ELE 3735 Financial accounting
Firms may choose from different accounting languages and dialects in Norway. The main alternatives are GRS (God RegnskapsSkikk = good accounting practice in Norway) and IFRS (International Financial Reporting Standards). Within each of these alternatives there are dialects. All listed companies must apply IFRS, other companies may choose freely between the main alternatives. Some companies may also choose between the dialects. This means that firms may calculate revenue, expenses, assets, liabilities and equity using five different set of rules.
The diversity in how to calculate accounting numbers is a challenge to both preparers and users. Preparers must know which set of rules to apply and how to apply the accounting standards and valuation methods that belong to the chosen set of rules. Users must know how to interpret figures prepared under different set of rules in order to make informed decisions.
The aim of this course is to provide users and prepares with the knowledge that enables them to navigate correctly in an environment with different ways to measure revenue, expenses, assets, liabilities and equity. The course will put particular emphasis on GRS since 99 % of all Norwegian firms use GRS. However, since the largest firms (including listed firms) use IFRS, the course will also cover key differences between GRS and IFRS.
Students should be able to:
- Understand how different languages of accounting (GRS and IFRS) influence how elements in the financial accounts are valued and presented.
- Understand the difference between company accounting and group accounting and how they should be presented in order to be used in decision .making for relevant stakeholders
- Understand how financial accounts can be assess in a quality context
Upon completion of the course, students should be able to:
- Compare and contrast income-based and balance sheet-based accounting models
- Use the fundamental accounting principles (income based and balance sheet based accounting) to find solutions to accounting problems
- Prepare individual accounts for non-listed Norwegian firms using GRS
- Prepare consolidated statements using the purchase method.
- Give example of main differences between GRS and IFRS
Upon completion of the course, students should be able to discuss accounting issues in light of both revenue-based and balance sheet-based accounting models, and analyse the pros and cons of GRS and IFRS.
- The regulation of the obligation to prepare financial statements in Norway
- How to measure net income? Revenue-based and balance sheet-based accounting models, GRS vs. IFRS and accounting models based on fair value and historical cost.
- How should we understand and interpret the fundamental accounting principles in GRS?
- General GRS-rules for recognition and measurement of assets and debt (balance)
- Special issues with GRS, e.g. amortized cost, leasing, pensions, factoring, deferred taxes, employee options and revenue recognition (further information will be given during the course).
- Recognition and measurement according to IFRS, e.g. accounting for investment property, biological assets (e.g. farmed fish and forest) and property, plant and equipment (further information will be given at during the course).
- Group accounting
- Accounting and earnings quality.
The course consists of 40 hours of lectures and assignment reviews. Further information will be given at the start of the course.
It is assumed that students have access to a spreadsheet program and Internett.
For electives re-sit is normally offered at the next scheduled course. If an elective is discontinued or is not initiated in the semester it is offered, re-sit will be offered in the electives ordinary semester.
Higher Education Entrance Qualification
Due to the Covid-19 pandemic, there may be deviations in teaching and learning activities as well as exams, compared with what is described in this course description.
Financial Accounting and Financial Statement Analysis ((BØK 3531 or 3532) or similar.
|Exam category||Weight||Invigilation||Duration||Support materials||Grouping||Comment exam|
Form of assessment:
Internal and external examiner
Examination when next scheduled course
|Form of assessment:||Written submission|
|Support materials:|| |
|Resit:||Examination when next scheduled course|
|Course code||Credit reduction|
|Course code:||BØK 3647|
The course is overlapping with BØK 3647 Financial Accounting, 15 credits which belongs to the specialisation in accounting, offered in the Bachelor programme Business Administration, 3rd year. Students planning to take the specialisation in accounting should therefore not take this course.
Student's own work with learning resources
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.