NEW YORK UNIVERSITY Stern School of Business
Financial Reporting and Analysis B10.2302 / Summer 2002
Professor John S. Bildersee / 432 Tisch Hall / Email:
Phone:212-998-0027/fax:212-995-4004 / Web site: www.stern.nyu.edu/~jbilders
Official course description:
The course uses tools learned in Financial Accounting and Reporting, such as ratio and accounting analysis, to discuss, in depth, financial reporting principles, emphasizing the link between the reporting principles and the financial statements. Students will learn how management uses financial reporting decisions to influence reported income and asset and liability values, and they will gain the tools necessary to analyze the impacts of alternative reporting decisions on financial statements.
Course schedule:
Wednesday classes from May 22 to July 24
Final scheduled for July 31
Date / Before break / After break
May 22 / Overview 1 (All), Revenue Recognition 2 (46-66 only), 3 (All), 5 (200-204 only), 6 (242-246 only), 7 (318-320only)
May 29 / Receivables 8 (All, 363-368 for lenders only) / Receivables, continued
June 5 / Inventories 9 (All + App. B and C) / Inventories, continued
June 12 / Liabilities 11 (except 529-545), Chapter 8 (363-368 only & for borrowers only) / Leases 12 (All)
June 19 / Leases, continued / Leases, continued
June 26 / Midterm Exam (through leases)
July 3 / Taxes 13 (All) / Taxes, continued
July 10 / Taxes, continued / Pensions 14 (All)
July 17 / Pensions, continued / Pensions, continued
July 24 / EPS 15 (770-774) / Executive Compensation 15 (774-782)
July 31 / Final Exam
The text for the course is Financial Reporting and Analysis by Lawrence Revsine, Daniel W. Collins, and W. Bruce Johnson (Prentice Hall), Second Edition (RCJ). Additional materials can be found on the class website or will be distributed by the professor.
Grading is as follows: Midterm - 40%, Final - 45%, Class participation and homework - 15%.
Everybody should bring his name card and to be prepared to discuss the day’s required homework assignment.. Although homework will not in general be collected, it will be collected from time to time. Late assignments will not be accepted. The handed-in homework will be checked to see that an honest effort is made. Handed-in homeworks will be part of your class participation grade. A portion of each class will be used to discuss textbook problems that focus on and clarify specific issues.
Each chapter includes execrises (E), problems (P) and cases (C). The exercises are short and focused on narrow issues. They will probably be focused on first. The problems and cases are generally somewhat broader and require more thought and experience with the topics. It is likely that they will receive more focus later during discussions of the topics.
B10.2302 - Schedule of Homework Assignments:
At the end of each chapter are Exercises, Problems, and Cases, denoted E, P, and C respectively, below. Each question is also denoted by its company name and topic. We will cover required homework questions in class; recommended questions are optional, but helpful for studying for the exams. Although homework will not in general be collected, from time to time I will collect the day’s assignment. In this case, the handed in homework will be checked just to see that an honest effort is made. The homework must be handed in when called for; no late assignments will be accepted. Homeworks will be part of your class participation grade.
Problems by topic (and chapter):
Chapter / Required / Recommended
Overview:
Chp.1 / C1-1 AST restatement
C1-6 TWA Extra-ordinary gain
Chp. 2 / E2-10 Younger, Accounting Change / E2-11Roem Acct Change
P2-11 Helen Disc Op
P2-12 Ingersoll Rand sustainable earnings
C2-2 Quaker G’s/L’s
Chp. 3 / E3-8 Franchise fee revenue
Chp. 6 / P6-4 Examples of NOPAT
P6-8 General Motors
P6-18 Forecasts
P6-20 Restructuring Charges
C6-5 Microsoft Unearned Rev
C6-7 Monsanto EVA
Chp. 7 / P7-1 ConAgra Exec Comp
P7-5 Cayman Exec Comp
P7-9 Microsoft Unearned Rev
Chp. 10 / P10-13 Major Motors chg in useful life / C10-3 Delta chg in useful life
C10-1 Microsoft R&D
Receivables (May 29)
Chp. 8 / P8-9 Mik-Gen Collateralized Borrowing / P8-1 Baer-Background
P8-14 Disclosures / P8-10 Atherton Factoring
P8-15 Moto-Lite Real Sales? / P8-12 Fish Spotters - Restructured Note
P8-16 Aurora Al. Real Sales? / C8-5 Software Tool Analysis
Inventories (June 5)
Chp. 9 / E9-13 Acute DVL / E9-10 Hastings - FIFO to LIFO
P9-3 Ruedy LIFO liquidation / E9-14 Fern DVL
C9-1 Barbara LIFO Analysis / P9-2 Alex FIFO/LIFO
C9-2 GE LIFO footnote / P9-8 Trinity LIFO/Avg cost
C9-3 Harsco LIFO footnote / P9-9 Fraser FIFO/LIFO
C9-6 Weldotron FIFO-LIFO switch / P9-12 Maple LIFO analysis
Liabilities (June 12)
Chp. 11 / E11-5 Davis bond retirement / E11-7 Brower loss contingency
E11-9 Tusk D/E swap (MV=$82,509,064) / E11-11 3Way - floating rate debt
E11-10 Ledge Zero Coupon / E11-13 Wood off B/S debt
P11-10 Mead reading financials / P11-6 Tango bond retirement
P11-20 Chain debt-debt swap / P11-16 Rumours amortization
C11-3 Delhaize disclosure / P11-17 3 loss contingency disc
C11-4 ShopKo disclosure / P11-21 ALZA zero coupon disc
C11-2 TuesdayMorn disclosure
C11-5 Coca Cola disclosure
Leases (June 12)
Chp. 12 / E12-2 Lafayette lessee / P12-3 Seven Wonders annuity due
E12-3 East - lessee
E12-4 Ball lessee
P12-2 Seven Wonders ordinary annuity
Leases (June 19)
Chp. 12 / E12-6 Benedict sales type lease / E12-1 Fox lessor/lessee
E12-7 Glade lessor drct fncng (DF) lease / E12-5 Grady lessor
E12-12 Roe executory costs / E12-8 Peg sales type lease
E12-13 Lane sale and leaseback / P12-7 Railcar lessor DF
P12-5 Kingston ratios / P12-8 Railcar operating lease
P12-11 Overseas FSA / P12-9 ABC sales type lease
P12-13 Penguin disclosure / P12-10 Trans Global FSA
C12-4 Delta disclosure / P12-12 Corporal FSA
C12-6 Sears disclosure / C12-1 Arcadia disclosure
C12-2 May disclosure
C12-3 Tuesday Morn
Taxes (July 3)
Chp. 13 / E13-6 Tyre current and deferred tax / E13-1 Allen cur tax/pay
E13-3 Tow deferred tax liability / E13-2 Huff deferred tax liability
E13-7 Dun current and deferred tax / E13-4 Nor deferred tax, B/S
E13-8 Kent current & deferred tax / E13-5 Mill LT contracts
E13-10 Black deferred tax asset / E13-9 West deferred tax asset
E13-17 Finland DTA valuation allowance / E13-11 Quinn deferred tax exp.
P13-9 Enid statutory Vs Fe tax rates / P13-3 Lex’ton deferred tax exp.
P13-13 Crumb leasing and deferred tax / C13-4 Circuit City footnote
C13-1 Baldwin footnote
Taxes (July 10)
Chp. 13 / E13-16 Mob NOL / E13-13 Town NOL
E13-19 Ally comprehensive / E13-14 Ix NOL
P13-6 Mete comprehensive / E13-15 Colt NOL
P13-8 Baron NOL / P13-1 Moss deferred tax liability
P13-11 Bush comprehensive / C13-2 Sara Lee footnote
Pensions (July 10)
Chp. 14 / E14-1 Seed PBO / E14-2 Kerri B/S liability
E14-3 Loch prepaid cost / E14-6 Gail ROA
E14-4 Webb contribution / E14-8 Dell Prepaid cost
E14-5 Nome additional liability / E14-10 Payne min liability
E14-7 Kane B/S liability / E14-12 Lee expense
P14-7 Magee discount rate
P14-14 Kothari disclosure
Pensions (July 17)
Chp. 14 / E14-13 Bostonian comprehensive / P14-3 Pullman comprehensive
E14-14 Nelson funded status reconciliation / P14-9 Saddington comprehensive
P14-1 Sparta comprehensive
P14-2 Turner comprehensive
P14-5 ABC PBO,ABO & exp
P14-12 Beatty corridor amortization
C14-3 Shileny & Cribb disclosure
Earnings Per Share (EPS) (July 24)
Chp. 15 / E15-12 Tam basic EPS / E15-16 Keystone repo, EPS
E15-13 Fountain #shares / P15-9 GE Earnings management
E15-14 Petrock basic and diluted EPS
P15-4 Holiday Roads basic & diluted EPS
P15-8 Central Sprinkler repo’s and EPS
P15-12 Kadri EPS comprehensive
Executive Stock Options (July 24)
Chp. 15 / E15-11 Austin ESO’s
E15-15 Amos ESO’s
P15-6 Schlumberger ESO disclosure
C15-1 Amazon ESO disclosure