MIDLANDS STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING
ACC 252 MODULE OUTLINE
(ACC252)
MODULE TITLE: FINANCIAL ACCOUNTING 11 B(ACC 252)
• Preamble
This is the fourth module of a series of six financial accounting modules presented by
the Department of Accounting. The module is intended to introduce the learner to the
dynamics of group structures and statements of cash flow.
• Module assessment
Continuous assessment (coursework) will contribute 30% to the overall assessment
while the sessional examination will contribute 70% to the overall assessment.
Continuous assessment will be by way of in-class tests.
• Purpose of the module
This module aims at providing thorough knowledge which at the end should enable
students to:
• Develop an understanding of the conceptualframework (2018)
• gain knowledge and understanding of simple group structures
• Determine when control exists or when an investor can consolidate.
• Prepare simple group structures in accordance with the Companies Act
and IFRSs
• acquire a broad understanding of accounting for statements of cash flow
• prepare statements of cash flows
• Module objectives
By the end of the module the students should be able:
• Explain the objective of financial reporting
• Describe and list the qualitative characteristics of useful information
• State and explain the underlying assumption in the preparation of
financial statements
• Define and explain the elements of financial statements
• Discuss the concepts of capital measurement and capital maintenance
• define the various accounting terms in consolidations;
• Distinguish between the types of group structures;
• Differentiate between the previous IAS for consolidation (previous IAS
27) and IFRS10
• Apply the principle of control in consolidation
• explain the 3 elements of control
• Explain the factors considered in determining control
• Define relevant activities and explain how they apply in consolidations
• Define potential voting rights and how they are useful in determining
control
• Assess the relevance of relationship with other parties in determining
control;
• Consolidate a wholly owned and partly owned subsidiary at date of
acquisition (application of IFRS 3);
• Consolidate a wholly-owned partly owned subsidiary after date of
acquisition;
• Consolidate an acquisition of interest during the year ( interim
acquisition)
• Elimination of intercompany transactions ;
• Treatment of dividends during consolidation
• Calculate gains or losses on disposal of an interest;
• Describe the elements of statements of cash flows
• Distinguish between direct and indirect methods of preparing statements
of cash flows.
• Analyse the current statement of comprehensive income and previous
financial statements (statement of financial position and notes)
• Prepare statements of cash flows.;
• Module outline
5.1 Conceptual framework
• Objective of accounting reporting
• Scope of the framework
• Qualitative characteristics of useful information
• Underlying assumptions
• Recognition of elements of financial statements
• Concept of capital and capital maintenance
•
5.2 consolidated financial statements
• Types of groups
• Overview of IFRS 10
• Consolidated financial statements of a wholly owned and partly owned
at the date of acquisition (IFRS 3)
• application of acquisition method.
• Consolidated financial statements of a partly owned and wholly owned
subsidiary after the date of acquisition
• Consolidation of an interest acquired during the year
• Elimination of intercompany transactions
• Treatment of dividends during consolidations;
Calculation of a loss or gain on disposal of an interest;
Application of ethics in consolidated financial statements
• Statements of Company cash flows
• Overview of IAS 7
• Elements of statements of cash flows
• Preparation of statement of cash flows
• accounting ethics in statement of cash flows
6.0 Recommended texts
• Binnekade C Set al- group statements volume 1 current edition
• UNISA module –FCA 2602 (2014)
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