ACCOUNTING

THEORY
COURSE DESCRIPTION:
 This course discusses the conceptual framework underlying
financial accounting practice, the development of
accounting theory (normative and positive) and the
development of financial accounting environment.
 It also discusses conceptual aspects of accounting
regulation, financial statement elements, disclosure, fair
value, international financial reporting standards, and
theories underlying accounting research.
LEARNING OUTCOMES
Hard Skills:
After finishing this course, students are able to:
 Describe the process of accounting theory formulation
 Explain the conceptual framework of financial accounting and the development of
accounting standards
 Explain the elements of financial statements and their disclosures
 Explain the role of international bodies in the formulation of international
financial reporting standards
 Explain fair value measurement in financial reporting
 Explain various theories underlying accounting research
Soft Skills:
After finishing this course, students are able to:
 Work on time and in teams
 Think critically and innovatively
 Convey ideas and solve accounting problems
 Behave ethically & professionally
RULE OF THE GAME
 come to the class on time. Do not join the class if you come late more than
15 minutes (except for early notification)
 Not allowed to go out of class and "chat " in class
 Keep all phones silent
 Neatly dressed, may not wear T-shirts, and put shoes on
 read all scheduled materials before attending class. Quiz may be given
everyday
 Submit all assignment on time. Late submission will result in 10% fine per day
of your obtained mark
LEARNING METHOD
 Class will be divided into certain groups (A, B, C, D, etc) consisting of 5 students
 Group members is label numerically (1, 2, 3, 4, 5)
 Member with label 1 should learn Sub Topic 1, Member 2 = SubTopic 2, respectively
 On the day of class, all members with the same Label will join new group (Group 1,
Group 2, Group 3, Group 4 and Group 3) and discuss the SUB TOPIC (takes around
30 minutes)
 After discussion in Group 1, 2, 3, 4, 5; all members will return to the Main Group (A,
B, C, D, E) to discuss and share knowledge about the main topics (takes around 45
minutes)
 Review of Topics and Quiz
 Conclusion (Take Home Knowledge)
 REFERENCES
Chorafas, D. N. 2006, IFRS, Fair Value and Corporate Governance: The Impact on Budgets, Balance Sheets and Management
Accounts , Amsterdam: Elsevier (C)
Belkaoui, A. R., 2004, Accounting Theory, 4th Ed., London: Business Press Thomson Learning, (B)
Deegan, C., 2013, Financial Accounting Theory, Sydney: McGraw-Hill Education Australia(D)
Epstein, B.J, and Jermakowicz, EK., 2010, Wiley 2010 Interpretation and Application of International Financial Reporting
Standards, Hoboken, New Jersey: John Wiley & Sons, Inc. (EJ)
Godfrey, J. Hodgson, A., Traca, A., Hamilton, J., Holmes, S., 2010, Accounting Theory, 7th Ed., Milton, Qld: John Wiley and
Sons Australia Lts
Hendriksen, E.S dan Van Breda, M. F., 1996, Accounting Theory, Homewood Il.: Irwin (HB)
Robert, C., Weetman, P., and Gordon, P., 2005, International Financial Accounting: A Comparative Approach, 3rd Ed., Essex:
Pearson Education Limited (R)
Indonesia Context:
Anis Chariri dan Imam Ghozali, Teori Akuntansi, Edisi 4, Semarang: Badan Penerbit Universitas Diponegoro, 2014 (CG)
IAI, Standar Akuntansi Keuangan, Jakarta: Penerbit Salemba Empat, Edisi Terbaru
ASSESSMENT:

Assignment 1 (Quiz + Activity) 20%

Assignment 2 (paper) 30%
Mid Term Exam 25%
Final Exam 25%
Assignment 2:
 Integrated Reporting <IR> has been seen as a new phenomenon of financial
reporting practice and has been applied in various countries including South
Africa and Australia. Indeed, South Africa requires all companies listed in
capital market to prepare Integrated Reporting <IR> as mandatory annual
reports. In Indonesia, however, integrated reporting <IR> has been applied
voluntarily by several companies. Pros and Cons arise related to the
implementation of integrated reporting <IR> in Indonesia. Do you agree or
disagree with the implementation of the Integrated Reporting <IR> as a
financial reporting model in Indonesia? Discuss your argument.
 This paper should be submitted in group on the final day of this course (Week
14) at 23.59
Assignment writing format:
 Paper should be written using an argumentative writing style (based on logical
reasoning and supported by relevant references)
 Cover of paper must contain the names and student numbers of group
members and their contribution to the writing.
 Format of writing:
◦ Margin: default Microsoft Word
◦ Paper A4, Times New Romance, Font 12, Space: 1.5, maximum: 15 pages
◦ Structure: Background, Problems, Discussion, Conclusions, Reference
◦ Submitted in Softcopy, with filename: ATS1_Class_Group (Example:
ATS1_Class X_Group A)
 SCHEDULES
WEEK TOPICS SUB TOPICS
1 Introduction to No Assignment
Accounting Theory
2 Formulation of 1. What is accounting and what is accounting theory
Accounting Theory   2. What is the characteristics of good accounting theory
3. Why is accounting theory needed
4. How is the accounting theory formulated
5. What are the differences between normative accounting theory and positive
accounting theory

3 Accounting and Its 1. What is called "worldwide accounting diversity" and why accounting
Environment practices among companies and countries are different
2. Why political and economic system may affect accounting practices
3. Why Legal system and Taxation system may influence accounting practice
4. Why Corporate financing system, Accounting profession and religion may
determine accounting practice
5. Why culture may influence accounting practice
 SCHEDULES
WEEK TOPICS SUB TOPICS
4 Conceptual 1. What is conceptual framework of Financial Accounting
Framework of 2. Why is Conceptual Framework Required
Financial Accounting 3. How is Conceptual Framework formulated
4. What is the contents of the Conceptual Framework
5. Can Conceptual Framework solve all accounting problems? Explain
5 Accounting 1. What is accounting standard and how it differs from conceptual frameworks
Regulations and "generally acceptable accounting principles"
2. What is the content of accounting standards and Why are accounting
standards needed
3. Explain regulation theory underlying the need for accounting standards
4. Who should prepare accounting standards
5. Who should formulates and how are accounting standards formulated in
Indonesia
 SCHEDULES
WEEK TOPICS SUB TOPICS
6 International 1. What is IASB and what is the purpose of establishing IASB
Accounting standard 2. Explain the roles of the International Financial Reporting
Board (IASB) and Interpretations Committee (IFRIC) and Standards Advisory Council
International Financial (SAC)
Reporting Standards 3. What is IFRS and How is IFRS formulated
(IFRS) 4. What are benefits and pitfalls of IFRS
5. How does accounting standard harmonization differ from accounting
standard convergence
7 Assets 1. What is asset and what are characteristics of assets
2. How is asset measured and recognized in financial statements
3. How are current asset and intangible asset measured and recognized
4. What is Plant, Property and Equipment and how are they recognized
5. What is Biological Assets and how are they recognized
 SCHEDULES
WEEK TOPICS SUB TOPICS
8 Liabilities 1. What is liability and What are the characteristics of Liabiility
2. What is: a. Legal obligation b. Constructive Obligations c.
Equitabel Obligations
3. How is liability measured and recognized
4. What is Provision and Contingence
5. What is Off-balance sheet financing
9 Revenue 1. What is Revenue?
2. How does revenue differ from gains?
3. How we recognize revenue
4. What is the critical events to recognize revenue
5. Can appreciation and accretion be recognized as revenue
 SCHEDULES
WEEK TOPICS SUB TOPICS
10 Expenses 1. What is expense and how does expense differ from Cost
2. Describe the characteristic of expenses and Explain the difference
between expenses and Losses
3. How is expenses measured and recognized
4. What is Matching Concept?
11 Income and Equity 1. What is Income and what is the characteristics of accounting
Income
2. What is the difference between earning and comprehensive
income?
3. Describe the elements that make up comprehensive income
4. What is equity
5. Explain the elements forming Equity
 SCHEDULES
WEEK TOPICS SUB TOPICS
12 Disclosure of 1. What is presentation and disclosure, Explain the types of disclosures in
accounting accounting and why is disclosure important
information 2. How are financial statements presented and How is information disclosed
3. Explain what is social and environmental disclosure
4. Explain what is sustainability reporting
5. Explain what is integrated reporting <IR>
 
13 Fair Value 1. What is Fair Value
Measurement 2. Explain the difference between Fair Value and Fair Market Value
3. What are the benefits of using Fair Value in the presentation of financial
statements
4. What is the purpose of using Fair Value
5. Describe Fair Value measurement Approaches
 SCHEDULES
WEEK TOPICS SUB TOPICS
14 Theories What do you know about the following theories:
underlying 1. Agency Theory
accounting 2. Signaling Theory
research 3. Theory stakeholders
4. Legitimacy Theory
5. Institutional Theory

FINAL EXAM Assignment 2 should be submitted in this week

Note: All INDIVIDUAL ASSIGNMENTS should be handwritten on Folio paper and

brought during lectures (in accordance with the course material at each meeting)