Advanced Financial Reporting: Accounting for Business Combinations and Preparation of Consolidated Financial Statements

Go to Course: https://www.coursera.org/learn/advanced-financial-reporting

Introduction

## Course Review: Advanced Financial Reporting: Accounting for Business Combinations and Preparation of Consolidated Financial Statements In the dynamic landscape of finance and accounting, continuous education is paramount for professionals looking to enhance their skills and stay updated with the latest regulations and practices. One highly recommended course on this front is **"Advanced Financial Reporting: Accounting for Business Combinations and Preparation of Consolidated Financial Statements,"** which is available on Coursera. This course offers a comprehensive deep dive into the intricate world of financial reporting related to business combinations, making it an excellent choice for finance professionals, accounting students, and anyone looking to strengthen their grasp on advanced financial analysis. ### Course Overview This course meticulously covers crucial accounting standards, particularly ASC 805 (business combinations) and ASC 810 (consolidated financial statements). It delves into the various elements that dictate how businesses account for mergers and acquisitions, the preparation of consolidated financial statements, and other related topics. Some core themes explored throughout the course are: - The differences between business combinations and asset acquisitions - Step-by-step acquisition methodologies - Deconsolidation processes - Segment reporting - Goodwill impairment tests The structured approach taken by the course encourages learners to develop a comprehensive understanding of each concept before advancing to the next. ### Detailed Syllabus Breakdown 1. **Course Orientation**: This introductory module familiarizes learners with the online learning environment, essential tools, and the course structure, setting students up for success. 2. **Module 1: Control of a Business**: This module defines the concept of control, introduces the scope of "Business Combination," and explains the accounting methods to record acquisitions. 3. **Module 2: Acquisition Method**: Learners will explore the acquisition method of accounting complete with the principles of measuring goodwill and preparing consolidated financial statements on the date of acquisition. 4. **Module 3: Components of Consideration Transferred in a Business Combination**: This segment discusses the measurement principles involved in share-based payments, contingent considerations, and practical case studies like the merger between Express Scripts and Medco. 5. **Module 4: Assets Acquired and Liabilities Assumed**: Participants gain insights into various identifiable assets and liabilities in business combinations, including the implications of taxable versus non-taxable transactions. 6. **Module 5: Preparation of Consolidated Financial Statements After Acquisition**: This module emphasizes how to prepare post-acquisition consolidated financial statements while factoring in accounting acquisition premiums. 7. **Module 6: Intercompany Transactions and Noncontrolling Interest**: Students will navigate the complexities of intercompany transactions, calculate noncontrolling interest, and learn about reporting retained earnings. 8. **Module 7: Change in the Percentage of Ownership and Other Related Topics**: This module elucidates how to account for changes in ownership percentages, accounting for staged business combinations, and deconsolidation. 9. **Module 8: Segment Reporting and Goodwill Impairment Test**: Finally, learners will tackle segment reporting requirements and learn methods for conducting goodwill impairment tests, including public vs. private company accounting rules. ### Why You Should Enroll - **Expert Instruction**: The course is designed and delivered by industry experts, providing learners with valuable real-world insights into complex accounting scenarios. - **Hands-On Experience**: Through case studies and practical exercises, you will gain the skills needed to apply your knowledge in a professional context. - **Flexible Learning**: Coursera’s platform allows you to learn at your own pace, making it convenient to fit this advanced course around your schedule. - **Professional Relevance**: In an age where business combinations are increasingly common, the ability to accurately report on them is a skill set that can significantly enhance career prospects and professional growth. ### Conclusion If you are an accounting professional, a finance student, or someone specifically interested in mastering advanced financial reporting techniques, **"Advanced Financial Reporting: Accounting for Business Combinations and Preparation of Consolidated Financial Statements"** on Coursera is an essential course that you should consider enrolling in. Its structured syllabus, expert guidance, and practical application make it an invaluable resource for anyone looking to excel in the field of accounting and financial reporting. Don’t miss the opportunity to elevate your expertise and gain a competitive edge in your career—enroll today!

Syllabus

Course Orientation

You will become familiar with the course, your instructor and your classmates, and our learning environment. This orientation will also help you obtain the technical skills required to navigate and be successful in this course.

In this module, you will be introduced to the concepts of control over a business. You will learn different accounting methods used to account for investments in equity securities, the basics of control, the scope of "Business Combination" (ACS 805), as well as the methods to record an acquisition of a group under asset acquisition and business combination.

In this module, you will be introduced to the acquisition method of accounting for a business combination. You will learn the measurement principles for an acquisition and the goodwill equation to calculate the goodwill or gain from a bargain purchase as a result of the business combination. You will also learn how to prepare the consolidated financial statements on the business combination date.

In this module, you will be introduced to different components of consideration transferred in a business combination. You will learn the measurement principles of share-based payment awards and will examine a real-life merger between Express Scripts and Medco companies. Moreover, you will be introduced to the concept of contingent consideration and learn the methods to classify, recognize, and record contingent considerations.

In this module, you will gain a deeper understanding of the assets acquired and the liabilities assumed in a business combination. You will be introduced to different types of identifiable assets acquired, such as defensive intangible assets and in-process research and development (IPR&D), and the rules to recognize and measure them under U.S. GAAP and IFRS. You will also learn the difference between a taxable transaction and a non-taxable transaction and how to calculate deferred taxes on an acquisition date.

In this module, you will learn how to prepare the consolidated financial statements after the acquisition date. The concept of accounting acquisition premium (AAP), and the methods to calculate identifiable and unidentifiable portions of the accounting acquisition premium will be introduced. You will also learn the effects of accounting acquisition premium on the consolidated financial statements and the relevant consolidation adjustments. Moreover, you will be introduced to intercompany inventory transactions and learn to make consolidation adjustments for intercompany inventory sales and intercompany inventory profits.

In this module, you will be introduced to more types of intercompany transactions as well as noncontrolling interests. You will learn the consolidation adjustments for intercompany transactions with depreciable assets and intercompany debt. The noncontrolling interest (NCI) will be introduced. You will learn the definition, calculation, and presentation of noncontrolling interest and net income attributable to NCI in the consolidated financial statements. You will also learn how to report consolidated retained earnings and the subsequent measurement of noncontrolling interests. Lastly, an example of consolidation with noncontrolling interest will be shown.

In this module, we will explore the accounting rules for changes in the percentage of ownership of a Subsidiary and other topics that relate to business combinations. You will learn how to account for a business combination that was achieved in stages, and how to calculate the gain or loss on deconsolidation of the Subsidiary. Also, you will be introduced to the situation in which the Subsidiary acquires shares of the Parent and learn the methods to measure and record the transaction.

In this module, you will be introduced to segment reporting and the goodwill impairment test. You will learn the rules for public companies to disclose segment information in the notes to annual and interim financial statements. You will also learn what information should be presented in the entity-wide disclosures and when. Then, the methods for identifying the reporting units, qualitative assessment for goodwill impairment, and the quantitative one-step goodwill impairment test will be introduced. You will also learn the goodwill impairment test under IFRS and the rules for private companies to account for goodwill.