APPLIES TO ACADEMIC YEAR 2014/2015

BØK 3421 Finance and Managerial Accounting II

Responsible for the course
Rolf Gunnar Strand, Knut Larsen

Department
Department of Accounting - Auditing and Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
The essence of business economics includes financial management (=income and cost analysis, managerial accounting, budgeting and control), finance (=investment and financing), financial accounting and financial statement analysis. Good knowledge within these areas is a necessary prerequisite to understand the economic content of transactions, obtain decision-relevant information, discuss and assess alternatives, make correct decisions and convey relevant and useful information.

The aim of the first two courses within the field of business economics - Finance and Financial Management I and II - is to provide the students with essential basic knowledge and skills, so that they can take part in discussions on problems in business economics and carry out simple analyses within the field, make correct decisions and communicate the results of the analyses in a comprehensible manner.

Finance and Managerial Accounting II builds on Finance and Managerial Accounting I. The aim of the course is to give the students further knowledge and understanding of important methods, techniques and theories for investment decisions and in managing commercial enterprises. The course consists of three subject areas. The finance area focuses on how uncertainty affects decisions on the basis of which investments should be made (the risk and return on individual projects and portfolios) and owners’, creditors’ and companies’ capital costs. The managerial accounting model area includes cost estimates and actual cost calculations on a unit level, performance reports for the whole company and for various levels, as well as budget supervision/variance analysis for costs, revenues and result. The special decision-making problems area focuses on how optimal decision-making is related to the concrete situation of the company.

Learning outcome
Acquired knowledge
After taking the course, the students shall be able to explain key concepts and give an account of important tools used in analyses of business economics problems (tools include connections, methods, techniques, models, theories, etc. applied in the subject area).

• Examples of concepts that students shall be able to explain: variance, standard deviation, expectation, efficient portfolios, risk aversion, bonds, market efficiency, risk premium, free capacity
• Examples from the toolbox: capital asset pricing model, portfolio theory, cost estimates, actual cost calculations, variance analysis

• When the tool is given, be able to apply the tool correctly
• Based on simple situation descriptions, choose the right tools and apply them correctly
• Based on more complex situation descriptions, be able to produce relevant information, link it to the suitable tool and apply the tool correctly.

• Traditional models of calculation and managerial accounting
• Normal costing and normal cost accounts
• Standard costing and standard cost accounts
• Contribution margin and full costing
• Cost estimates and ex post costing
• Budget supervision
• Variance analysis for costs and revenues

• Decision-relevant costs and income
• Product mix with scarce resources

• More on project analysis
• Introduction to uncertainty
• Relevant risk and portfolio theory
• Cost of capital and risk
• Financing
• Follow-up and control