THE CHINESE UNIVERSITY OF HONG KONG

SCHOOL OF ACCOUNTANCY

ACCT 4111
ADVANCED FINANCIAL ACCOUNTING
SESSIONS A AND B
(FIRST SEMESTER, 2014 - 2015)

LECTURER
Mr. Eric LEUNG
Office:
Phone:
E-mail:
Office hour:

Room 1039, 10/F., Cheng Yu Tung Building (CYT)

3943-1693
eric_leung@cuhk.edu.hk
Friday 11:30 13:15; or by appointment

TEACHING ASSISTANT
Miss TSANG Pui Ki
Office:
Room 1049, 10/F., Cheng Yu Tung Building (CYT)
Phone:
3943-7644
E-mail:
adatsang@ baf.cuhk.edu.hk

COURSE OBJECTIVES
This course is a continuation of financial reporting and deals with the more advanced aspects of
financial accounting. The course assumes knowledge acquired in previous financial reporting courses
and thereby focuses on the exploration of the core technical capabilities to prepare and analyse financial
reports for combined entities which takes the subject into greater depth and contextualises the role of
accountant as a professional financial adviser by examining the group reporting requirements as well as
the rationales behind various accounting principles and standards relating to group reporting.
This course attempts to investigate issues relating to group reporting and therefore includes such topics
as business combinations, consolidations of subsidiaries, intragroup transactions and foreign currency
translations. Special problems in the consolidation of corporate financial statements will also be covered
in the course.
The objectives of the course are to:
(1) introduce the working knowledge of business combinations and group reporting under the
international accounting context and the Hong Kong accounting reporting environment;
(2) equip students with the ability to prepare financial statements of groups of entities in accordance
with relevant accounting standards;
(3) strengthen students ability to apply accounting and financial reporting knowledge in business
decision-making;
(4) equip students with a global perspective associated with accounting;
(5) strengthen students written communication skills by providing professional advices to solve
problems relating to group accounting.
Prerequisite: ACCT 3112 Financial Reporting II

COURSE LEARNING OUTCOMES (CLO)

After completing this course, students should be able to:
(CLO 1)
understand the financial reporting requirements of business combinations and group
reporting under the international accounting context and the Hong Kong accounting
reporting environment;
(CLO 2)
compile group financial statements in accordance with relevant accounting standards;
(CLO 3)
apply accounting and financial reporting knowledge, in particular group reporting issues, in
business decision-making;
(CLO 4)
demonstrate an understanding of business and accounting issues from a global perspective,
in particular entities with overseas operations;
(CLO 5)
demonstrate effective written communication skills.
The following table shows an alignment of the above course learning outcomes (CLO) with the PACC
programme learning outcomes (LO):
LO
CLO
(LO 1)
Have effective communication skills needed by accounting professionals.
CLO 5
(LO 2)
Be able to master the accounting knowledge.
CLO 1 & 2
(LO 3)
Be able to analyse and solve business problems using accounting, financial
CLO 3
and other business information.
(LO 4)
Have a global perspective associated with accounting.
CLO 4
(LO 5)
Be aware of the ethical issues in relation to business and accounting practices.
CLO 3

LEARNING ACTIVITIES
To ensure that students are able to develop and achieve the above outcomes, the course is structured
with the following learning activities:
(1) Lectures
A weekly three-hour lecture is scheduled. During the lecture, fundamental concepts relating to a
specific topic relating to group accounting (see the section headed List of Topics and Class
Schedule below) will be delivered by teacher. (Major focus: CLO 1, 2, 3, 4)
(2) In-class discussion
Several case problems will be distributed in class. Students are expected to discuss within their own
groups to come up with the solutions. This not only facilitates the application of the concepts
discussed in lectures but also assists students to get prepared for their examinations. (Major focus:
CLO 1, 2, 3)
(3) Self-reading
Reading is critical in the course. Relevant reading materials will be stipulated in the weekly lecture
notes. Students are expected to read the relevant materials and do their own readings after class to
further consolidate their understanding of the topic. (Major focus: CLO 2, 3, 4)
(4) Practice problems
A number of additional practice problems will be regularly posted on the eLearning platform for
students practice. Knowledge in financial reporting can partially be polished through practicing.
Students are expected to discuss among themselves on the practice problems. Check figures will be
posted on the eLearning platform for students reference. (Major focus: CLO 2, 3, 4)
(5) Case studies
Two case studies consisting of problems and report writing will be distributed to students
throughout the semester. Students are expected to (1) analyse and solve business problems in an
accounting context and (2) work on their own pace to check whether they are able to tackle the

selected problems. Solutions will be posted on the eLearning platform after submission of case
studies. (Major focus: CLO 1, 2, 3, 5)
Lectures and In-class
discussion
In-class
3 hours / week
Mandatory

Self-reading

Case studies

Practice problems

Out of class
6 hours / week
Mandatory

Out of class
1 2 hours / week
Mandatory

Out of class
1 2 hours / week
Mandatory

COURSE ASSESSMENT
Course grade will be based on the following elements:
Test
Comprehensive case examination
Case studies
Total

30%
50%
20%
100%

LEARNING RESOURCES FOR STUDENTS

Picker, Leo, Loftus, Wise, Clark and Alfredson, Applying Financial Reporting Standards, Wiley, 3rd
edition, 2012.
Tan, Lim and Lee, Advanced Financial Accounting An IAS and IFRS Approach, McGraw Hill, 2nd
edition, 2014.
Students may refer to the following materials for reference:
Relevant Hong Kong Accounting Standards and Financial Reporting Standards issued by the
HKICPA, accessible online via the HKICPA website: http://www.hkicpa.org.hk
Ernst & Young, International GAAP 2014 Generally Accepted Accounting Practice Under
International Financial Reporting Standards, Wiley, 2014.

TEST AND EXAMINATION

A mid-term test (closed-book) is scheduled on 24 October 2014 (Friday) and will cover topics discussed
from Weeks 1 to 6. The mid-term test will start at 6:40 p.m. and last for 2 hours and 15 minutes. Details
of the mid-term test will be announced in class.
A comprehensive case examination (closed-book) will be arranged by the University and will be
conducted during the centralised examination period. The final examination will last for 3 hours.
Details of final examination will be announced in class.

CASE STUDIES
Students will be given two case studies throughout the course and they are strongly advised to complete
the case studies individually. This is an effective means in letting students and teacher know whether
the concepts delivered during the lectures are properly mastered.

COURSE ANNOUNCEMENTS
Lecture materials and announcements will be posted on the eLearning platform:
https://elearn.cuhk.edu.hk/webapps/portal/frameset.jsp

POLICY ON SCHOLASTIC DISHONESTY

The Chinese University of Hong Kong places very high importance on honesty in academic work
submitted by students, and adopts a policy of zero tolerance on cheating and plagiarism. Any related
offence will lead to disciplinary action including termination of studies at the University. Attention is
drawn to University policy and regulations on honesty in academic work, and to the disciplinary
guidelines and procedures applicable to breaches of such policy and regulations.
Details may be found at: http://www.cuhk.edu.hk/policy/academichonesty/.

FEEDBACK FOR EVALUATION

Students are encouraged to provide feedback on the course. Feedback can be sent to the instructor
through either email or message system in the eLearning platform at any time or made an appointment
with the instructor. Formal teaching evaluation exercise will also be performed at the end of the
semester.

LIST OF TOPICS AND CLASS SCHEDULE

Week

Session
A
(F1-3)

5-Sept

12-Sept

8-Sept

19-Sept

15-Sept

26-Sept

22-Sept

29-Sept

29-Sept

CYT LT1
(18:30)

10-Oct

17-Oct

24-Oct

Session
B
(M1-3)
4-Sept

Topics

Readings

Business Combinations I: Basic Concepts

Wiley Chapter 14;

McGraw Hill Chapter 3

Business Combinations II: Advanced Applications for HKFRS

3 (Revised)
Business Combinations III: Special Topics on HKFRS 3 (Revised)
Group Reporting I: Control Concepts (HKFRS 10)
Group Reporting II: Consolidation Method and Wholly-owned
Subsidiary (Part 1)

Wiley Chapter 14;

McGraw Hill Chapter 3
Wiley Chapter 23
McGraw Hill Chapter 5
Wiley Chapters 23 and 24;
McGraw Hill Chapters 3, 4 and 5

CYT LT1
(18:30)

Group Reporting II: Consolidation Method and Wholly-owned

Subsidiary (Part 2)

Wiley Chapters 23 and 24;

McGraw Hill Chapters 3, 4 and 5

6-Oct

Group Reporting III: Non-controlling Interests

Wiley Chapter 26;

McGraw Hill Chapters 3, 4 and 5

AIT G03
(18:30)

Group Reporting IV: Intra-group Transactions

Wiley Chapter 25;

McGraw Hill Chapters 3, 4 and 5

20-Oct

Investments in Associates I

Wiley Chapter 29;

McGraw Hill Chapter 6

LT7
(18:30)

13-Oct

24-Oct
9

31-Oct

27-Oct

10

7-Nov

3-Nov

11

14-Nov

10-Nov

12

21-Nov

17-Nov

13

28-Nov

24-Nov

Midterm Examination LSB LT1 (Up to Non-controlling Interests)

Wiley Chapter 29;
Investments in Associates II
McGraw Hill Chapter 6
Wiley Chapter 28;
Foreign Currency Transactions
McGraw Hill Chapter 8
Wiley Chapter 28;
Group Reporting V: Foreign Subsidiary Translation
McGraw Hill Chapter 8
Wiley Chapter 28;
Group Reporting VI: Foreign Subsidiary Consolidation
McGraw Hill Chapter 8
Group Reporting VII: Changes in Ownership Structure
Wiley Chapter 27; McGraw Hill Chapter 7
Joint Arrangements
Wiley Chapter 30

The class schedule is subject to changes. The reading lists are not exhaustive. Additional readings may be assigned for reference throughout the semester.