BA302 - Accounting Theory

Credit Points: 15 credit points

Workload: 36 hours

Prerequisite: BA214 Corporate Accounting

Co-requisite: N/A

Aims & Objectives

This is a third-year Core Unit in the Bachelor of Business, major in Accounting, and offered as an Elective Unit in the Bachelor of Business Marketing, and Bachelor of Business Management. For Course Learning Outcomes and further information relating to Bachelor of Business programs please visit our website:

This unit provides students with the understanding of some of the major contemporary issues in accounting. Upon completion of this unit, students are expected to be able to explain why particular accounting procedures and policies are commonly adopted and why certain accounting choices are made by the corporate management. This unit also enables students to enter debates on trends within financial reporting and accounting in general. It presents the Conceptual Framework in detail, and facilitates students to develop the capability to critically evaluate the accounting practices adopted by corporations from a social and ethical perspective.
Unit topics include:

  • Accounting regulation and the conceptual framework 
  • Application of accounting theory 
  • Fair value measurement
  • Related party disclosures
  • The Presentation of Financial Statements
  • Accounting policies and other disclosures
  • Employee benefits
  • Property, Plant and Equipment, leases
  • Revenue recognition
  • Sustainability and corporate social responsibility reporting

Learning Outcomes

The Course learning outcomes applicable to this unit are listed on the Melbourne Institute of Technology’s website:
At the completion of this unit students should be able to:
a. Describe the financial accounting standard setting process of Australia.
b. Discuss current issues and developments in accounting theory and financial reporting.
c. Evaluate different accounting theories and their implication in policy choice by managers.
d. Explain the Conceptual Framework and apply it to accounting activities, and identify strategies to meet accounting issues and problems.
e. Develop an ethical and social perspective on the use of accounting information.


Assessment Task Due Date A B Unit Learning Outcomes
1. Formative Assessment Week 3 - 5% a
2. Contribution and Participation Weeks 1-12 - 5% a-e
3. Assignment [Individual] Week 7 - 20% a,b
4. Assignment [Group] Week 10 20% - c,d,e
5. Case Study Analysis [3 hours] TBA - 50% b-e
TOTALS   20% 80%  

Task Type: Type A: unsupervised, Type B: supervised.

Contribution and Participation (5%)

This unit has class participation as an assessment. The assessment task and marking rubric will follow the Guidelines on Assessing Class Participation ( Further details will be provided in the assessment specification on the type of assessment tasks and the marking rubrics.

Teaching Methods

NOTE: All School of Business units 3-hour workshops Flipped Classroom Mode. 

Textbook and Reference Materials

Note: Students are required to purchase the prescribed text book and have it available each week in class.

Prescribed Text Book

  • Loftus, J., Leo, K., Boys, N., Daniliuc, S., Luke, B., Hong, A., & Byrnes, K., (2020). Financial Reporting, 3rd  edition. Australia: Wiley.

Other recommended references

  • Henderson, S., Peirson, G., and Herbohn, K. F., Ramsay, A & Borg, V. (2017). Issues in Financial Accounting, 16th edition. Frenchs Forest, NSW: Pearson Prentice-Hall.
  • Picker, R., Clark, K., Dunn, J., Kolitz, D., Livne, G., Loftus, J., & van der Tas, L., (2016). Applying IFRS Standards, 4th edition. Australia: Wiley.
  • Deegan, C. (2016). Australian Financial Accounting, 8th edition. Sydney, NSW, McGraw-Hill.

Journal Articles

  • Giner, B., & Pardo, F. (2018). The Value Relevance of Operating Lease Liabilities: Economic Effects of IFRS 16. Australian Accounting Review, 28(4), 496-511.
  • Kabir, H., & Rahman, A. (2018). How Does the IASB Use the Conceptual Framework in Developing IFRSs? An Examination of the Development of IFRS 16 Leases. Journal of Financial Reporting.
  • Malikov, K., Manson, S., & Coakley, J. (2018). Earnings management using classification shifting of revenues. The British Accounting Review, 50(3), 291-305.
  • Lyons, B., & Barbara Tarasovich CPA, C. G. M. A. (2018). THE NEW REVENUE RECOGNITION RULES. Strategic Finance, 100(6), 36-45.
  • Barker, R., & Teixeira, A. (2018). Gaps in the IFRS conceptual framework. Accounting in Europe, 15(2), 153-166.

Accounting standards

Adopted Reference Style: APA can be found in MIT library referencing
The Referencing style for this using is APA: See the MIT Library Referencing webpage: and the Unit Moodle page for additional referencing support material and weblinks.

Graduate Attributes

MIT is committed to ensure the course is current, practical and relevant so that graduates are “work ready” and equipped for life-long learning. In order to accomplish this, the MIT Graduate Attributes identify the required knowledge, skills and attributes that prepare students for the industry.
The level to which Graduate Attributes covered in this unit are as follows:

Ability to communicate Independent and Lifelong Learning Ethics Analytical and Problem Solving Cultural and Global Awareness Team work Specialist knowledge of a field of study


Levels of attainment Extent covered
The attribute is covered by theory and practice, and addressed by assessed activities in which the students always play an active role, e.g. workshops, lab submissions, assignments, demonstrations, tests, examinations.
The attribute is covered by theory or practice, and addressed by assessed activities in which the students mostly play an active role, e.g. discussions, reading, intepreting documents, tests, examinations.
The attribute is discussed in theory or practice; it is addressed by assessed activities in which the students may play an active role, e.g. lectures and discussions, reading, interpretation, workshops, presentations.
The attribute is presented as a side issue in theory or practice; it is not specifically assessed, but it is addressed by activities such as lectures or tutorials.
The attribute is not considered, there is no theory or practice or activities associated with this attribute.