The rationale behind every module is to offer the student all possible knowledge in each module of the course, in order to be able to deepen their understanding and render them capable of practically applying it. Advance Accounting Theory teaches students of the historical theory formulation and standard setting and how definitions in the conceptual framework apply to controversial accounting areas such accounting for income determination, cash flows, assets, liabilities, fair market values, pensions and other postretirement benefits and stock options.

After completion of the course students are expected to be able to:
Demonstrate the link between standard setting and theory formulation. Discuss the purpose of accounting theory, the approaches to theory formulation and explain the needs of a standard setting body (the Accounting Principles Board and the contents of its ARS1 and ARS3.
Explain and evaluate the content of ASOBAT and compare it to ARS1 and ARS 3. Explain the new tripartite structure of standard setting and the mission of each part. Comprehend the new view of accounting.
Explain the FASB’s due process the forms of politics that affect it. Discuss the SATTA conclusions and contrast them to previous accounting theory formulations. Explain the positive approach to accounting theory.
Discuss the contents of the conceptual framework. Explain the current situation of the FASB and its competition, domestic and international.
Explain the nature of income, including comprehensive income and distinguish between the matching and the asset-liability approaches to calculating income.
Discuss the definition of an asset and contrast the different values at which assets can be measured.
Discuss the importance of cash flows, prepare a cash flow statement and analyze and interpret cash flow ratios.
Discuss the importance of liabilities and the difficulty in properly defining them. Apply the definition to various accounting situations.
Discuss the difficulty in setting accounting standards for allocating income taxes and distinguish between the cash and allocation approaches to income tax.
Explain the nature of pensions, the parties involved and the accounting issues associated with pensions. Discuss the conflict between the present and future liability for pensions and describe the similarities and differences between pensions and OPEB.
Discuss the advantages and disadvantages of historical cost, how current market values came into use and how the FASB applied the mark to market accounting to marketable securities, stock options and derivatives. Explain the criticisms for current values.
Explain what is accounting disclosure, its role in accounting and describe the FASB’s Business Reporting Research Project.