Module Information

Module Identifier
Module Title
Financial Accounting 3
Academic Year
Semester 2 (Taught over 2 semesters)
Other Staff

Course Delivery

Delivery Type Delivery length / details
Lecture Three hours of lecture sessions per week [being two hours of lectures per week, plus one hour of help class per week]
Seminars / Tutorials Eight example/tutorial classes over the module


Assessment Type Assessment length / details Proportion
Semester Exam 2 Hours   Unseen written examination  80%
Semester Assessment Class Test  20%
Supplementary Exam 2 Hours   Unseen written examination  Repeat failed element  80%
Supplementary Assessment Test  Repeat failed element  20%

Learning Outcomes

On successful completion of this module students should be able to:

* Describe and explain the need for and uses of accounting for business combinations, and compare and contrast the alternative methods/approaches to group accounting.

* Describe and explain the importance of fair valuation and the treatment of goodwill in group accounting.

* Prepare consolidated accounts under acquisition accounting (including accounting for associated undertakings); and compare acquisition with merger accounting techniques.

* Explain, discuss, evaluate and calculate the presentation in and impact upon (group) accounts of the following, with a comparison of latest versus previous treatment where pertinent for foreign currency translation.

* Explain and discuss the conceptual framework upon reporting financial performance as it pertains to group accounting and foreign currency translation.

* Explain, discuss and contrast the accountability, governance, stewardship, and financial regulation in the public and not-for profit sector.


This module is a core module to the School of Management and Business N400 (Accounting and Finance) degree scheme; it is also core to the Accounting and Finance major and available as an elective for the Accounting and Finance minor. Students taking the School N310 (Business and Finance) can choose to take this as an option in their 3rd year

The module covers three main topic areas namely group accounting, foreign currency translation and deferred taxation, which are essential subject matter within any high-quality undergraduate degree in accounting and/or finance; and which are expected by:

  • Honours Degree Subject Benchmark Statement: Accounting (2007), Quality Assurance Agency for Higher Education
  • Honours Degree Subject Benchmark Statement: Finance (2007), Quality Assurance Agency for Higher Education
Further, the module contributes to the maintenance of (or is anticipated to contribute to the achievement of [further]) accreditation from professional accountancy bodies, including:

  • Institute of Chartered Accountants in England and Wales
  • Association of Chartered Certified Accountants
  • Chartered Institute of Management Accountants
  • Institute of Chartered Accountants of Scotland

Brief description

The majority of large business organisations comprise of a number of companies under common ownership, i.e. are groups of companies. In reporting on the activities, position and performance of such organisations, combination of the financial reports of the individual group companies is necessary. This module introduces the conceptual and regulatory issues involved in this process and the actual techniques of group accounting.

The module will also address accounting for foreign currency transactions and translation, as required when groups or companies have activities / companies located overseas. Finally, the module will cover calculation of and accounting for deferred taxation.


The following topics are covered:

1. GROUP ACCOUNTING (Lectures 1 to 20)
  • Why do group accounting
  • Regulatory requirements
  • Difference between book value and fair value
  • Understanding control
  • Comparing and understanding the different methods of group accounting (current methods and history) for acquisition accounting techniques
  • Full consolidation (entity and proprietary)
  • Proportional consolidation
  • Merger accounting (background and history)
  • Subsidiaries and non controlling interests
  • Regulatory requirements and accounting for associates and joint arrangements
  • Goodwill and intangible assets
  • Impairment reviews
  • Why the need for foreign currency translation
  • Regulatory requirements
  • Individual company translation of transactions
  • Translation of company accounts for consolidation
  • Effects of changes in foreign exchange rates
  • Impact and effects of hyperinflation
  • Concepts of the state, public sector and not-for profit sector; in contrast to the private commercial sector
  • Accountability, governance and stewardship
  • Financial and other external reporting regualation/requirements in these sectors
4. Revision of content (Lectures 39 to 40)

Module Skills

Skills Type Skills details
Application of Number * Develop an easy familiarity with numerical data sources and numerical data * Apply numerical data to problem solving with care and accuracy * Assess the reasonableness of and interpret numerical solutions * Support assertions/arguments with appropriately developed and presented numerical data
Communication * Develop confidence in and clarity of oral communication via example class/tutorial participation * Develop clarity and focus of written communication via development of answers to self study questions * Develop and use appropriate subject-specific vocabulary in oral and written communication
Improving own Learning and Performance * Identify and distil the key issues covered by lectures, tutorials and self study * Identify and use a range of learning resources * Investigate benefits of small group working on self study * Structure study to accommodate intensive learning
Information Technology * Use a variety of electronic web- and library-based resources to review available information and retrieve pertinent information * Use spreadsheet software to complete elements of the self study
Personal Development and Career planning * Preparation for seminar tasks will encourage initiative, independence and self-awareness
Problem solving * Identify the precise problem to be solved * Assess which data are pertinent to the problem * Recognize that alternative solution methods might be available * Select and apply appropriate methods for solving the problem * Assess the reasonableness of problem solutions and interpret those solutions
Research skills * Identify which information sources are available to: * facilitate module study (understanding, wider reading) * provide data which allow application of module learning in a real world context * Properly reference/attribute information sources
Subject Specific Skills * Develop competence in understanding and appropriately applying Group accounting techniques comparing theory to practice * Develop competence in understanding the difficulties for large organisations to provide financial information that is both useful, understandable, and relevant.
Team work * Develop experience of team work and develop team working skills via small group working on self study * Group work during seminars

Reading List

Recommended Text
Dodge, R (1996) Group Financial Statements Chapman and Hall Primo search Ernst & Young International GAAP 2005, If purchase GAAP ensure that you fill in the student discount voucher - about £35 instead of £95!) Lexis Nexis Primo search Pierce, A and Brennan, N (2003) Principles and Practice of Group Accounts A European Perspective 1st edition Thomson Learning Primo search Taylor, P. (1996) Consolidated Financial Reporting Paul Chapman Publishing Primo search
Supplementary Text
Alexander, D, Britton, A and Jorissen, A (2003) International Financial Reporting and Analysis Thomson Primo search Elliot, B and Elliot J (2005) Financial Reporting and Accounting 9th edition Prentice Hall Primo search Lewis, R and Pendrill, D (2004) Advanced Financial Accounting 7th edition Prentice Hall Primo search


This module is at CQFW Level 6