Faculty of Economics, Banja Luka

Financial Reporting and Controlling

Instructor: , ,

The course has two general parts. The first part aims to increase the students’ knowledge and understanding of the process of preparation and presenting financial statements. To achieve that, students will become familiar with the basic principles and framework of financial reporting. Through case studies, the ways in which balance sheet elements and performance are recognized and measured in financial statements will be presented, with special reference to the accounting of specific transactions. For the purposes of business decision-making, the analysis of financial reports will be processed through ratio indicators and trend analysis. The aforementioned analysis requires knowledge of the accounting policies that have been selected for the preparation of financial statements, but also knowledge of the branch and environment in which the company operates. The mentioned topics will be covered through case studies. As the company's operations are often exposed to price changes and inflation, special attention will be paid to the analysis of performance under the conditions of changes in the purchasing power of money.
In the second part of the course, the attention will be directed on integrating financial and non-financial measures of business success. For that purpose, balanced scorecard will be presented, with special attention given to environmental and social performance considerations. As a part of the strategic analysis, specific factors influencing the changes in operating income (such as growth component, productivity component and price recovery component) will be considered. Special attention will be given to the customer profitability analysis, performed on activity based costing approach, aiming to achieve adequate customer relations management and customer portfolio. Finally, cost management concepts and accounting support to implementing them will be presented. This will be done through identifying and achieving target cost of the product/service by applying different kind of cost reduction techniques. In order to present accounting support to the customer focus philosophy, cost of quality reports and reports on customer response time will be introduced.
The teaching & learning practices of the course combine the analyses of theoretical concepts with the discussion of case studies in order to also assist students to develop their skills and competencies to prepare, present and analyze financial statements.

Code :	2I14IFRC
Status:	E
Semestar:	9th
Number of classes per week:	2+2
ЕECTS:	5
Teachers:	Предраг Гајић, PhD Full Professor Јелена Пољашевић, PhD Full Professor Бобана Чегар, PhD Assistant Professor
Prerequisites:	No
Learning Outcomes (gained knowledge):	Upon the completion of this course, the students should be able to: Discuss and apply conceptual and regulatory frameworks for financial reporting Demonstrate knowledge to account for transactions in accordance with IFRS/IAS Analyse and interpret financial statements. Prepare and present financial statements for single entities in accordance with IFRS® Accounting Standards Demonstrate knowledge to price change accounting influenced by inflation Understand why companies use both financial and non-financial measures of business performance Explain the four perspectives of the balanced scorecard and select measures for each perspective Identify and analyze causes of changes in operating income to evaluate strategy Prepare customer-profitability reports to highlight differences across customers in their profitability Price products using the target costing approach Identify and apply appropriate techniques to achieve target costs Explain four cost categories in a cost of quality programme and prepare cost of quality reports Identify the relevant costs and benefits of quality improvements Describe customer-response time and on-time performance and how accounting facilitates time management
Subject Contents:	The conceptual and regulatory framework for financial reporting The need for a conceptual framework and the characteristics of useful information Recognition and measurement Regulatory framework The concepts and principles of groups and consolidated financial statements Accounting for transactions in financial statements Tangible non-current assets Intangible assets Impairment of assets Inventories and agriculture Financial instruments Leasing Shareholders capital Liabilities and Provisions Taxation Reporting financial performance Revenue Government grants Foreign currency transactions Analysing and interpreting the financial statements of single entities Limitations of financial statements Calculation and interpretation of accounting ratios and trends to address users’ and stakeholders’ needs Limitations of interpretation techniques Preparation of single entity financial statements Accounting and price change Accoutning for price shange Current cost accounting Beyond current cost accounting Balanced scorecard - Integrating financial and non-financial performance measurement Perspectives of the balanced scorecard Selections of measures in applying the balanced scorecard Strategy maps and the influence of different strategies to balanced scorecard content Environmental and social performance and the balanced scorecard Features of a good balanced scorecard and pitfalls in implementing a balanced scorecard Strategic analysis of changes in operating income Growth Component of Change in Operating Income Price-Recovery Component of Change in Operating Income Productivity Component of Change in Operating Income Further Analysis of Growth, Price-Recovery, and Productivity Components Customer profitability analysis Customer characteristics Calculation assumptions for calculating profitability Customer profitability analysis in current period Life cycle customer profitability analysis Target costing for target pricing Prerequisites in applying target pricing Identifying target costs and target cost calculation methods Methodology of applying the concept of target costs Approaches in reducing costs to the target level Advantages and potential pitfalls in implementing target costing Accounting reports on quality management achievement Quality as a competitive tool The Financial Perspective: The Costs of Quality report The Customer Perspective: Nonfinancial Measures of Customer Satisfaction The Internal-Business-Process Perspective: Analyzing Quality Problems and Improving Quality The Learning-and-Growth Perspective: Quality Improvements Accounting reports on time management achievement Time as a Competitive Tool Customer-Response Time and On-Time Performance Bottlenecks and Time Drivers Relevant Revenues and Costs of Delays Balanced Scorecard and Time-Based Measures
Teaching Methods and Learning Activities:	This course will be delivered by means of lectures and case studies workshops. Theoretical issues will be introduced during the lectures, which in turn will constitute the basis for the case studies workshops and classroom discussions. Handouts indicating detailed learning outcomes and content of the lectures and case studies workshops as well as recommended reading will be distributed during the lectures. The case studies workshops will focus on developing conceptual, managerial and analytical skills through practical activities to be conducted online and offline. There will be ample opportunity to ask questions. Lectures, examination of real-life case studies, structured debates amongst teams of students, critical reviews of selected firms’ examples. Teaching aids: use of multimedia projector, distribution of lecturer’s notes, lectures’ handouts and printed educational material.
Literature:	Compulsory and recommended REQUIRED READINGS (recommended course textbook): Richard Lewis and David Pendrill (2004). Advanced financial accounting, Prentice Hall, Financial Times, Harve Stolowy, Mishel J. Lebas, Yuan Ding (2013). Financial accounting and reporting: A global perspective, Cengage Learing, Datar Srikant M. and Madhav Rajan (2018). Horngren’s Cost Accounting – a managerial emphasis, 16th edition, Pearson education. ADDITIONAL READING: Martin Fridson, Ferrnando Alvarez (2002). Financial Statements analysis, a practitioners guide, Wiley finance, CASE STUDIES PROVIDED BY THE PROFESSOR DURING THE LECTURES
Types of Assessment for the subject:	Class participation (0-10 points); Essay or test (0-30 points); Final exam (0-50 points); Discussion contribution in class (0-10 points)
Special Remarks for the subject:

SUBJECTS

Financial Reporting and Controlling

Notice Board

Exam Results

Files from lectures and exercises