The course focus will be on enabling students to extract information from financial statement disclosures, including footnotes, for purposes of equity valuation, financial statement analysis, and developing a general understanding of the economic performance and health of a firm. The particular accounting topics to be covered include employee stock options, income taxes, pensions, leases, fair values, derivatives, financial instruments, and asset securitizations. Many of these topics relate to accounting standards that have been both controversial (e.g., the pension and stock option standards) and are currently being reconsidered by the FASB and their international counterpart, the IASB (e.g., asset securitizations, leases, and fair value accounting). The course will draw on current deliberations by accounting standard setters, and will help students understand the political landscape of standards setting in relation to prominent and controversial events in the financial markets, such as the mortgage market collapse and the 2007-2009 financial crisis and the collapse of Silicon Valley Bank in 2023.
Who should take this course: Students who are planning careers in corporate finance, financial analysis, credit analysis, investment and merchant banking, or finance in general. However, students in general management would also benefit from the course by developing an ability to read and interpret financial statement information.
Course grading: (1) open-book take home final (50%), (2) 4-5 graded homework cases (40%), and (3) class participation (10%).
All reading material, including lectures, will be available from this website. There is no course pack to purchase. There is no need to print any materials except perhaps the class lecture Powerpoint slides. It is your choice whether you wish to print slides to write on in class or to type notes directly on the slides.
Weekly review sessions will be held on Fridays, 3:30-4:30pm.
