Horn International College

Department of Accounting and Finance

Course Outline
Course Title: Financial Management II
Course Code: AcFn3042
Credit hours: 3
Course Instructor: Adem Mohammed
Course Objective: Upon the successful completion of this module, students should be able to:
 Identify, measure, and price the various risks faced by the companies
 Perform commercial banking procedures
 Explain the role and functions of financial institutions, and the related regulation and
supervision
 Explain the role of financial markets for the well function of the economy
1. Capital Structure Policy and Leverage
1.1. The capital structure question
1.2. Factors that influence capital structure decisions
1.3. Business and Financial Risk
1.3.1. Business risk and operating leverage
1.3.2. Financial risk and financial leverage
1.4. Determining the optimal capital structure
1.4.1. EBIT/EPS analysis
1.4.2. The effect of capital structure on stock price and the cost of capital
1.5. Introduction to the theory of capital structure
1.5.1. Modigliani and Miller (M&M) Propositions I and II with no taxes
1.5.2. Modigliani and Miller (M&M) Propositions I and II with taxes
1.5.3. Trade-off theory (Static Trade-off Hypothesis)
1.5.4. Signaling theory
1.5.5. Using debt financing to constrain Manager
2. A Review of Dividends and Dividends Policy
2.1 Dividend theories
2.2 Establishing the dividend policy in practice
2.3 Factors influencing dividend policy
2.4 Other factors related to cash dividends:
2.4.1 Stock dividends and stock splits
2.4.2 Stock repurchase
3. Financial Forecasting
3.1 Overview of financial forecasting
3.2 Forecasting growth rates and outside financing
3.3 Forecasting external financing needs
3.4 Financial statement forecasting: the percentage of sales method
4. Managing Current Assets
4.1 Working capital terminologies
4.2 Alternative current asset investment policies
4.3 Cash management
4.4 Managing inventory
4.5 Receivables management
5. Financing Current Assets
5.1 Alternative current asset financing policies
5.2 Advantage and disadvantage of short-term financing
5.3 Sources of short-term financing (Accruals, Accounts Payable, Short-term Bank Loan, and
Commercial Papers)
Teaching &Learning method/ Strategy:
 Lectures, discussions, homework, reading assignment, textbooks, lecture notes, and other
resources.
Assessment/Evaluation Method presented in scheme:
Component Weight Cover
Test 1 15% Ch 1 & Ch 2
Test 2 15% Ch 3 & Ch 4
Assignment 1 5% Ch 1 & Ch 2
Assignment 2 5% Ch 3-Ch 5
Quiz 1 5%
Quiz 2 5%
Final Exam 50% All Chapters

Text Book:
Text Book
Ross, S.A., Westerfield, R.W. and Jordan, B.D., Fundamentals of Corporate finance,10th
edition, McGraw-Hill/Irwin,USA,2013.
Reference Books
1. Ross, S.A., Westerfield,R.W. and Jordan, B.D., Fundamentals of Corporate Finance, 2nd
edition, Richard D. IrwinInc.,USA, 1993
2. Scott Besley and Brigham E. F., Essentials of Managerial Finance, 14th edition, Thomson
South-Western, USA, 2008.
3. Brigham, E.F. and Houston, J.F., Fundamentals of Financial Management, 9th Edition, South-
Western, USA, 2001.
4. Nevue, R.P., Fundamentals of Managerial Finance, 2nd edition, South-Western Publishing
Co., Ohio, 1985
5. Gitman, L.J., Principles of Managerial Finance, 12th edition,
Harper Collins, USA, 2009.
6. Petty & et. A., Basic Financial Management, 6th edition,
Prentice-Hall, Inc., 1993
 Somali Regional State
College of Management and Public Service
Department of Accounting and Finance

Course Title: Intermediate Financial Accounting I

Credit Hours:4
Course Code: AcFn3021 Program: Weekend
Course Instructor: Adem Mohammed
Course Objective: On completion of this module students should be able to:
 Explain the IASB‟s conceptual framework underlying financial reporting;
 Demonstrate an awareness of the substance of and the standard-setting process for
international accounting standards;
 Perform the accounting functions of analyzing, recording and reporting as accomplished
by the accounting cycle and the preparation of the primary financial statements
Chapter One: Development of Accounting Principles and Professional Practice
1.1 The environment of financial accounting
1.2 Financial reporting requirements in Ethiopia
1.3 The IASB and its governance structure
1.4 List of IASB pronouncements
1.5 The IASB‟s conceptual framework for financial reporting
1.5.1 Objectives of financial reporting
1.5.2 Qualitative characteristics of financial reports
1.5.3 Elements of financial statements
1.5.4 Recognition, measurement, and disclosure concepts
1.6 IFRS-based Financial Statements (IAS 1)
Chapter Two: Fair value measurement and Impairment
2.1. Fair value measurement
2.1.1. Definition
2.1.2. Measurement of fair value
2.1.3. Fair value at initial recognition
2.1.4. Valuation methods
2.1.5. Fair value hierarchy
2.1.6. Disclosure
2.2. Impairment
2.2.1. Definition
2.2.2. Measurement of impairment
2.2.3. Reversal of impairment
2.2.4. Disclosure
Chapter Three: Cash and Receivables
3.1 Cash and internal control
3.2 Types of main bank accounts
3.3 Bank reconciliation
3.4 Reporting of Cash and disclosure requirements
 3.5 Recognition and valuation of accounts receivable
3.6 Recognition and valuation of notes receivable
3.7 Derecognition of receivables
3.8 Reporting of receivables and disclosure Requirements
Chapter Four: Inventories
4.1 Nature and classification of inventory
4.2 Physical goods and costs included in inventory
4.3 Valuation of inventories: A cost-basis approach
4.4 Special inventory valuation methods
4.4.1. Lower-of-cost-or-net realizable value (LCNRV) method
4.4.2. Gross profit method
4.4.3. Retail-inventory method
Chapter Five: Property, Plant, and Equipment
5.1. Acquisition and Disposition of Property, Plant, and Equipment
5.1.1. Characteristics of property, plant, and equipment
5.1.2. Acquisition & valuation of property, plant and equipment
5.1.3. Costs subsequent to acquisition
5.1.4. Disposition of property, plant and equipment
5.2. Depreciation, Impairments, and Revaluations
Chapter Six: Investment property
6.1. Nature of Investment property
6.2. Initial recognition and measurement of investment property
6.3. Subsequent measurement of investment property
6.4. Presentation and disclosure requirements
Chapter Seven: Non-current Assets Held for Sale, and Discontinued Operations
7.1 Nature of NCAHFS and discontinued operations
7.2 Initial recognition and measurement of NCAHFS
7.3 Subsequent measurement of NCAHFS
 7.4 Presentation and disclosure requirements
7.5 Measurement, presentation and disclosure of discontinued operations
Chapter Eight: Intangible assets
8.1. Characteristics and classifications
8.2. Valuation and amortization
8.3. Impairments
8.4. Research and development costs
8.5. Website costs
Text Book:
 Kieso, D. E., Weygandt, J. J., & Warfield, T. W. (2016). Intermediate Accounting, IFRS
Edition, New York: John Willey & Sons.
Reference Books
 Commercial Code of Ethiopia
 Ernst & Young LLP (2016), International GAAP, John Wiley & Sons Ltd.
 www.ifrs.org
 IFRS Blue Book

Horn International College

Department of Accounting and Finance
Course Outline
Course Title: Intermediate Financial Accounting II
Course Code: AcFn3022
Credit hours: 3
Course Instructor: Adem Mohammed
Course Objective: Upon completion of this course, students will be able to:
 Explain the recognition, valuation and disposition of plant, property and equipment;
 Describe the nature of current liabilities, provisions, and contingencies and their
respective accounting and reporting treatments;
 Explain the recognition and valuation of intangible assets;
 Discuss the nature, valuation, recognition and presentation of investments in financial
assets;
  Discuss the accounting and reporting for transactions related to the components of
shareholders‟ equity;
 Discuss the nature and accounting treatment of leases and pensions;
 Demonstrate the ability to apply disclosure requirements pertaining to the financial
statement items covered in this course; and
 Demonstrate the ability to exercise professional and ethical judgment in the application
of the proper accounting and reporting methods.
Chapter One: Current Liabilities, Provisions, and Contingencies
1.1. Nature and types of current liabilities
1.2. Recognition and measurement of provisions
1.3. Contingencies
1.4. Presentation of current liabilities
Chapter Two: Non-Current Liabilities
2.1. Nature and classifications of non-current liabilities
2.2. Recognition and valuation of bonds
2.3. Extinguishments
Chapter Three: Investments
3.1. Nature and classification of investments
3.2. Accounting for debt investments
3.3. Accounting for equity investments
3.4. Impairment of value
3.5. Transfer between categories
Chapter Four: Leases
4.1 The leasing environment
4.2 Classifications of lease
4.3 Overview of Ethiopian lease business law
4.4 Accounting by the lessee
4.5 Accounting by the lessor
4.6 Special accounting problems
Chapter Five: Deferred Taxation
5.1. Accounting income versus taxable income
5.2. Recap of temporary versus permanent differences
5.3. Deferred tax liabilities versus deferred tax assets
5.4. Tax losses carried forward
5.5. Disclosures
Chapter Six: Revenue Recognition
6.1. Revenue recognition framework
6.2. Long-term construction contracts
6.2.1. Overview of Ethiopian construction sector
6.2.2. Basic terminologies in construction contracts
6.2.3. Revenue recognition
Chapter Seven: Accounting Policies, Changes in Accounting Estimates and Errors
7.1. Treatment of changes in accounting policy
7.2. Treatment of changes in accounting estimates
7.3. Treatment of changes in errors
Chapter Eight: Statement of cash flows
8.1. Usefulness of the statement
8.2. Preparation of the statement
8.3. Significant non-cash financing and investing activities
Chapter Nine: Agricultural accounting
9.1. Basic terminologies in agricultural accounting
9.2. Recognition and measurement of agricultural produces
9.3. Reporting and disclosure requirements
 Somali Regional State
College of Management and Public Service
Department of Accounting and Finance

Course Title: Financial Management I

Credit Hours:3
Course Code: AcFn3041
Course Instructor: Adem Mohammed
Program: Regular and Evening Programs
Course Objective: After successfully completing this course, students will be able to: The
course provides a sound understanding of the financial principles, theories and techniques, and
aims to give a solid basis for decision making, incorporating the different aspects of the
company. The course in general concentrates in developing a high level understanding of the
tactical and strategic significance of the financial management function within organizations.
Part I: Introduction
Chapter 1. An Overview of Financial Management
1.1 The nature and scope of financial management
1.2 Financial Markets and Institutions
1.2.1. Cash flows to and from the firm
1.2.2. Primary markets vs. Secondary markets
1.2.3. Money markets vs. Capital markets
1.3 Financial management decisions
1.4 Goal of the firm
1.4.1. Possible goals
1.4.2. The goal of the firm and financial management
1.5 Basic forms of business organizations
Chapter 2. IFRS-Based Financial Statement Analysis
2.1 Purposes of financial analysis
2.2 Tools for financial analysis
2.3 Ratio Analysis
2.3.1.Short term solvency or liquidity measures
2.3.1.1 Long-term solvency measures
2.3.1.2. Asset Management or turnover measures
2.3.2. Profitability Measures
2.3.2.1. Market Value Ratios (Measures)
2.4 Problems with financial statement analysis
Chapter 3. The time value of money
3.1 Why money has a time value?
3.2 Future Value of a single amount
3.3 Present value of a single amount
3.4 Future value of annuity
3.5 Present value of annuity
3.6 Special Case Annuities
3.6.1. Perpetuities
3.6.2. Deferred Annuity
3.7 Uneven Cash Flow Streams
3.8 More frequent compounding
3.8.1. Compounding for less than a year
3.8.2. Effective annual rate and the nominal Rate
Chapter 4. Risk and Return
4.1 Understanding and Measuring Risk
4.1.1. Probability distributions
4.1.2. Measures of Central tendency
4.1.3. Measures of dispersion
4.2 Portfolios
4.2.1. Portfolio weights
4.2.2. Portfolio expected returns
4.2.3.Portfolio risk
4.3 Diversification and portfolio risk
4.3.1. The principle of diversification
4.3.2. Diversification and unsystematic risk
4.3.3. Diversification and systematic risk
4.3.4. Measuring systematic risk
4.3.5. Portfolio betas
4.4 Risk and the required rate of return
4.4.1. CAPM
4.4.2. The security market line
Chapter 5. Cost of Capital
5.1. The meaning of cost capital
5.2. The components of the cost of capital
 5.2.1 The cost of debt and preferred stock
5.2.2 The cost of common equity capital
5.2.3 The cost of retained earnings and new common stock
5.3 The meaning and use of the weighted average cost of capital (WACC)
5.4 Adjusting cost of capital for project risk
Chapter 6. Capital Budgeting Decisions
6.1 The capital budgeting decision process
6.1.1. Steps in the process
6.1.2. Basic terminologies
6.2 Cash flows
6.2.1. The rational for the use of cash flows
6.2.2. The cash flow after-tax (CFAT)
6.2.3. Types of cash flows
6.2.4. Cash flow worksheet
6.3 Capital budgeting techniques
6.3.1. Non-Discounted and Discounted Cash Flow Techniques ( for independent projects with or
without capital rationing problems and mutually exclusive projects )
6.4 Methods for incorporating risk in to capital budgeting
6.4.1. Risk adjusted discount rate
6.4.2. Certainty Equivalents
6.4.3. Sensitivity and Scenario analysis
Text Book:
Ross, S.A., Westerfield, R.W. and Jordan, B.D., Fundamentals of
Corporate finance,10th edition, McGraw-Hill/Irwin,USA,2013.
Reference Books
1. Ross, S.A., Westerfield,R.W. and Jordan, B.D., Fundamentals
of Corporate Finance, 2nd edition, Richard D. IrwinInc.,USA, 1993
2. Scott Besley and Brigham E. F., Essentials of Managerial
Finance, 14th edition, Thomson South-Western, USA, 2008.
3. Brigham, E.F. and Houston, J.F., Fundamentals of Financial
Management, 9th Edition, South-Western, USA, 2001.
4. Nevue, R.P., Fundamentals of Managerial Finance, 2nd
edition, South-Western Publishing Co., Ohio, 1985
5. Gitman, L.J., Principles of Managerial Finance, 12th edition,
Harper Collins, USA, 2009.
6. Petty & et. A., Basic Financial Management, 6th edition,
Prentice-Hall, Inc., 1993
Pass word
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