUNTING FOR INCOME TAXES
Ch. 12
Historical perspective
Page 406 414
Income tax allocation
Page 419 426
Permanent and temporary differences
Page 434 438
Alternative interperiod tax allocation methods
Financial analysis
IAS

11

LEASES, PENSIONS AND OTHER POSTRETIREMENT

BENEFITS
Classifying leases
Ch. 13
Financial analysis
Page 444 463
IAS
Ch. 14

Historical perspective
Accounting for pension fund
Financial Analysis
IAS

Page 470 485

Page 490 492
EQUITY

12

13

14

Theories
Definition
Reporting of equity
Financial analysis of SHE
IAS

Ch. 15
Page 497 510
Page 518 525

ACCOUNTING FOR MULTIPLE ENTITIES

Business combination
Accounting for business combinations
Ch. 16
Consolidations
Page 532 538
Theories of consolidations
Page 539 540
Noncontrolling interest
Page 542 548
Drawbacks of consolidations
Page 553 556
Special-purpose entities
Page 561 565
Foreign currency translation
IAS
FINANCIAL REPORTING, DISCLOSURE AND ETHICS
Recognition and measurement criteria
Areas directly affected
Ch. 17
Other means of financial reporting
Page 570 583
Other information
Page 590 592
Points of SEC
Page 596 599
Ethical responsibilities
IAS.
FINAL SEMESTER TEST