Learning objectives

The course aims to develop the knowledge on foundation and interpretation of the financial statements in the perspective of national legislation and international accounting standards, considering general principles of foundation, classification and evaluation criteria and the techniques of financial statement analysis and interpretation. The aim of this course is to improve awareness on the process for identifying income and capital as a pivotal lever for companies’ management and a way to identify the conditions of income, financial and capital equilibrium.
The course also aims to improve the student’s skills necessary to face concrete problems related to the foundation and analysis of the financial statement.
At the end of the course the student must demonstrate the capability to take the main classification and evaluation choices as starting point to draft a financial statement; the ability to carry out a financial statement analysis (financial statement reclassification, indexes calculation and flows calculation); the capability to read, understand and interpret the analyzed financial statement. Accordingly, the various topics into the program are developed also by presenting exercises, business cases, and examples built on real situations.

Prerequisites and basic notions

Knowledge of the main corporate transactions and their double-entry keeping is required.

Program

Part I - Financial statement theory and the financial statement frameworks
• Financial statement functions
• Financial statement discipline in accordance with national law
• General principles of the financial statement
• Financial statement structure and contents in accordance with national law
• Innovative forms of corporate reporting - Towards Integrated Reporting
Part II – Areas of employment of the financial statements: the financial statement analysis
• Aims, potentialities and limits of the financial statement analysis
• Areas of employment and techniques for the financial statement analysis
• Reclassification technique
• The indexes calculation technique
• Flow calculation technique
Part III – Evaluations on the financial statement contents in accordance with national law
• Assets evaluation
• Property, plant and equipment
• Intangible assets; the recognition and representation of innovations output
• Financial long-term assets, equity investments and other financial instruments
• Evaluation of current assets
• Inventories
• Work in progress
• Credits
• Other assets
• Evaluation of liabilities
Part IV - Introduction to the consolidated financial statement

Bibliography

Didactic methods

The teaching methods adopted for the academic year 2022/23 take into account the government and the University provisions for the management of the pandemic crisis. Therefore, the activities carried out will be provided face-to-face and / or remotely according to the regulations in force during the semester.
The teaching methods consist of: i) lectures accompanied by cases and examples and ii) exercises useful for learning the application parts.
During the course, reference will be made to a business case whose financial statements will be discussed and interpreted.
A collective and individual tutoring service is available by a student enrolled in CdLM according to a calendar that will be made available on the Moodle platform. This service is aimed at supporting the performance of the exercises taken from the exercise book.

Learning assessment procedures

The assessment of learning will take place through a written test consisting of 21 multiple choice questions (mainly, but not exclusively, theoretical content) and a quantitative exercise.
The student who passes the written test can then access an optional oral test. The oral test can be requested by the student who has passed the written test if he is convinced that his preparation is not reflected by the results of the written test. Exam methods are not differentiated between attending and non-attending students.

Evaluation criteria

The multiple choice questions are aimed at verifying the knowledge of the part of the program that is the subject of the question as well as the understanding of the technical language and economic calculation skills in terms of preparing the financial statements and its analysis. The exercise is aimed at verifying the methodological application of the knowledge acquired, in order to ascertain the specific knowledge and skills of the student on the various operational aspects relating to the preparation and analysis of the financial statements. The student passes the written test if he achieves a total score of at least 18 thirty-first, with the constraint of having achieved:
i) at least 10 thirty-first in multiple choice questions (compared to 21/31 made available);
ii) at least 5 thirty-first in the year (compared to the remaining 10/31 made available).

Exam language

Italiana