Removing the Silos: An Integrated Approach to Teaching Tax and Financial Accounting

• In Event: Teaching, Learning, and Curriculum II

Abstract

Our paper demonstrates how we tear down single subject silos in two advanced senior-level courses and replace them with a dynamic integrated curriculum with the intent of developing practices that foster deep learning and emphasize life-long learning skills. We present two cases that we have successfully designed and implemented to integrate the topics of tax and financial accounting in a more realistic context than the typical textbook allows. The longitudinal nature of the cases allows us to introduce topics in relatively simple settings and then expand on them in more complex settings, in addition to adding new topics progressively as companies would normally encounter them in the life-cycle of a typical business. The integration aspect requires students to consider both tax and financial accounting consequences of transactions and events in the life-cycle of corporations and partnerships. Finally, using cases allows more freedom to emphasize research of the FASB codification and income tax law and the development of soft skills such as memo writing, client interviewing techniques, issue identification, and information needs assessment.

The first case we present is the “JL Case,” which is used to contrast and compare partnership and corporate accounting and tax issues. This case provides the base curriculum for our Single-Entity Financial Accounting and Tax Planning course. The content of this class includes partnership accounting concepts as well as advanced tax planning concepts for both corporations and partnerships, including entity formation, distributions to owners, and liquidation. Specifically, students must determine the financial accounting and tax consequences for the firm’s formation year, an operations year, and for several years of planned distribution of profits.

The second case we present is the “Court Corporation Case,” which provides the base curriculum for our Multiple-Entity Financial Accounting and Tax Planning capstone course. The first eight parts of this twelve-part case ignore income taxes so students can concentrate on the consolidation concepts addressed. Starting with part nine, students analyze the tax and cash flow consequences of acquiring a subsidiary to determine the best way to acquire the target organization. They then account for the acquisition of the subsidiary and proceed through the same set of transactions encountered previously, but this time including any tax ramifications of the transactions. Each “year” concludes with the preparation of consolidated financial statements including appropriate note disclosures. The case also covers foreign currency transactions and translation.

Authors

• Connie Esmond-Kiger, Ohio University

• E Ann Gabriel, Ohio University

• Ray G Stephens, Ohio University

• Toby Stock, Ohio University