ACC40960 Accounting/FSA for Aviation

Academic Year 2020/2021

Financial statements, in conjunction with other financial and non-financial data, are used to assess the credit risk of an airline by the aircraft leasing industry. This module develops the student's ability to analyse financial statements in the context of the aviation industry and assess an airline s credit risk, in the following ways:

Accounting Analysis
Interpreting the information reported in financial statements requires an understanding of the policies and judgements that were used in their preparation. This module aims to develop the students knowledge of the policies and judgements that are significant in the aviation industry and enable them to assess how well financial statements reflect economic reality.

Financial Analysis
This module will provide analytical tools to evaluate economic relationships in the airline s financial statements and to analyse the performance and prospects of the firm.

Credit Risk Analysis
The module will develop the student s ability to use financial statements to analyse an airline s ability to meet its commitments and to repay its debts. Students will analyse the airline s credit risk in the context of its strategy, performance, risks and prospects.

Bloomberg
This module will develop student s ability to use the Bloomberg data service to analyse airline performance and credit risk.
By the end of the module students should be able to understand, analyse and use financial statements for credit risk assessment in the aviation industry.

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Curricular information is subject to change

Learning Outcomes:

Part 1 Introduction to Financial Statements in the Aviation Industry
After completing this part of the module, a student should be able to:
- navigate the income statement, balance sheet and cash flow statement.
- explain how the financial statements are connected by the accounting equation.
- describe the impact of accrual accounting on the financial statements.
- identify and source information about airlines from financial statements, Bloomberg and other sources.

Part 2 Accounting Analysis in the Aviation Industry
After completing this part of the module, a student should be able to:
- identify the critical accounting policies and assumptions that are applied in preparing an airline s financial statements.
- understand the implications of accounting policies for the airline s financial statements.
- Explain and calculate (for basic cases) how leases are reflected in the financial statements of both lessors and lessees.
- understand from a user s perspective how fuel price and foreign exchange derivatives are reflected in the financial statements of airlines.
- review a set of financial statements and identify issues that may impact on the analysis of the information in those statements.

Part 3 Financial Analysis and Forecasting in the Aviation Industry
After completing this part of the module, a student should be able to:
- prepare and analyse common size statements and trend analysis statements, evaluate the costs, profitability? and return of an airline.
- analyse the operating statistics of an airline.
- forecast an airline's income statement and balance sheet.

Part 4 Credit Risk Analysis in the Aviation Industry After completing this part of the module, a student should be able to:
- evaluate the liquidity and leverage of an airline.
- describe how credit rating agencies assess credit risk.
- describe the quantitative models of distress and bankruptcy.
- explain the importance of credit-risk analysis in the aircraft leasing industry.
- prepare and document evidence on key strategic questions about an airline combining accounting analysis, financial analysis and other information.
- form an opinion on the credit risk of an organization in the aviation industry using financial statements and other financial and non-financial data

Student Effort Type Hours
Lectures

24

Small Group

1

Autonomous Student Learning

86

Total

111

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade
Project: Financial Analysis Project on an Airline of the student's choice. Throughout the Trimester n/a Graded No

100


Carry forward of passed components
Yes
 
Resit In Terminal Exam
Spring No
Feedback Strategy/Strategies

• Feedback individually to students, on an activity or draft prior to summative assessment

How will my Feedback be Delivered?

Not yet recorded.

Name Role
Professor Gerardine Doyle Lecturer / Co-Lecturer
Autumn
       
Lecture Offering 1 Week(s) - Autumn: Weeks 7-12 Tues 09:00 - 10:20 Online
Lecture Offering 1 Week(s) - Autumn: Weeks 7-12 Tues 11:00 - 12:20 Online
Autumn
       

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