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NYU Stern School of Business

Undergraduate College


Fall 2010

Instructor Details

Zarowin, Paul


Tu, Th 12:00 - 2:00

KMEC 10-74

There is no formal teaching fellow. Please see Prof. Zarowin during office hours, if you have any questions.


Course Meetings

TR, 3:30pm to 4:45pm

KMC 4-80

Final Exam: data and time TBA

Schedule exceptions
    Class will not meet on:
    Class will meet on:


Course Description and Learning Goals

The course will cover an in depth examination of financial report disclosures, with an emphasis on how firms use financial reporting to achieve such ends as managing earnings or keeping debt off of the balance sheet. By the end of the course, students will have an appreciation for what information is missing from the primary financial statements, the knowledge to understand the content of important footnotes, and the tools to conduct financial analyses using the information contained therein. The course will use a combination of textbook problems, Harvard cases, and most importantly, actual financial report disclosures. The course is geared for students going into public accounting, investment banking, equity research, or consulting.


Course Pre-Requisites

For Graduate Students: Core course in Financial Accounting (Financial Statement Analysis is helpful, but not required)


For Undergraduate Students: Financial Statement Analysis


Course Outline

                                  Tuesday                                                           Thursday           


Week of (#’s are chapter #’s):

Sept. 7 Income Statement, Earnings Management,            no class – Rosh Hashanah

            Accounting Changes 1, 2(65-85), 3(143-157), 7


Sept. 14   Receivables 8(except 437-443)                          Receivables, cont’d                                                



Sept. 21   Inventories 9(+ App. C)                                     Inventories, cont’d 



Sept. 28   Inventories, cont’d                                             Liabilities 11(except 629-649)

                                                                                                            15 (908-913)



Oct. 5      Off-B/S Liabilities                                             Off-B/S Liabilities, cont’d

            11(629-631), 16(945-950)



Oct. 12    Off-B/S Liabilities, cont’d                                 Leases 12                                  



Oct. 19      Leases, cont’d                                                       Leases, cont’d                                                                 



Oct. 26       Midterm exam, thru Off-B/S Liabilities               Taxes 13                                                



Nov. 2        Taxes, cont’d                                                         Taxes, cont’d                          



Nov. 9       Pensions 14                                                           Pensions, cont’d



Nov. 16     Pensions, cont’d                                                    no class - Thanksgiving



Nov. 23     Pensions, cont’d                                                    Pensions, cont’d



Nov. 30     Pensions, cont’d                                                    EPS 15 (873-894)



Dec. 7        EPS, cont’d                                        Executive Compensation 15(895-908)



Dec. 14      Review                                                                  Review



Final Exam: date and time TBA


Required Course Materials

course materials

1. The course text is Financial Reporting and Analysis, by Lawrence Revsine, Daniel W. Collins, and Bruce Johnson (Prentice Hall), 4th Edition. I refer to the text as RCJ. The text is recommended; it is not required.


All other course materials are contained on the course’s Blackboard site.


2. Powerpoint slides, examples of financial statements, and articles from the popular press can be found on the course’s Blackboard site under Course Documents, organized by topic.


3. Solutions to all RCJ problems can also be found on the course’s Blackboard site under Assignments.


4. Problems from RCJ that will be assigned for homework can be found on the course’s Blackboard site under Assignments.




Assessment Components

Grading and assignments

Grading is as follows: Midterm 2/7ths, Mini-Cases 2/7ths, Final 3/7ths. Class participation will be then be taken into consideration to adjust grades where appropriate. The midterm and final are both in-class, open book and open note.

The cases are take-home mini-cases or quizzes (approx. one page) on each topic that we cover (i.e., dealing with a specific disclosure). They will be handed out on Thursday, and due the following Tuesday, and must be done individually.





Group Projects

Guidelines for Group Projects

Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.

Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole:   its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.

It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.

You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.



Grading is as follows: Midterm 2/7ths, Mini-Cases 2/7ths, Final 3/7ths. Class participation will be then be taken into consideration to adjust grades where appropriate. There is no set curve for the course.


Professional Responsibilities For This Course


  • Class attendance is essential to your success in this course and is part of your grade. An excused absence can only be granted in cases of serious illness, grave family emergencies, or religious observance and must be documented. Job interviews and incompatible travel plans are considered unexcused absences. Where possible, please notify me in advance of an excused absence.



In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:

  • Providing strong evidence of having thought through the material.
  • Advancing the discussion by contributing insightful comments and questions.
  • Listening attentively in class.
  • Demonstrating interest in your peers' comments, questions, and presentations.
  • Giving constructive feedback to your peers when appropriate.



  • Late assignments will either not be accepted or will incur a grade penalty unless due to documented serious illness or family emergency. Exceptions to this policy for reasons of religious observance or civic obligation will only be made available when the assignment cannot reasonably be completed prior to the due date and you make arrangements for late submission in advance.


Classroom Norms

  • Arrive to class on time and stay to the end of the class period. Chronically arriving late or leaving class early is unprofessional and disruptive to the entire class.  Repeated tardiness will have an impact on your grade.
  • Turn off all electronic devices prior to the start of class. Laptops, cell phones and other electronic devices are a distraction to everyone.


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

  • Exercise integrity in all aspects of one's academic work including, but not limited to, the preparation and completion of exams, papers and all other course requirements by not engaging in any method or means that provides an unfair advantage.
  • Clearly acknowledge the work and efforts of others when submitting written work as one’s own. Ideas, data, direct quotations (which should be designated with quotation marks), paraphrasing, creative expression, or any other incorporation of the work of others should be fully referenced. 
  • Refrain from behaving in ways that knowingly support, assist, or in any way attempt to enable another person to engage in any violation of the Code of Conduct. Our support also includes reporting any observed violations of this Code of Conduct or other School and University policies that are deemed to adversely affect the NYU Stern community.

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


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