Financial Reporting

Overview

Course code: COR1-GB 1306 61

The course is structured around the following major uses of accounting data by managers, financial analysts, consultants, and other professionals as described below:

• Keep a record of transactions to run the business. We will study the terms and systems accountants use to record transactions and ensure the accounting system's integrity. We will distinguish cash flows from income flows and study how financial statements are connected.
• Measure past performance to reward superior performance or penalize inferior performance: We will study how financial performance measures affect incentives and behavior and discuss the trade-off between relevance versus reliability of performance measures. We will examine some well-known cases of earnings management and fraud.
• Identify areas of strengths and weaknesses for making strategic decisions affecting the future: We will discuss a simple analytical framework (the DuPont model) that helps us compare companies and understand how their strategic choices affect their published financial statements.

Exams and Grading

• Please read about the penalty for missing classes below.

• As per Stern policy, no more than 35% of the class can be given an A or A-. If your overall score is more than 50%, you will not get C or below in the course. It is not possible to predict the A range.

• Assignments: 20%
• Midterm: 30%. Monday, JUNE 8, 2026, in class from 6-9 PM.
• Final: 50%. Monday, JUNE 29, 2026, in class from 6-9 PM.. The Final is cumulative and can replace the midterm if you score higher on the final. This option will NOT apply if you miss the midterm. Your aggregate score on the course that will form the basis of your letter grade is max(assignments*20%+midterm*30%+final*50%, assignments*20%+final*80%). The midterm will not replace the final.
• I do not give out grades for the midterm as it misleads students. Remember that the final exam is 50% of the grade, and one cannot predict the grade without the final.

Penalty for missing classes and unapproved use of devices in class

Paper and pencil

Please bring paper and pen/pencil to take notes in class.

Unapproved device usage

Most of us are now addicted to devices, which impedes learning. You are allowed to use devices only when I ask you to use your computer in class. Otherwise, ALL device use is strictly prohibited, unless you have a qualified disability which allows you to use devices in class. Students using devices when not approved will be asked to leave the classroom. Each time you are asked to leave the class, you will be marked absent. This is very painful, awkward, and disruptive, and I hope I never have to do this, but I will not hesitate to enforce this policy.

Reasons for requiring attendance

Attendance is required for several reasons. First, you incorrectly assume you can catch up on a missed class by watching a recording (if available). Videos do not engage your brain as much as a live class. Second, less than 20% of you watch the recording (if available). You are then lost in class, which provides the wrong signals to me as an instructor. Third, your absence hurts class discussions. Fourth, you miss out on feedback if you do not work through the questions I pose in class. Fifth, I lose the feedback since there are fewer questions.

Attendance policy enforced after the add/drop period

The attendance policy below will be in effect only after the add/drop period.

Attendance sheet

After entering the class, please mark yourself present on the OneDrive sheet within the first 20 minutes (link posted on Brightspace after the add/drop period). You will be marked absent if you are more than 20 minutes late, unless it is due to factors beyond your control (traffic, subway delays, or interviews running late). You will also be marked absent if you leave the class early unless you have my permission or get it afterward. You will get an F in the course if you are caught cheating on the attendance sheet.

Mark yourself excused on the attendance sheet for excused absences

Without mandatory attendance, attendance is often below 50%. Therefore, though I dislike doing this, I penalize absences. If you anticipate being absent for good reasons, please email me well in advance. Please enter Excused on the attendance sheet described below to avoid the penalty if approved. You must update it; I will not mark you excused. If you miss a class due to emergencies and cannot tell me in advance, do not panic. Take care of the emergency first, and then email me. I will permit you to change the Absent to Excused. But if you miss a class without a valid reason, there is a penalty, as stated below.

Penalty for missing classes

For sections meeting in 150-190 minute sessions, you will lose one grade (A to A-, A- to B+, B+ to B, B to B-, and so on) for EVERY missed session unless you were explicitly excused via email. Thus, if you miss two class sessions, you will lose two grades, and so on.

For sections meeting in 75-80 minute sessions, you will lose one grade (A to A-, A- to B+, B+ to B, B to B-, and so on) for EVERY TWO missed sessions unless you were explicitly excused via email. Thus, if you miss four class sessions, you will lose two grades, and so on.

Seating and name tags

Please sit in the same seat in every class and display your name tags. For Zoom classes, you must keep your video on AT ALL TIMES. You must also have a good working headset or mic, as it is extremely rude to be inaudible and force me to ask you to repeat yourself.

Almaris Assignments

• When and how to access the tests: After the first week of class, you can view the online assignments at https://www.almaris.com/assess/ using your official NYU email (no aliases) and the most recent password emailed to you by Almaris. The Almaris password is different from NYU or Stern passwords.
• Support: Almaris staff will reply to your emails only if they pertain to technical issues with the Almaris system, not deadline extensions. Please contact Stern IT for technical issues with your network.
• Password retrieval: To retrieve the password, use your full email with the domain name as it appears in Brightspace. The domain name could be @nyu.edu for some of you, while it could be @stern.nyu.edu for others. I do not control this mess.
• Length: Some assignments are short; others are long. Please manage your time.
• Deadlines: Almaris tests list the deadlines. I may update the deadlines as the course progresses.
• NO EXTENSIONS will be granted for any reason except medical or family emergencies. If you have religious or personal conflicts, please submit the assignments early. The related materials are covered well in advance of the assignments. Please do not email me to request extensions unless you have a medical or family emergency.
• Late: Assignments are marked LATE if you do not meet or exceed the passing score described below before the deadline. There is no additional penalty for lateness other than a low score.
• Passing score: Assignments have a passing score of 100% or less.
  • Passing score 100%: I set the passing score to 100% on an assignment if I want you to ace it. In reality, there is no passing score. Whatever score you get on your last attempt is your final score. You are graded on accuracy but not the number of attempts. There is a difference between passing a test and getting full credit. If you get 80/100 on your final attempt, you pass, but you do not score 100.
  • Passing score less than 100%: I set the passing score to less than 100% on an assignment if I do not require you to ace it. Any score above that score is rounded up to 100%. For example, if the passing score is 90%, and you get 93%, your score is rounded up to 100%. I do the rounding up in a separate spreadsheet. You will see only the raw score online.
• Free to you and NYU: Almaris is not affiliated with Stern in any way. It is offering these tests to Stern at no charge.
• Data privacy and no marketing: Your data is not shared with any third party. It is not used for any promotion or marketing.
• No data retention: Your data is not retained. It is deleted in approximately two weeks after the end of the course.

Almaris Exams

• Please log in to Almaris as soon as you receive these instructions via email. You will see inactive links to your exams and instructions.
• Unless communicated to you differently in class, the midterm exam covers topics covered until the midterm, and the final exam covers the entire course.
• The instructions at the top of the login screen will tell you how many parts the exam has and their weights.
• Please report any problems such as wrong deadlines or missing parts of the exam to me immediately.
• Log in to Almaris right before your exam. Refresh your screen to see active links for the exam.
• Your final score on each part of the exam will be max(score1, score2 - 7, score3 - 14, score4 - 21, score5 - 28).
• You must answer all questions without help from another student or anyone else. Any such communication will be construed as cheating. If the exam is online, email your questions to the TA AND me. Whichever one of us reads the message first will respond. If the exam is held in class, you can ask the proctor.
• If the exam is online, please keep your email open during the exam and check it periodically. Any updates/corrections will be sent via email.
• Manage your time. Extra time will NOT be allowed.
• If you want us to grade your incomplete or incorrect spreadsheet manually, submit it within FIVE MINUTES of the end of the exam. Do not email it; look for Assignment on NYU Brightspace. If you submit the spreadsheet for manual grading, you will be considered to have used up your five attempts. Therefore, your maximum score on that spreadsheet can only be 72/100 due to the penalty for multiple attempts.

Important computer tips for the final

• DO NOT WORK ON A SPREADSHEET WITHIN A BROWSER. Save the spreadsheet to your computer, work on it, and save it periodically. If you navigate away from the spreadsheet in a browser, ALL YOUR WORK WILL BE LOST.
• Organize your computer files and designate a directory to save your exam files.
• Restart your computer before the exam to minimize problems.
• Bring an external mouse with a scroll wheel to speed up test-taking. Do not waste time using the trackpad or the internal mouse.
• Maximize screen space by hiding the Excel ribbon and browser menus. The more the screen you see, the faster and more accurate you are.
• Bring a computer with as big a screen as possible.
• Do not use an unfamiliar computer.

NYU Stern Policies

Please read the NYU Stern Policies for this course.

Help and Office

• Me: dgode@stern.nyu.edu, 212-998-0021, Office: KMC 10-86.
• Teaching assistant: Please check NYU Brightspace.

Administrative and System Requirements

Videotaping

Classes are normally not videotaped, except for EMBA classes. If the class is videotaped, the link is posted to Brightspace by NYU Stern IT within a day.

Registered Students Only

Only registered students can attend classes. I cannot override this NYU Stern rule. We do not allow unregistered students to "audit" a class.

Albert and NYU Brightspace

You must be in Albert and NYU Brightspace before starting the first class. If you register late, there might be a delay of a day before you appear in these systems. If you cannot access these systems after a day, please contact the relevant REGISTRAR. I cannot add you to these systems regardless of what someone in IT tells you.

Computer Requirements

You need to bring a computer to every class. If you have any technical questions, please contact Stern IT at (212-998-0180) or servicedesk@stern.nyu.edu, or NYU IT at +1 (212) 998-3333 or askit@nyu.edu. I cannot help you with your computer issues.

Excel 365 Desktop Version Required

The desktop version of Excel 365 is required. Excel Online and Google Sheets are NOT OK. Read this page regarding Excel 365 Desktop access for NYU students.

Materials

• I use my materials. Therefore, no textbook is required, and you need not purchase anything.

Schedule

See Midterm and Final dates in the Grading section above.

Schedule

Session	Topic
1	Accounting terms: entity concept, monetary unit concept, stocks versus flows, the four financial statements
2	Performance measures: Cash flows versus income flows; design of incentive systems
3	Relationships between the three financial statements
4	Accounting systems: Double entry bookkeeping
5	When revenues lead receipts: Accrued revenues or receivables --Transactions, ratios, and projections
6	When revenues lag receipts: Deferred revenues or advances -- Transactions, ratios, and projections
7	When expenses lead payments: Accrued expenses or payables -- Transactions, ratios, and projections
8	When expenses lag payments: Deferred expenses or prepayments -- Transactions, ratios, and projections
9	Permanent differences between cash flows and income flows due to financing -- Transactions, ratios, and projections
10	The complete accounting cycle
11	Examples: Inventories and Payables -- Transactions, ratios, and projections; cost flow assumptions -- LIFO versus FIFO
12	Examples: Property, Plant, and Equipment -- Transactions, ratios, and projections; investing versus operating activities
13	Midterm exam
14	Time value of money: When cash flows stretch over time
15	Mortgages and bonds
16	Understanding why a business needs financing Debt financing
17	Equity financing:
18	Handling uncertainty: Allowances and reserves as liabilities
19	Handling uncertainty: Allowances and reserves as contra-assets
20	Key financial statement ratios
21	When managers manipulate statements; A different perspective on understanding the links between the three major statements
22	Mergers and acquisitions
23 and 24	Final exam