Subject Code Subject Title Credit Value Pre-requisite / Co-requisite / Exclusion Role and Purposes
E-mail
ECAU601421 Business Analysis and Valuation 3 Advanced Financial Accounting 1 Investment and Capital Market This course is part of the financial accounting class. The course aims on giving deep understanding to the students about financial statements and notes to financial statement with emphasis on how to interpret, analyze, compare, and justify arguments on the financial statements and notes to financial statement. This course will help students to develop strong analytical skills and critical thinking (Outcome 4). The analyses focus on the appropriateness of accounting policies used in operating, investing, and financing activities, as well as cash flow, profitability, prospective and credit analysis. Students will be provided by concept and framework to analyze the financial statements quality of earnings, and make a presentation and communicate it in English (Outcome 1).
Subject Learning Outcomes
Detailed Course Work Plan
Upon completion of the subject, student will be able to :
1. Evaluate the appropriateness of accounting policies used to prepare financial statements. (T3) a) Understand the financial report mechanics, standards and related accounting policy particularly under IFRS, and evaluate the appropriateness of their use in preparing financial statements. b) Understand and analyze the financial statement and evaluate the appropriateness of policies on the financial statement. c) Understand and analyze the component of financial statement and evaluate the appropriateness of policies on assets, liabilities, income, taxes, employee compensation, and intercorporate investment in multinational operations. 2. Interpret financial statements and related disclosures (T5) d) Understand the concept and framework to analyze and interpret the financial statements. e) Analyze and interpret the income statement, financial position and cash flow statement. 3. Interpret reports that include non-financial data, for example, sustainability reports and integrated reports (T6) f) Analyze and interpret the integrated financial statements. 4. Demonstrate, evaluate, analyze and compare alternatives choices (C2) g) Understand and compare the financial analysis techniques. 5. Demonstrate to justify an argument or solution with supporting evidence/relevant references (C3) h) Understand, evaluate, and justify arguments on the financial report quality. Week #
Topic
Introduction to Financial Statement Analysis Scope of financial Statement Analysis Major Financial Statement and Other Information Sources Financial Statement Analysis Framework
REVIEW ON FINANCIAL STATEMENT Financial Report Mechanics Classification of Business
L O a
Required Reading RHP 1
RHP 2 RHP 3 PSAK Concept
Activities Accounts and Financial Statements Accounting Process Accrual and Valuation Adjustments Accounting systems
ual Framewo rk
Financial Report Standard
The Objective of Financial Reporting Standard Setting Bodies and Regulatory Authorities The International Financial Reporting Standard (IFRS) vs Pernyataan Standar Akuntansi Keuangan Indonesia (PSAK) Effective Financial Reporting Monitoring Developments in Financial Reporting Standards.
Weekly Assignment 1 Understanding Income Statements Components and Format of the Income Statements Revenue Recognition Expense Recognition Discontinued Operations Changes in Accounting Policy Earnings per Share Comprehensive Income Analysis of Income Statement
b e
Understanding Statement of Financial Position Components and Format of The Statement of Financial Position Current Assets and Current Liabilities Non-current Assets Non-current Liabilities Equity Analysis of Statement of Financial Position Capital structure concept
Weekly Assignment 2 General Lecturing Learning from the expert: The Use of Financial Statement
e f g
RPH 4 PSAK 1 PSAK 23 PSAK 25 PSAK 58
RHP 5 PSAK 1 PSAK 4 PSAK 65
Understanding Statement of Cash
Flow Components and Format of the Statement of Cash Flow Classification of Cash Flows and non-cash Activities Operating Activities Statement of Cash Flow Analysis Equity Analysis of Statement of Financial Position Free Cash Flow Dividend payout concept
RHP 6 PSAK 2
RHP 7 PSAK 5
d h
RHP 11 RHP 17
d g
RHP 12
b e
d g
Financial Analysis Techniques
The Financial Analysis Process Analytical Tools and Techniques Common Ratios Used in Financial Analysis Equity Analysis Credit Analysis Business Segments Model Building and Forecasting
Weekly Assignment 3 Financial Reporting Quality Conceptual Overview Context for Assessing Financial Reporting Quality Detection of Financial Reporting Quality Issues Evaluating Quality of Financial Reports Quality of Financial Reports Evaluating the Quality of Financial Reports Earnings Quality Cash Flow Quality Balance Sheet Quality Sources of Information about Risk Ethical Consideration
Performance Assessing Credit Risk Screening for Potential Equity Investments Management Discussion & Analysis section of Listed Companies Annual Reports Securities analysts reports on listed company performance and projection Analysis Adjustments to Reported Financials
Weekly Assignment 5 Submission of Final Assignment Progress Report 1 ANALYSIS OF ASSETS Inventories Cost of Inventories Inventory Valuation Methods Inventory Method Changes Inventory Adjustments Evaluation of Inventory Management
10
Weekly Assignment 6 Analysis of Liabilities Bond Payable Leasing Off balance sheet liabilities Evaluating Solvency: Leverage and Coverage Ratios Weekly Assignment 7 Analysis of Income Taxes Differences Between Accounting Profits and Taxable Income
Acquisition of Long Lived Assets Depreciation and amortization The Revaluation Model Impairment of Assets Derecognition of Long Lived Asset Investment Property Off balance sheet assets
RPH 10 PSAK 50 PSAK 55 PSAK 60
Collaborative Learning c
RPH 13 RPH 14 PSAK 18 PSAK 24
Determining the Tax Base
Temporary and Permanent Differences Tax Losses and Tax credit Recognition and Measurement of Current and Deferred Tax
PSAK 46
Collaborative Learning
Analysis of Employee Compensation Pension and Other Postemployment Benefits Share-based Compensation
11
12
Weekly Assignment 8 Submission of Final Assignment Progress Report 2 General Lecturing Learning from the expert: Merger & Acquisition Analysis of Intercorporate investments Basic Corporate Investment Investment in Financial Assets Investment in Associates and Joint Ventures Business Combination Merger and acquisition Analysis of Multinational Operations Foreign Currency Transaction Translation of Foreign Currency Financial Statements Disclosure of hedging strategy for multinational company Other Issues in Multinational Operations
Integration of Financial Statement Analysis Techniques Case Study 1 Case Study 2 Weekly Assignment 9 Submission of Final Assignment Final Report Group presentation Final Assignment Group Presentation Final Assignment
g h g h
RHP 18
Teaching/L earning Methodolo gy
Teaching method uses active lecturing and class discussions, in
which students achieve the study objectives by discussing and completing related cases under the guidance of lecturer. The cases are related to the topics for the session, and can be downloaded from IDX, or from current developing issues. Students must make a group which consists of 3 students. Each group must pick 1 publicly listed company (excluding financial industry) from the beginning of the session, and use that company annual report as a basis for weekly and final assignment throughout the semester. Weekly Assignments Each group will be given assignment based on each topic of the session. The assignment will be given and have to be completed during the session. This weekly assignment should be compiled throughout the semester. At the end of the semester, 7 out of 9 weekly assignments will be regarded as individual assignment. Final Assignment Each group has to write a complete report, which consists of following items: - Summary of financial statement analysis based on weekly assignments - Financial performance comparison with another company in the same industry - 3 years forecasted financial statement, supported with underlying assumptions and analysis - Equity valuation based on companys cash flow - Recommendation (buy/sell/hold) Each group must submit progress report 1 (session 7), progress report 2 (session 10) and final report (session 12). Each group will present the final report during session 13 and 14. Case Study There will be 2 case study discussed during session 12. The case study will be distributed during session 11. Each case study will be assigned randomly to each group. Each case study will be presented by appointed group and the other groups will comment and criticize the presentation. Guest Lecture There will be 2 guest lectures for session 4 (The Use of Financial Statements) and 11 (Mergers & Acquisition).
Assessmen t Method in Alignment with Intended Learning Outcomes
Specific Assessment Methods/Ta sks
Intended Learning Outcomes to be
Assessed A
Continuous Assessment GROUP Case Study 1 (5%) Case Study 2 (5%) Presentation (5%) Final Assignment (20%) INDIVIDUAL Mid Term Exam (30%) Final Term Exam (30%) Individual Assignment (15%)
Details of Learning Methods
% Weighti ng
100% 25%
1 0 %
10 %
20 %
40 %
10 %
10%
75%
40 %
30 %
30 %
The specific learning methods used in this subject are :
1. Lecturing 2. Case-Based Learning In most of sessions uses case-based learning, in which students are divided into groups and discuss the specific cases in group. Each group is responsible for certain topic and the case must be related with the topic of the session. Finally, each group will present the case and discuss with other group facilitated by the lecturer. Result of the presentation and discussion are expected to improve students understanding about the concept and the implementation based on cases. These presentation sessions are also expected to benefit the students to learn the analysis from other groups cases. 3. Collaborative Learning At session 8 until 12 uses collaborative learning with simple jigsaw approaches, in which students are divided into groups and discuss the specific cases in Home Group Discussion (HGD) and Focus Group Discussion (FGD). The cases are divided into several topics for FGD and then all of FGDs topics will be discussed in HGD. In each discussion (FGD and HGD) students will assess their peer in a peer review form. Finally, each group will present the result of discussion with the lecturer as facilitator. Result of
the discussion and presentation are expected to improve
students understanding about the concept and the implementation used on cases. This presentation session are also expected to benefit the students to learn from other focus group discussion.
Student Study Effort Expected
Reading List and References
Class Contact : Lectures Case-Based Learning Collaborative Learning Presentation Other Student Study Effort : Preparation for Project/Assignment/Tests
15 Hours 27 Hours 12 Hours 4 Hours 40 Hours
Required Readings : 1. Robinson, T.R., Henry, E., Pirie, W.L., Broihahn, M.A., and Cope., A.t. (2015). International Financial Statement Analysis, 3rd Edition. New Jersey: John Wiley and Sons (RHP) 2. Standar Akuntansi Keuangan. Ikatan Akuntan Indonesia, 2015. (PSAK) Supplementary Readings : 1. Wild, John J., and K.R. Subramanyan. Financial Statement Analysis, 10th Edition, McGraw-Hill, 2009. (WSH)
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