The reading assignments listed below are what you should read before coming to class. The class lectures assume this reading has been done, and while you may not completely understand the material you will have a familiarity with the concepts and transactions we will be covering each day. Additional short readings (e.g., recent business press articles) will be distributed in class.
Readings that refer to “Pratt” can be found in the course textbook, J. Pratt, Financial Accounting in an Economic Context, 5th ed., John Wiley & Sons, Inc. Other readings are from the Intel 2002 Annual Report, which is available for download from the website. “CP” stands for the Case Pack of readings that students purchase. (Note that the CP is not available online to OCW users.)
| LEC # | TOPICS | READINGS |
|---|---|---|
| 1 | Overview and Introduction - Setting the Stage and the Course Framework |
Pratt, Chapters 1 & 2. CP: Mueller, Gernon, and Meek. An International Perspective on Financial Accounting. Chapter 1 in Accounting: An International Perspective. 4th ed. Irwin, 1997. Other: Basic Book-keeping, on the course server and distributed with your orientation materials. |
| 2 | Principles of Accrual Accounting | Pratt, Chapters 3 & 4. |
| 3 | Elements of an Annual Report and Financial Ratios |
Pratt, Chapters 3 & 5. Intel 2002 Annual Report |
| 4 | Revenue Recognition and Accounts Receivable |
Pratt, Chapter 6, Review Chapter 3, especially pp. 83-85, “The principles of matching and revenue recognition”, Chapter 4, p. 126 “Unearned (Deferred) Revenues.” Intel: Revenue Recognition, p. 54, and the line “Deferred Income on Shipments to Distributors” in the balance sheet. |
| 5 | Revenue Recognition | CP: Bruns, William J., Jr., and Susan S. Harmeling. Circuit City Stores, Inc (A). Boston, MA: Harvard Business School Publishing, 1993. Case No. 9-191-086. |
| 6 | Accounting for Inventory and COGS |
Pratt, Chapter 7. Intel: pp. 53. CP: Accounting for Manufacturing Companies, Understanding LIFO / FIFO. |
| 7 | The Matching Principle and Long-lived Assets |
Pratt, Chapter 9, Chapter 4 (pp. 118 - 130). Intel: “Property, Plant, and Equipment,” and, “Advertising,” page 53. CP: Wilson, G. Peter. Understanding the Statement of Cash Flows. Boston, MA: Harvard Business School Publishing, 1992. Note No. 9-193-027. |
| 8 | Matching Principle: Property, Plant, and Equipment | CP: Bruns, William J., Jr., and Eric J. Petro. Depreciation at Delta and Pan Am (A). Boston, MA: Harvard Business School Publishing, 1993. Case No. 9-190-035. |
| 9 | The Statement of Cash Flow |
Pratt, Chapter 14. Intel: pp. 47. CP: Wilson, G. Peter. Understanding the Statement of Cash Flows. Boston, MA: Harvard Business School Publishing, 1992. Note No. 9-193-027. |
| Midterm Exam | ||
| 10 |
Accounting for Taxes (This subject can be tough - preparation is essential) |
Pratt, Appendix 10B. Intel: “Provision for Income Taxes”, pp. 62-63. |
| 11 | Marketable Securities and Valuation Adjustments |
Pratt, Chapter 8, through pp. 332. Intel: pp. 50, 58-60. |
| 12 | Current Liabilities and Contingencies and an Introduction to Long-Term Debt |
Pratt, Chapter 10. Intel: pp. 54. CP: Bruns, William J., Jr., and Susan S. Harmeling. Accounting for Frequent Fliers. Boston, MA: Harvard Business School Publishing, 1993. Case No. 9-192-040. |
| 13 | Long-Term Debt |
Pratt, Chapter 11, through pp. 484, Appendix B “The Time Value of Money” (pp. 689+). Intel: pp. 27. |
| 14 | Debt and Valuation |
CP: Barth, Mary E., and Charles A. Nichols III. First National Bank Corp. (A). Boston, MA: Harvard Business School Publishing, 1994. Case No. 9-192-042. Special Note: First National Bank builds on the previous three sessions and you should review the terms and concepts from those sessions. The class preparation questions will guide the case discussion. The economic activity for this session centers on credit analyses related to loans. The accounting decision is determining the allowance for bad debts, a decision that requires considerable judgment. The case refers to numerous users’ decisions that are affected by this accounting decision. |
| 15 | Leases | Pratt, Chapter 11, pp. 484 to end, review Appendix B “The Time Value of Money” (p. 689+). |
| 16 | Stockholders’ Equity |
Pratt, Chapter 12. Intel: pp. 48, 61. |
| 17 | Acquisitions |
Pratt, Chapter 8, pp. 332 to end, Appendix 8A, Appendix 9A. Intel pp. 46, 50-51. |
| 18 | Current Issues in Financial Reporting | |
| 19 | Introduction to FSA |
CP: Matsumoto, Dawn, and Robert Bowen. Microsoft’s Financial Reporting Strategy. Boston, MA: Harvard Business School Publishing, 2000. Case No. 9-100-027. Read In Class: Charan, Ram, and Julie Schlosser. Ten Questions Every Board Member Should Ask . Fortune, October 27, 2003. |
| 20 | Course Review and Wrap-up | |
| Final Exam |
