DISCIPLINE SPECIFIC CORE (DSC) COURSES
DSC 1: FINANCIAL ACCOUNTING & ANALYSIS
Course Objectives: To familiarize students with the mechanics of preparation of Financial
Statements; understanding Corporate Financial Statements in the light of IFRS or Indian
Accounting Standards, their analysis and interpretation; understanding of beyond Balance
Sheet indicators to project corporate performance; prediction of financial crisis of a business
enterprise.
Learning Outcomes: Understand the process of recording and classifying business
transactions and events, Creating and understanding Financial Statements of Sole Proprietor,
viz., Profit & Loss Account, Balance Sheet. Understand the financial statements of company
as per IFRS/Ind-AS. Analyse the Financial Statements from the perspective of different
stakeholders using horizontal and vertical analysis tools; and learning to use beyond balance
sheet indicators for analysing corporate performance. Understanding of financial distress or
bankruptcy prediction, introduction to earnings management
Course Contents:
Unit 1 (4 Weeks)
Introduction to Financial Accounting. Basic Concepts and Conventions: Business Entity, Dual
Aspect, Going Concern, Accounting Period, Money Measurement, Accrual, Disclosure,
Materiality, Consistency, and Conservatism. The Accounting Equation. Understanding Assets,
Liabilities, Revenues, and Expenses. Understanding Capital Expenditure, Revenue
Expenditure, Deferred Revenue Expenditure, Capital Receipts, and Revenue Receipts. Nature
of Accounts and Rules of Debit and Credit. Recording transactions in General Journal.
Preparation of Ledger Accounts. Opening and Closing Entries. Preparation of Trial Balance.
Unit 2 (4 Weeks)
Preparation of Financial Statements: Preparing Trading Account, Profit & Loss Account and
Balance Sheet for a Sole Proprietor. Format for preparing financial statements for IND-AS
companies as per Division II, Schedule III, Companies Act, 2013. Understanding of Financial
Statements of a Joint Stock Company as per new accounting standards: IND-AS (Balance
sheet, Profit & Loss, Statement of Comprehensive Income, Cash Flow Statement);
Understanding the contents of a Corporate Annual Report (Actual latest annual reports to be
used).
Unit 3 (3 Weeks)
Global Accounting Standards/IFRS: Meaning & need for globalisation of accounting
standards, Adoption versus Convergence, Needfor convergence of Indian GAAP with IFRS;
Benefits of achieving Convergence with IFRSs to different stakeholders in India. Salient
features of Ind-AS/IFRS (Fair Value Accounting, Substance versus form, Time value of
money). Introduction to Indian Accounting Standards (Ind-AS); Understanding IND-AS 1:
Presentation of Financial Statements, IND-AS 7: Cash Flow Statement, IND-AS 109: Financial
Instruments.
Unit 4 (4 Weeks)
Analysing Financial Statements: Objectives of Financial Statement Analysis; Sources of
information; Standards of Comparison; Techniques of Financial Statement Analysis (Through
a case study of real company) - Ratio analysis, Cash flow analysis, Net working capital
analysis, Trend analysis. Use of ratios to predict financial crisis of a company by using Altman
Z –score. Use of Beyond the Balance Sheet indicators of analysing financial position of a
company. Introduction to Earnings Management.
Essential Readings: Latest editions of the following to be used:
1. Narayanaswamy R. Financial Accounting: A Managerial Perspective. PHI Learning
Private Limited, Delhi.
2. Robert N. Anthony, David F. Hawkins, Kenneth A. Merchant. Accounting- Text and
Cases. McGraw Hill Education (India) Private Limited, New Delhi.
3. Garg CA Kamal, and Sehrawat Neeraj Kumar. Beginner`s Guide to Ind-AS & IFRS.
Bharat Law House Pvt. Ltd., New Delhi.
4. Maheshwari S.N., Maheshwari Suneel K., and Maheshwari Sharad K. An Introduction
to Accountancy. Vikas Publishing House Private Limited, Noida.
Additional Readings: Latest editions of the following to be used:
1. Lal Jawahar. Corporate Financial Reporting: Theory, Practice & Cases. Taxmann
Publications Private Limited.
2. Patricia M. Dechow, Richard G. Sloan and Amy P. Sweeney: Detecting Earning
Management, the Accounting Review. 70, No. 2 (Apr., 1995), pp. 193-225.
Teaching Learning Process:
Class room lectures, Case study discussion, Numerical problem solving, Class presentation on
the assigned topic by students - individually or in groups, Workshops and Tutorials.
Assessment
Total Marks: 100
Internal Assessment: 25 Marks
End Semester University Exam: 75 Marks
The Internal Assessment of the course may include Class participation, Assignments, Class
tests, Projects, Field Work, Presentations, amongst others as decided by the faculty.
Key Words
Generally Accepted Accounting Principles, Financial Statements, Financial Ratios, IFRS,
Indian Accounting Standards.
