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Financial Statements

Course developer

Prior knowledge

Ekon4102, Financial Accounting

Course abstract

The study course provides knowledge and practical skills for preparing a quality financial report. The course program includes the basic principles for the preparation of a quality financial statement, methods of preparation of accounts, valuation requirements for balance sheet items and disclosure of information in the appendix, preparation of a profit and loss statement, a statement of changes in equity and a cash flow statement.

Learning outcomes and their assessment

1. Demonstrate the knowledge of basic requirements for producing financial reports, name and describe every component of a financial report - Group work, discussions in classes
2. Demonstrate the knowledge of basic requirements for and components of a financial report and inventory of accounting accounts - Test
3. Demonstrate the knowledge of basic requirements for producing financial reports and the effects of complicated situations on the items of a financial report - Examination
4. Demonstrate a reasoned understanding of the layout of and the content of the appendix of a financial report - Independent work
5. Reasonably explain and discuss the basic requirements for producing financial reports - Discussions in classes
6. Produce financial reports and analyse the effects of some situations on the financial reports - Test with calculations
7. Produce financial reports from the data given - Group work
8. Responsible plan the completion of the assignments given - Independent work
9. Engage in and assume responsibility for group work and analyse the results of the work - Group work, a summary
10. Independently produce financial reports for an enterprise, understand the basic requirements for producing financial reports - Practical assignments
11. Analyse the situation and justify decisions and, if necessary, make corrections in the report - Tests, practical assignments
12. Independently produce financial reports for an enterprise form the data given - Examination

Course Content(Calendar)

1. Composition of the financial report and regulatory framework for its preparation in Latvia (lecture 2 hour, practical work 1 hour)
2. Basic principles and qualitative characteristics of preparation of financial statements (lecture 2 hour, practical work 1 hour)
3. Financial report preparation process in the company (lecture 1 hour, practical work 1 hour)
4. Inventory of long-term investment and working capital accounts (lecture 2 hour, practical work 4 hours)
5. Inventory of equity and liability balances (lecture 1 hour, practical work 4 hours)
6. Events after the balance sheet date, their impact on the financial statements (lecture 1 hour, practical work 2 hours)
7. Asset impairment testing and accounting (lecture 1 hour, practical work 2 hours)
8. Change in accounting policies, accounting estimates and correction of errors in the financial statements (lecture 2 hour, practical work 4 hours)
9. Test “Basic requirements for preparation of financial statements and inventories of accounting accounts” (practical work 2 hours)
10. Significance of profit or loss statement and preparation requirements (lecture 2 hours, practical work 1 hour)
11. Preparation of a profit or loss statement by classifying costs by type of costs (lecture 1 hour, practical work 2 hours)
12. Preparation of profit or loss statement by classifying costs by cost function (lecture 1 hour, practical work 2 hours)
13. Nature and significance of balance sheet for users of financial statements (lecture 1 hour, practical work 1 hour)
14. Information to be included in balance sheet items from the company's accounting accounts. Balance sheet preparation (lecture 1 hour, practical work 4 hours)
15. Nature and significance of cash flow statement for users of financial statements (lecture 1 hour, practical work 1 hour)
16. Preparation of cash flow statement from accounting information by direct method (lecture 1 hour, practical work 2 hours)
17. Preparation of cash flows from operating activities according to the indirect method (lecture 2 hours, practical work 3 hours)
18. Preparation of the statement of changes in equity (lecture 1 hour, practical work 2 hours)
19. Nature and significance of the notes to the financial statements for the users of the financial statements (lecture 1 hour, practical work 1 hour)

Requirements for awarding credit points

During the course the student must pass a test on the basic requirements of financial reporting.
During the study course the student has to prepare independent work on the appendix to the financial statement.
At the end of the course, you must pass an exam in financial reporting.

Description of the organization and tasks of students’ independent work

To master and strengthen theory questions by studying literature and solving tasks. Prepare for the exam and test. Prepare independent work on the contents of the notes to the financial statements.

Criteria for Evaluating Learning Outcomes

1. Examination of the Balance Sheet, Income Statement, Statement of Changes in Equity and Cash Flow Statement - 40 %
2. Test on the basic requirements of preparation of financial statements and inventory of accounting accounts - 40 %
3. Independent work for preparation of financial statement annex - 20 %
Independent work, tests and examinations are evaluated according to the pre-defined assessment procedure.
The overall assessment of the study course depends on the assessment of the test, examination and independent work.
10 % are equal to one point on a 10 point marking scale

Compulsory reading

1. Finanšu grāmatvedība. I. Leibus, I. Pētersone, A. Jesemčika, A. Svarinska, R. Grigorjeva. Rīga: Lietišķās informācijas dienests, 2020. 318 lpp.
2. Apsīte I. Uzņēmuma gada pārskats. Sigulda: Lietišķās apmācības centrs, 2009. 267 lpp.
3. Bojarenko J., Beļavska L., Tjurina A. Finanšu grāmatvedība: teorija un prakse. I daļa. Rīga: KIF Biznesa komplekss, 2009. 268 lpp.
4. Bojarenko J., Tjurina A., Ķūda M., Pokromoviča I., Jespere I. Finanšu grāmatvedība: teorija un prakse. II daļa. Rīga: KIF Biznesa komplekss, 2009. 292 lpp.

Further reading

1. Liepiņa I. Gada pārskata sagatavošanas rokasgrāmata. Rīga: LZRAIC, 2010. 119 lpp.
2. Ludboržs A. Finanšu grāmatvedība tirdzniecībā. Rīga: Lietišķas informācijas dienests, 2003. 282 lpp.
3. Jaunzeme J. Starptautiskie finanšu pārskatu standarti: standartu apkopojums un pielietojuma piemēri. Rīga: Lietišķās informācijas dienests, 2016. 152 lpp.
1. Apsīte I. Uzņēmuma gada pārskats. Sigulda: Lietišķās apmācības centrs, 2012. 296 lpp. .
4. Zaiceva J. Uzņēmuma gada pārskats – sastādīšanas noteikumi un metodika. Rīga: Beno Prese, 2003. 176 lpp.
5. Kelmere L. Kapitālsabiedrības likvidācijas process un finanšu pārskatu sagatavošana. Rīga: LU Akadēmiskais apgāds, 2017. 168 lpp.
6. Mālderis G. Inventarizācijas. Rīga: Biznesa augstskola Turība, 2005. 80 lpp.
7. Januška M. Finansu un grāmatvedības kontrole firmā: Praktiskas rekomendācijas uzņēmējiem. Rīga: Merkūrijs LAT, 2002. 144 lpp.
8. Starptautiski grāmatvedības standarti 2000. Rīga: Starptautisko grāmatvedības standartu komiteja, 2000. 1025 lpp.
9. Elliot B., Elliot J. Financial Accounting, Reporting and Analysis: International Edition. 2nd ed. London: Prentice Hall, 2006. 696 p.
10. Harrison W. T., Horngren C. T. Financial Accounting. 6th ed. New Jersey: Prentice Hall, 2005. 720 p.
11. Starptautiskie finanšu pārskatu standarti [tiešsaiste]. Pieejams: https://eur-lex.europa.eu/legal-content/LV/TXT/?uri=CELEX:02008R1126-20190101
12. Par grāmatvedību: LR likums [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/66460-par-gramatvedibu
13. Noteikumi par grāmatvedības kārtošanu un organizāciju: LR MK noteikumi Nr. 585 [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/80418-noteikumi-par-gramatvedibas-kartosanu-un-organizaciju
14. Gada pārskatu un kosolidēto gada pārskatu likums: LR likums [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/277779-gada-parskatu-un-konsolideto-gada-parskatu-likums
15. Gada pārskatu un konsolidēto gada pārskatu likuma piemērošanas noteikumi: LR MK noteikumi Nr.775 [tiešsaiste]. Pieejams: https://likumi.lv/ta/id/278844-gada-parskatu-un-konsolideto-gada-parskatu-likuma-piemerosanas-noteikumi
16. Noteikumi par sabiedrību sagatavoto finanšu pārskatu vai konsolidēto finanšu pārskatu elektroniskā noraksta formu: LR MK noteikumi Nr. 399 [tiešsaiste] Pieejams: https://likumi.lv/ta/id/283109-noteikumi-par-sabiedribu-sagatavoto-finansu-parskatu-vai-konsolideto-finansu-parskatu-elektroniska-noraksta-formu

Periodicals and other sources

1. Bilance Rīga: Lietišķās informācijas dienests. ISSN 1407-5709
2. iFinanses.lv Rīga: Izdevniecība iŽurnāli, Elektronisks žurnāls. Pieejams: https://ifinanses.lv
3. Bilance plz.lv Rīga: Lietišķās informācijas dienests, Elektronisks žurnāls. Pieejams: https://www.plz.lv

Notes

Restricted elective course for the academic Bachelor’s study programme “Economics” of the Faculty of Economics and Social Development, Accounting and Finance specialisation