Financial Accounting

Vrije Universiteit Amsterdam

Course Description

  • Course Name

    Financial Accounting

  • Host University

    Vrije Universiteit Amsterdam

  • Location

    Amsterdam, The Netherlands

  • Area of Study


  • Language Level

    Taught In English

  • Prerequisites

    Accounting I, Accounting II, Accounting, Accounting in Multi-National Enterprises

    Hours & Credits

  • ECTS Credits

  • Recommended U.S. Semester Credits
  • Recommended U.S. Quarter Units
  • Overview

    This course is the third course in the accounting learning line in the bachelor programmes Economics and Business Economics; Business
    Administration and International Business Administration. In this course we focus on external financial reporting, in particular by business
    enterprises. You learn about key issues in financial reporting from the perspective of the reporting company, about the regulatory framework of financial reporting (Bridging theory and Practice - Knowledge). You learn to apply your knowledge to specific issues derived from reporting practice (Bridging Theory and Practice - Application). In doing so, you practice skills such as abstraction and reasoning (Academic and Research Skills).

    After following this course you can:
    - describe and explain the typical features of the regulatory framework of financial reporting in developed economies;
    - describe common accounting practices for a selection of common transactions and events (e.g. income tax, currency translation, intangible assets, investments in subsidiaries) discussed in this course;
    - for the selected transactions and events: solve a given issue in the form of a motivated choice for a specific accounting treatment, journals entries and/or completed financial statements (balance sheet, income statement, cash flow statement);
    - recognize and explain in a given fragment from published financial statements how an item or transaction has been accounted for, or explain the reporting about such accounting in a news media item;
    - use and interpret selected regulatory texts to answer questions about mandatory or optional accounting and reporting practices.

    External financial reporting in the form of annual or quarterly financial statements is the basis of communication between a company and
    financial stakeholders such as shareholders and other investors. Numbers from the financial statements such as profit, cash flow and sales
    revenue play an important role in financial markets. However, they also have legal significance, and are important in corporate governance. For larger enterprises, preparing financial statements is a complex process. This is not just because it is a challenge to properly represent the performance and economic position of complex businesses, but also because there are significant interests at stake. Financial reporting can go spectacularly wrong, as evidenced by major accounting scandals that happen from time to time. For that reason, an elaborate institutional framework of regulations and standards, audit, supervision and enforcement has been built up around the practice of financial reporting. This framework consists both of national elements (such as company law) and international elements (such as International Financial Reporting Standards).

    In this course, you do not just develop your technical 'how' skills (e.g. preparing consolidated financial statements, or working out the
    effects of currency translation on reported numbers) but you also train yourself to ask the 'why' question. Why does it matter to this company to account for this transaction in this way? Is there a rule that must be followed? Or does it have a choice? Who decides? Why is the rule the way it is? Could it be improved?
    Not everybody finds it easy to switch between accounting technique and the wider context of standards, governance and economic interests in which this technique is applied, but it is an essential skill for everybody who works in a professional way with financial reporting,
    whether as controller, auditor, financial analyst, manager, investor, or supervisor. The fact that accounting always plays out in this wider
    context is what makes financial reporting a fascinating discipline with a unique character.

    Plenary lectures and tutorials.

    Written exam (individual assessment), optional interim exam (individual assessment)

Course Disclaimer

Courses and course hours of instruction are subject to change.

Some courses may require additional fees.


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