AC102      Half Unit
Elements of Financial Accounting

This information is for the 2025/26 session.

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This  half-unit course introduces students to the fundamental principles of financial accounting. The course focuses on accounting from the viewpoint of users of financial information.  By adopting the "user perspective," the course examines the potential uses and limitations of financial reporting information, which requires an understanding of how the financial reports are prepared. The course begins by discussing the framework of financial accounting, including its nature, intents and purposes, and the regulatory environment in which it operates. In the first weeks of the course, students learn about the processes used to record, summarise, and present financial accounting information, while addressing the limitations and potential biases in financial reporting. These include the use of estimates and assumptions, the impact of management choices on reported results, and the potential for earnings management. By understanding these limitations, students develop the ability to critically assess the reliability and usefulness of financial information. As the course progresses, students become familiar with the main financial statements, including the balance sheet, the income statement, and the statement of cash flows. In addition to understanding the preparation of financial statements, the course develops students' skills in analysing and interpreting financial information. This includes learning various financial analysis techniques, such as ratio analysis, trend analysis, and common-size analysis, which help in evaluating a company's financial health, operational efficiency, and future prospects. Towards the end of the course, students learn the key principles involved in preparing consolidated financial statements for a group of companies.

20 hours of lectures and 10 hours of classes in the Autumn Term.

Written answers to numerical problems and discussion questions will be expected weekly. The course also involves two formative assessments.

Detailed reading lists will be made available at the beginning of the course. Illustrative texts include Peter Atrill and Eddie McLaney Financial Accounting for Decision Makers, 10th ed, Pearson, 2022.

Exam (100%), duration: 120 Minutes, reading time: 15 minutes in the January exam period

The exam duration is 2 hours. The first 15 minutes will be reading time.