Accounting for Financial Services


1. The Basics of Business Accounting

• Accounting – definition and core concepts

• Business transactions and its classifications

• Accounting and its functional objectives

• The business entity concept and how it differs from legal entity concept

• Business activities:

i. Operating

ii. Investing

iii. Financing activities

• The basic accounting equation

• Introduction to Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IFRS)

• Introduction to financial statements

i. Balance Sheet

ii. Income Statement

iii. Cash Flow Statement

iv. Comprehensive Income statement

v. Change in equity statement

• Elements of financial statements and their classifications

• How financial statements for banks are different than those of companies

• Financial statements and business decisions

• Tangible and Intangible assets

• Accounting for consolidation

2. Accounting for Financial Institutions

• Banking assets and liabilities

• Banking revenue and expenditure items

• Contingent and off balance sheet items

• Capital requirements for commercial banks

3. Accounting Data Processing

• Trial Balance, format and uses

• The need for adjusting accounts

• Time period concepts and revenue recognition principles

• Major types of adjusting entries

i. Accruals

ii. Prepayments

iii. Advance receipts and payments

• Major types of adjusting entries

i. Merchandise inventories

ii. Bad debts

iii. Depreciation and amortization

• Adjusted trial balance

• Preparing financial statements from adjusted trial balance

• Introduction to worksheet

• Closing process through “expense and revenue summary account”

• Post closing trial balance

i. Contents

ii. Uses

4. Receivables

• Creation of accounts receivable

• Collection of receivable

• Valuation of account

• Estimation of bad debts

• Aging of accounts receivable

• Writing off and recoveries

• Notes receivables

• Presentation on financial statements

5. Provisioning process

• Importance

6. Accounting for Fixed Assets

• Acquisition of fixed assets

• Depreciation methods and their effects on financial statements

• Intangibles and natural resources – simple accounting appreciation

• Typical issues related to tangible and intangible fixed assets

• Revaluations in fixed assets

7. Understanding Financial Statements

• Profit and loss statement

• Balance sheet

• Cash flow statement

• Statement of equity

• Critical elements to ascertain health of the enterprises

• Understanding notes attached to financial statements

8. Investments

• Accounting classifications

i. Held for Trading

ii. Available for Sale

iii. Held Till Maturity

• Standards relating to accounting classifications

• Balance sheet presentation and treatment

• Income statement presentation and treatment

9. Analysis of Financial Statement

• Horizontal and vertical analysis

• Financial ratios including cash flow ratios (Bank financial statement analysis)

• Interpretations and applications of financial ratios in banking decisions


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