Financial Accounting

Total Hours in Course162

Number of hours for lectures24

Number of hours for seminars and practical classes24

Independent study hours114

Date of course confirmation16.02.2022

Responsible UnitInstitute of Economics and Finance

Course developer

lect.

Ingrīda Pētersone

Mg. oec.

Course abstract

The study course provides in-depth knowledge of financial accounting methodology theoretical and practical aspects. Students acquire profound knowledge of theoretical, methodological and practical issues of the initial recognition, accounting, valuation and presentation of financial statement items in the financial statements. The skills are obtained by applying opinions of different authors and studying legal and regulatory enactments.

Learning outcomes and their assessment

1. Understanding of the classification, initial recognition, accounting, calculation of depreciation and valuation of long-term investments for a financial statement. Discussion, practical assignments, exam
2. Understanding of the classification, initial recognition, accounting methods, prime cost calculation methods and valuation of current assets for a financial statement. Discussion, practical assignments, exam
3. Understanding of the classification, initial recognition, accounting and valuation of the equity for a financial statement. Discussion, practical assignments, exam
4. Understanding of the classification, initial recognition, accounting and valuation of accounts payable for a financial statement. Discussion, practical assignments, exam
5. Knowledge and understanding of the accounting policy requirements for financial statement items. Independent task, discussion, presentation
6. Ability to independently assess complicated economic transactions and record them consistent with their economic nature. Practical assignments, exam
7. Ability to reasonably explain and discuss profound aspects of financial accounting. Discussion, presentation
8. Ability to calculate the values of financial statement items in the balance sheet and to evaluate gains and losses. Practical assignments, exam
9. Ability to independently acquire the necessary information for the description of accounting policy of a financial statement item. Independent task
10. Ability to responsibly plan the completion of the assignments given. Independent task
11. Ability to develop cooperation and organisational skills. Discussion
12. Ability to present the performed independent task. Independent task, presentation
13. Ability to independently develop an accounting system for a commercial company. Independent task
14. Ability to independently choose and substantiate the most appropriate accounting method for accounting objects. Practical assignments, discussion, exam
15. Ability to evaluate financial statement items in accounting and the financial statement. Practical assignments, discussion, exam
16. Ability to evaluate the accounting system of the item for a commercial company prepared by other students. Independent task, discussion
17. Ability to independently formulate and critically analyse complicated accounting problems and offer solutions to problems. Independent task, discussion, exam

Course Content(Calendar)

1. Types of intangible assets, their accounting, valuation and presentation in the financial statements. (lectures 2 hours, practical work 2 hours)
Nature and recognition criteria, accounting principles and depreciation of intangible assets. Nature, calculation and impairment of goodwill.
2. Types of fixed assets, their accounting, valuation and presentation in the financial statements. (lectures 5 hours, practical work 6 hours)
Nature, types, initial recognition and accounting for items of property, plant and equipment. Alternative methods of accounting and evaluation for animals and plants. Nature and accounting for long - term investments in leased assets. Accounting for the cost of creating fixed assets. Calculation of the cost of fixed assets. Calculation of production costs of fixed assets. Criteria for recognition of fixed assets. Low-value inventory, its nature and basic accounting principles. Accounting for fixed assets after putting them into use for economic activities. Depreciation calculation. Determination of useful life. Determination of liquidation value and its effect on the depreciable value of fixed assets. Fixed asset revaluation requirements, methods and their accounting. Recognition and accounting for long - term investment revaluation reserve. Calculation of depreciation of fixed assets after revaluation, improvement and replacement of parts. Nature, recognition and accounting of impairment of property, plant and equipment. Exclusion of fixed assets. Accounting and recognition in profit or loss of costs associated with the sale of property, plant and equipment. Net asset value. Inventory of fixed assets and organization of accounting in commercial companies. Recognition of property, plant and equipment in the financial statements, information on property, plant and equipment disclosed in the notes. Preparation of long-term investment movement report.
3. Accounting and presentation of long-term financial investments in financial statements. (lectures 4 hours, practical work 2 hours)
Nature, types and accounting requirements for long - term financial investments. Recognition and recognition of dividend income in the income statement. Accounting for interest income and recognition in the income statement. Impairment of long - term financial investments. Presentation of long-term financial investments in the balance sheet and explanations in the notes to the financial statements. Basic principles of preparation of consolidated financial statements. Making consolidation adjustments.
4. Inventory accounting methods, valuation and presentation in financial statements. (lectures 4 hours, practical work 5 hours)
Nature and types of stocks. Determining and accounting for the cost of inventories. Determining and accounting for the cost of production of inventories. Methods for determining the cost of inventories. Inventory accounting methods and requirements. Lowest value principle for inventories, its determination and accounting. Accounting for impairment of inventories in the income statement and balance sheet. Inventory of inventories and presentation of inventory results in accounting records. Recognition of inventories in the financial statements. Information on inventories to be disclosed in the notes to the financial statements.
5. Types of receivables, their accounting and presentation in the financial statements. (lectures 4 hours, practical work 4 hours)
Nature, types and accounting requirements for receivables. Recognition and recognition of discounts granted to customers in the income statement. Recognition and accounting for doubtful and bad debts. Accounting for provisions for doubtful receivables. Calculation of net receivables. Accrued income, its nature, accounting and presentation in the financial statements. Recognition of receivables in the financial statements.
6. Accounting and presentation of equity in the financial statements. (lectures 2 hours, practical work 1 hour)
Nature, composition and accounting requirements for equity. Accounting and conditions for distribution of retained earnings. Dividend accounting. Extraordinary dividends, their nature and accounting. Recognition of equity in the financial statements. Preparation of the statement of changes in equity.
7. Accounting and presentation of provisions in the financial statements. Contingent liabilities and contingent assets. (lecture 1 hour, practical work 1 hour)
Nature and types of savings. Calculation of provisions and recognition criteria. Accrual accounting in accounting. Accounting for reduction of provisions in accounting. Recognition of provisions in the financial statements. Contingent liabilities and contingent assets, their nature and presentation in the financial statements.
8. Types of liabilities, their accounting and presentation in the financial statements. (lecture 1 hour, practical work 2 hours)
Nature and classification of liabilities. Recognition of long - term liabilities in the financial statements. Recognition of current liabilities in the financial statements. Accounting and presentation of trade receivables in currencies. Calculation and accounting of taxes and mandatory state social insurance contributions. Accounting and presentation of payables in the financial statements. Accounting and presentation of payroll taxes in the financial statements. Accounting for other accounts payable. Deferred revenue recognition and presentation in the financial statements. Accrued liabilities, their nature and presentation in the financial statements.
9. Accounting and presentation of grants, subsidies and gifts in the financial statements. (lecture 1 hour, practical work 1 hour)
Accounting for and requirements for grants, subsidies and gifts. Accounting for received financing for the purchase of long - term investments. Calculation of the portion of revenue to be included in profit or loss. Recognition of grants, subsidies and gifts in the balance sheet of the financial statements, profit and loss account and notes to the financial statements.

Requirements for awarding credit points

1. Initial recognition of items in the financial statements, accounting policies and measurement in the financial statements. Evaluation and recording of complex economic transactions according to their economic nature. Practical works, discussion (10%)
2. Development of the accounting system of the financial statement item for the commercial company; examination of the work prepared by another student. Independent work, Presentation, discussion (20%)
3. Valuation and recording of complicated economic transactions in accordance with their economic nature, in the accounting of long-term investments, current assets, equity and creditors. Exam (70%)

Description of the organization and tasks of students’ independent work

Preparation for practical work, exam. Independent work: Development of an accounting system for a financial statement item for a commercial company, presentation and examination of another student's work.

Criteria for Evaluating Learning Outcomes

All work must be completed. Each work is evaluated with a mark. The evaluation of the study course depends on the evaluation of the independent work, presentation, practical work and exam. 10% corresponds to one point on the 10-point assessment scale.

Compulsory reading

1. Elliot B., Elliot J. Financial Accounting, Reporting and Analysis: International Edition Harloww: Prentice Hall, 2006., 696 p.
2. Jaunzeme J., Starptautiskie finanšu pārskatu standarti: standartu apkopojums un pielietojuma piemēri., Rīga: Lietišķās informācijas dienests, 2016., 256 lpp.
3. Kusins J., Zariņa V., Gada pārskats un iepriekšējo periodu kļūdas. Palīglīdzeklis grāmatvežiem., Rīga: Biznesa augstskola Turība, 2016., 352 lpp.
4. Leibus I., Pētersone I., Jesemčika A., Svarinska A., Grigorjeva R. Finanšu grāmatvedība. Rīga: Lietišķās informācijas dienests, 2020., 318 lpp.

Periodicals and other sources

1. Bilance: žurnāls. Pieejams: http://www.plz.lv
2. Ekonomikas ministrijas mājaslapa. Pieejams: http://www.em.gov.lv
3. Finanšu ministrijas mājaslapa. Pieejams: http://www.fm.gov.lv
4. IFinanses: žurnāls. Pieejams: http://www.ifinanses.lv

Notes

Restricted elective study course for the specialisation direction “Financial Management and Accounting” of the academic Master study programme “Economics”

Atsauksmes