PAPER-4 Corporate Accounting and Financial Management CS Executive Mod-1



a To provide knowledge and understanding of the concepts, principles and practices in Company Accounts, Interpretation of Financial Statements.
b To provide conceptual clarity and practical aspects of financial management so as to develop skills in taking financial and investment decisions and in business strategies
Level of Knowledge: Working Knowledge
Detailed Contents
Part I : Corporate Accounting (60 Marks)

1. Introduction to Accounting:

*Accounting Cycle
*Single / Double entry system
*Accounting Principles
*Accounting Concept & Convention
*Types of Account
*Journal l Ledger
*Trial Balance
*Final Account

2. Introduction to Corporate Accounting

*Records of accounts to be maintained by a company
*Preparation and Presentation of Financial Statements
*Schedule III of the Companies Act, 2013
*Disclosure Requirement
*True and Fair View of Financial Statements

3.Accounting Standards (AS)

 *Scope and Compliance
*International Financial Reporting Standards
*Overview of AS
*AS vs. Ind AS vs. IFRS

4. Accounting for Share Capital :

*Issue of Shares
*Forfeiture and Reissue of Shares
*Accounting Treatment of Premium
*Buy-back of Shares
*Redemption and Conversion
*Capital Redemption Reserve
*Bonus Shares
*Rights Issue
*Sweat Equity Shares and Underwriting
*Book Building  

5. Accounting for Debentures

*Accounting Treatment
*Debenture Redemption Reserve
*Redemption of Debentures and Conversion of Debentures into Shares

6. Related Aspects of Company Accounts

*Accounting for ESOP
*Equity Shares with differential rights
*Underwriting and Debentures  

7. Consolidation of Accounts

*Standalone and Consolidated Financial Statements
*Holding Company
*Subsidiary Companies
*Associate Companies and Joint Venture
*Accounting Treatment and disclosures  

8. Financial Statement Analysis:

*Characteristics of good financial statements and its relevancy for better reporting
*Requirements of Financial Reporting and Recent trends
*Best Practices applicable to all companies
*Usage and features of ratios analysis
*Liquidity ratios l turnover ratio
*Leverage ratios
*Insolvency ratio and profitability ratio
*DuPont Analysis l Reading and Interpretation of Financial Statements

 9. Cash Flows:

*Understanding the Statement of Cash Flows
*Identify the purpose of the statement of Cash Flows
*structure and interpretation of operating, investing and financing activities in Cash Flow statement
*Analyze information in the statement of Cash Flows to determine whether the firm is in its life cycle
*Examine additional uses of Cash Flow information  

10. Forecasting Financial Statements:

*Build forecasts of future Balance Sheets, Income Statements and Statements of Cash Flows
Part II : Financial Management (40 Marks)

11. Introduction:

*Scope & Objectives of Financial Management
*Profit Maximization vs. Wealth Maximization

12. Time Value of Money:

*Concept of Time Value of Money – The power of compounding
*Significance and application of Time Value of money
*Concept of Annuity
*Understanding and application of Table used in Time value of money

13. Capital Budgeting:

*Compounding and Discounting techniques - Capital Budgeting Process
*Techniques of Capital Budgeting - Discounted and Non- Discounted Cash Flow Methods
*Profitability Index
*IRR l Economic Value Added (EVA)
*Capital Rationing
*Risk Evaluation and Sensitivity Analysis  

14. Cost of Capital:

*Factors Affecting Cost of Capital
*Methods for Calculating Cost of capital
*Weighted Average Cost of Capital (WACC)
*Marginal Cost of Capita

15. Capital Structure:

*Significance of capital structure
*Determinants of capital structure
*Capital structure planning and designing of optimum capital structure
*Capital Structure Theories
*EBIT- EPS Analysis
*Breakeven - EBIT Analysis
*Under / Over Capitalization

16. Dividend Decisions:

*Factors determining dividend policy
*Dividend Models- Relevant/ Irrelevant Theories - Walter’s Model, Gordon’s Model, M-M Model
*Forms of Dividend – Cash Dividend, Stock Dividend, Stock Splits, Share repurchase

17. Working Capital Management:  

*Types l Determinants and Assessment of Working Capital Requirements
*Negative Working Capital
*Operating Cycle Concept and Applications of Quantitative Techniques
*Management of Working Capital – Cash Receivables Inventories
*Financing of Working Capital
*Banking Norms and Macro Aspects
*Factoring and Forfaiting

18 Security Analysis:  

*Measuring of Systematic and Unsystematic Risk
*Fundamental Analysis (Economic, Industry and Company)
*Technical Analysis and Efficient Market Hypothesis

19. Operational Approach to Financial Decision

*An Overview of Costing
*Key Concepts
*Basics Principles of Costing
*Marginal Costing – Breakeven Point, Margin of Safety