London School of Economics and Political Science (LSE)

Modules

91
Financial reporting

Prerequisite – 19 Elements of accounting and finance

The rationale for financial reporting. Arguments for and against regulation of financial reporting. Methods or regulation, including standarisation of accounting practices. The nature and purposes of a conceptual framework for financial reporting: the objectives of financial reporting; the qualitative characteristics of accounting information; the definitions of an asset and a liability; recognition and measurement in financial statements; international framework. Economic and accounting concepts of income, capital and value with particular reference to Hicks’ income concepts.

Strengths and weaknesses of historical cost accounting. Bases of asset valuation. Capital maintenance concepts. Current purchasing power accounting. Current value accounting systems, including combined current value/current purchasing power accounting.

Accounting for investments and groups of companies. The merger and acquisition methods. Associated companies and joint ventures. Accounting for foreign currency transactions, foreign subsidiaries and branches: the temporal and closing rate/net investment methods of foreign currency translation.

Accounting for tangible and intangible assets: fixed assets and depreciation; stocks and long term contracts; research and development; goodwill. Accounting for leases. Accounting for liabilities. Accounting for taxation, including deferred taxation.

Analysis and interpretation of corporate financial reports; introduction to international differences in financial reporting.