Corporate Accounting

PGDM Class of 2014-16

Term 4 Aug15-Oct15

Instructor: Simerjeet Vasdev

Cabin No. 335 (3rd Floor)
simerjeet.vasdev@iilm.edu

TO DO FOR THE FIRST CLASS

Read the module plan carefully before coming for the first class so as to understand the purpose
and benefits of the course. Module plan shares the module overview and session plan along with
the assessment to evaluate the learning through various assessment methods.
Course Focus: What are we aiming at?
This course will provide you the conceptual understanding of the principles involved in the
maintenance of company accounts in accordance with the company law and accounting
standards. It provides an insight into the accounting for share capital transactions, valuation of
intangibles, accounting for amalgamations and also consolidation of accounts. Two Harvard case
studies are also included for better understanding of the practical application aspect of related
concepts .
In nutshell we are aiming to provide you the working knowledge of accounting principles and
procedures for companies in accordance with the statutory requirements.
Why should you do this course?
Accounting is a growing field with huge range of opportunities. One of the factors about career in
accountancy is that, regardless of size and scale all organizations are required to keep track of
their finances, transactions and budgets, as well as maintain and issue accounts, all of which
require accountants. The Issuance of new set of Accounting and reporting standards (Ind AS &
XBRL) by Ministry of Corporate Affairs has made the role of Accountant even more significant
in the corporate world.
This course also covers the recognition, accounting, presentation and disclosure requirements in
relation to financial instruments. Thus, it is quite relevant for the one who is planning to go ahead
in his career in the area of "Treasury or Financial Instruments" .
In nutshell,this course will give you insight to deal with the corporate accounting and significant
areas involved in preparation of final accounts.
Why is this course different?
This course is an application based course where you will be able to understand the important
concepts involved in corporate accounting across various industries and sectors. You will be get
equipped to understand and also prepare the final accounts at corporate level. The course is
delivered through a number of industry relevant examples, Harvard Cases and readings.
You may be wondering, why are we doing this? The primary reason is that not all learning can be
imparted through discussions, certain aspects of learning can be internalized only through

practice within the framework of law governing those concepts. Corporate accounting requires
thorough understanding of the concepts covered as per the laws/standards governing them
Module Pre-Requisites: The core course on "Basics of Accounting" will be a pre requisite in the
module. The basic concepts of accounting will be helpful in understanding the topics covered in
Corporate Accounting.
Preparing for the class:
We believe in learning through participation so a) learning through class discussion and dialogue
helps in achieving the objective of this module b) also peer learning contributes in the overall
learning in the classroom. The concepts are delivered using live examples so it involves a lot of
calculation and problem solving exercises.
The course outline has detailed session plan which includes readings and cases. You are required
to come prepared by going through the material already uploaded on Neo LMS. The quality of
discussion will contribute the overall achievement of programme level goals.

Module Overview
Session
Topics
1
Understanding the structure of capital in case of companies
2

Understanding the different types of Preference shares and the

requirements of Company law for their redemption

Discuss new tools with respect to shares used by companies like

ESOP, Sweat Equity shares etc & their accounting in financial
books

4
5

HBSP Case study -Jimmy Fu and Moong Inc.

Statutory provisions & fundamental principles for preparation of
final accounts

6-7

Understanding & preparing Consolidated Financial statements

8-10

Accounting framework of Mergers & Acquisitions as per the Indian

laws and regulations

11

Valuation of Intangibles & its impairment

12

Live Case on Holding company accounts

Pedagogy
Lecture and
Problem solving
exercises
Lecture,
discussion &
Problem solving
exercises
Lecture,
discussion &
Problem solving
exercises
Discussion based
on live example
of Final accounts
of company
Lecture,
discussion &
Problem solving
exercises
Lecture,
discussion &
Problem solving
exercises
Lecture,
discussion &
Problem solving
exercises
Live case
discussion

Date

13

Implications of accounting of foreign currency transactions on

financial statements

14, 15

Lecture,
discussion &
Problem solving
exercises
Lecture,
discussion &
Problem solving
exercises

Understanding the accounting of Financial Instruments &

derivatives as per Accounting standards

16

End term examination

Assignments due Dates and Times

Nature of Assignment
Individual
Individual

Assignment
Scheduled test
Term End Closed Book
Exam

Date of submission
Will be communicated
Will be communicated

Details of Assessment Component:

Scheduled Test
2 Scheduled tests of 5 marks each would be held at different levels of the course to judge the
understanding of the students. The main intention would be to identify if the students are relating
the different accounting terminologies and concepts with the financial reports. These tests would
have both objective and subjective contents. The examination may include news items for
analysis and/or short questions and/or problems with no options to choose..
The unscheduled test will:

Measure the learning of corporate accounting terminology

Measure the learning of various concepts and tools for specified areas covered in the
module

Measure the application of accounting standards covered in the module

End Term Examination( 90 minutes, Individual ,10 marks)

Open book case/current news based end term exam will be conducted within the scheduled
examination calendar. The examination may include a case, news items for analysis and/or short
questions and/or problems with no options to choose. Performance will be assessed on a 5 point
scale.( 5 Excellent, 4 Good, 3 Average, 2-Below Average, 1-Poor).
This examination will enable you to gauge your overall conceptual understanding, and analytical
ability.
This table shows main assessment methods which are used across module and its stages:

Assessment Map
Methods of Assessment
Module

A1
*

A2

A3
*

A4

A5

A1- Individual assignment/case study

A2- Group assignment/ project/business plan
A3- Open book examinations/ case study
A4- Closed book examinations
A5- Group Presentations
Teaching Map
Teaching Map
Module

T1

T2

T3

T4

T5

T6

T1- Lectures
T2- Seminars/Tutorials
T3- Live projects/presentations
T4- Case study
T5- Guest Lectures
T6- Industrial Visits
Curriculum Map
Programmed Learning Outcomes
Module

L1

L2

L3

L4

L5

L6

L7

L8
*

L1: An understanding of organizations, their external context and their management

L2: An awareness of current issues in business and management which is informed by research
and practice in the field.
L3: An understanding of the appropriate techniques sufficient to allow investigation into relevant
business and management issues.
L4: The ability to acquire and analyze data and information.
L5: The ability to critically analyze and creatively apply relevant knowledge to practical situation.
L6: The ability to work and lead effectively in a team based environment.

L9

L7: An improvement in both oral and written communication.

L8: Be cognizant of the impact of their individual and corporate actions on society and recognize
responsible business practices.
L9: Be sensitive to the social, economic, and environmental responsibilities of business.
Readings
Main Text:
The course pack contains mostly articles , cases and videos around the different concepts covered
in the module .
References

Corporate Accounting V.Rajasekaran, R.Lalitha(2011), Pearson

Corporate Accounting- Dr. S.N.Maheshwari & Dr. S.K.Maheshwari ,5 th Edition

Journals

Chartered Accountant Journal

Recommended Articles, Other material- Given in the table below

Shared/
isolated

No of
pages

Topic Discussed

Title

Case No.
Cases

To be
shared as
HBSP
case
To be shared
as PDF

11

Shareholder Equity and

recent concepts in the area
of equity

HBSP Case study -Jimmy Fu and

Moong Inc.

1.

Consolidation

Live Case on Holding company

accounts
Background notes/Articles

2.
Required
Reading
1.

To be
shared as
an article
To be
shared as a
link

10

Foreign Currency
transactions

Note on Transaction &

Translation exposure

Mergers & Acquisitions

Accounting for amalgamation of

companies
http://www.indiastudychannel.co
m/resources/153135-Accountingfor-amalgamation-ofCompanies.aspx

To be
shared as a
link

Consolidated Financial
statements

What Companies Act 2013 states

on CFS
http://www.ey.com/Publication/v
wLUAssets/EY-consolidatedfinancial-state/$FILE/EYconsolidated-financial-

3.

statements.pdf
To be
shared as a
HBSP
article

23

Financial Instruments

Foreign exchange markets and

transactions
205016-PDF-ENG

4.

Desired
Readings
Share Capital, Debentures,
Final accounts, valuation of
intangibles,Amalgamation,
Reconstruction
Share Capital, Debentures,
Final accounts, valuation of
intangibles,Amalgamation,
Reconstruction, Accounting
for Financial Instruments

To be
shared as a
link

9
minutes

Identifiying and recording

impairment of intangibles

To be
shared as a
link

10
minutes

Employee Stock Option

Corporate
Accounting

V.Rajasekaran, R.Lalitha(2011),
Pearson

1.

Corporate
AccountingS.N.Maheshwari
&
S.K.Maheshwari

2.

Dr.
Dr.

Goodwill impairment testing

https://www.youtube.com/watch?
v=LVm1pt4tcqQ
Employee Stock Option Basics
https://www.youtube.com/watch?
v=-qA2pc9UvDI

Videos/Simul
ation
1.

2.

Detailed Schedule
Session 1: Understanding the structure of capital in case of companies
This session introduces the concept of joint stock company and enlist its characteristics .It will help
you to understand the meaning of Share, different classes of shares and their salient features. Session
will also include briefing on different types of share capital.You will also learn about the accounting
treatment at the time of issue of shares- at par, premium and discount.
Desired Readings:
Section 1-Chapter 2: Shares & Share Capital, Corporate Accounting by Dr SN Maheshwari & Dr SK
Maheshwari
Session 2: Understanding the different types of preference shares and the requirements of

Company law for their redemption

You will be able to understand the provisions of companies Act relating to issue and redemption of
Preference shares. Learn how to pass required journal entries for redemption of preference shares.
Understand, create and utilize Capital Redemption Reserve Account
Desired Readings:
Section 1-Chapter 2: Shares & Share Capital, Corporate Accounting by Dr SN Maheshwari & Dr SK
Maheshwari

Session 3: Discuss new tools with respect to shares used by companies like ESOP, Sweat Equity
shares etc & their accounting in financial books
You will be able to understand the different types of new tools used by corporates in their capital
structures and the reason for same.You will cover in particular ESOP, Sweat Equity Shares , right
shares and Buy back of Shares
Required Reading: Employee Stock Option Basics
https://www.youtube.com/watch?v=-qA2pc9UvDI
Desired Readings: Section 1-Chapter 2, Shares & Share Capital, Corporate Accounting by Dr SN
Maheshwari & Dr SK Maheshwari
Session 4: HBSP Case study -Jimmy Fu and Moong Inc.
The case introduces students to different components of equity in a companys balance sheet and how
they arises.It will also cover employee stock options.
Session 5:Statutory provisions & fundamental principles for preparation of final accounts of the
company
You will be able to understand the statutory provisions relating to preparation of final accounts of the
company. You will learn some important and fundamental principles for the preparation of final
accounts
Prior Period items
Extra ordinary items
Contingencies
Managerial remuneration
Desired Readings: Section1-Chapter 5, Company Final Accounts, Corporate Accounting by Dr SN
Maheshwari & Dr SK Maheshwari
Session 6,7: Understanding & preparing Consolidated Financial statements
This session will help you to understand the Consolidated financial statements.Understand the
requirements of companies Act. You will understand the important factors and their accounting
treatment such as: (i) elimination of investment account; (ii) minority interest; (iii) cost of control or
goodwill; (iv) revenue profits or post-acquisition profits; (v) revenue losses or post-acquisition losses;
(vi) capital profit & losses or pre-acquisition profits and losses; (vii) revaluation.
You will learn to prepare Consolidated balance sheet of a holding company and its subsidiaries.

Desired Readings: Section 2-Chapter 4, Holding Companies, Corporate Accounting by Dr SN

Maheshwari & Dr SK Maheshwari
Session 8-10:Accounting framework of Mergers & Acquisitions as per the Indian laws and
regulations
The session will give in-depth understanding about the term amalgamation and its types.Learn the
methods of amalgamation accounting in accordance with accounting standards.
-Pooling of Interest Method and
-Purchase Method
Understand the computation of the consideration in case of amalgamation. Record transactions in the
books of the purchasing and selling companies
Desired Readings: Section 1-Chapter 9, Amalgamation and Absorption , Corporate Accounting by Dr
SN Maheshwari & Dr SK Maheshwari
Session 11: Valuation of Intangibles and impairment
The session helps you to do valuation & impairment of intangibles as per accounting standard .You
will focus mainly on valuation of
Goodwill
Brand
Desired Readings: Section 1-Chapter 6, Valuation of Goodwill , Corporate Accounting by Dr SN
Maheshwari & Dr SK Maheshwari

Session 12: Live Case on Holding company accounts

Session 13: Implications of accounting of foreign currency transactions on financial statements

Due to globalisation of the economy, the financial market and international transactions has grown
leaps and bounds in the last decade. In this session, you will learn how to record foreign currency
transactions in the books of account and the implications of exchange rate changes on recording and
reporting of financial statements..You will also get a brief understanding of Forward exchange contract
and their accounting treatment.
Desired Readings: Detailed note to be shared by faculty
Session 14 & 15: Understanding the accounting of Financial Instruments & derivatives as per
Accounting standards
During the last few years, a number of new financial instruments have assumed significance in the
Indian Economy. With rapid globalization this trend is likely to accelerate in future. This session will
help you to understand the different types of financial instruments. Session will enable you to learn

treatment prescribed by Accounting standards in India for the following

When is a financial instrument recognized in books
At what value financial instruments are recognized at the inception
At what value financial instruments are carried in books over time
When a financial instrument is derecognized in the books
Hedge accounting
All these concepts will be taught through numerical to ease out in understanding at the students level
Required Readings: Section 1-Chapter 12, Accounting for Financial Instruments , Corporate
Accounting by Dr SN Maheshwari & Dr SK Maheshwari
Introduction to Derivative Instruments, HBSP Note,295141-PDF-ENG
Desired Readings: Section 1-Chapter 12, Accounting for Financial Instruments , Corporate
Accounting by Dr SN Maheshwari & Dr SK Maheshwari
Session 16: End term examinations

Pre-Course Survey
Name:
PG Registration Number:
The objective of the survey is to familiarize the tutors with the expectations the students
have from the module.

What comes to your mind when you think of a paper with this name?

How would you rate numerical skills? (on a scale of 1-10, 1 been least and 10 been the
highest)

When was the last time you had a paper on accounting?

Secondary School

Higher Secondary School (12th Standard)

Graduation college

At the end of the module, you should be able to:

Be familiar with all the topics and terminology

Understand all the topics

Understand all the topics and be able to apply them

Develop mastery over the entire module

Do you think your graduation qualification will influence your performance in this
course?

How many hours are you planning to spend on this course? (on a weekly basis)

How do you hope this course will benefit your professional work?

Do you have any specific questions you would like the tutor to cover?

Is there anything else you would like to share with the tutors?

Module Plan Checklist

Recommended
Cases(HBSP)
Brief Cases (HBSP)
Articles
Integrated Cases
Essential Readings
Desired Readings
Videos
Co- Teaching with other Area Faculty
Pre-Course Survey

3
4
5
1

Actual
1
1 (Live Data)
4
0

100 Pages
100 Pages
2
2 Sessions
Compulsory

2
2 sessions
Pre course survey
added