Boston College

MA89401 – Accounting Issues for Venture Capital Firms

Fall 2001

Professor: Peter J. DiCarlo

Campus Office: Fulton 528

Office Hours: Tuesdays, 6:00 p.m. to 7:00 p.m.,

or by appointment

Telephone: (617) 552-2405 or x24053

E-Mail: dicarlop@MAIL3.BC.EDU (BC)

pdicarlo@polarisventures.com (work)

Text and materials

Case Packet

Articles Packet

KPMG – Defining the Digital Future Business & Accounting Issues (KPMG)

E&Y – Financial Reporting Developmtents (E&Y-FRD)

E&Y – Internet Accounting Issues – A Summary January 2000 (E&Y-IAI)

PriceWaterhouseCoopers – Revenue Recognition (PWC)

Optional – Intermediate Accounting Text (Kieso & Weygant)

Advanced Accounting Text (Chapter on M&A)

Course Description
This course will expose students to various accounting issues that companies face during their early stages of development. It will focus on firms that are raising venture capital to fund development and growth. The course is designed to expand the students’ understanding of various accounting theories and apply them to the events and transactions that occur within these types of entities. The format will be lecture and case study.

Homework

I expect each class to be a discussion with participation from a majority of the class rather than a lecture. To accomplish this, you need to complete the required readings and problems each week. Also, you are responsible for a basic understanding of accounting concepts. To the extent you do not feel comfortable with any assignment, it is up to you either gain the understanding on your own or come see me for help.

Cases

I will grade three cases during the semester. The first will require a group presentation, and the other two will be written analyses. Specific details of the cases will be provided when assigned.

Project

During the semester, there will be one group project that will require a written analysis and presentation of your findings. The project entails applying the methods and concepts covered in class. Specific details of the project will be provided when assigned.

Grading

Your grades will be based on the following:

Tentative Class Schedule and Assignment Schedule

 

Topic

Required Assignments

     

Week 1

  • Introduction
  • Equity Financing -Preferred Stock

 

 

     

Week 2

  • Debt Financing
  • Secured Debt Transactions

Articles #1 & 2 (see Articles Listing Attached)

     

Week 3

  • Other Transactions in an Entity’s Stock
  • Metapath Software Presentation

KPMG - pg 51-60

E&Y-IAI pg 16-24

Metapath Software Case

     

Week 4

  • Metapath Software Presentation (cont’d)
  • Stock Options

Metapath Software Case

The FASB and Employee Stock Options Case (read only)

     

Week 5

  • Stock Options (cont’d)

E&Y-FRD– pg 7-19, 21-34, 36-42

Articles #3 through #6

     

Week 6

  • Yahoo! Case
  • Revenue Recognition

Yahoo! Case

PWC Guide

 

 

 

Topic

Required Assignments

Week 7

  • Revenue Recognition (cont’d)

PWC

KPMG pg 3-16,

E&Y-IAI pg 3-6,

Barter Industry Note

     

Week 8

  • Revenue Recognition (cont’d)

KPMG pg 25-35

Articles #7&8

     

Week 9

  • Reporting Income for Dot-coms Case

Reporting Income for Dot-coms Case

     

Week 10

  • Software Development Costs
  • M&A

Deloitte Presentation

Articles #9, 10, &12

     

Week 11

  • M&A
  • Goodwill

Articles #15,18, &19

     

Week 12

  • Broadcom & Warrants
  • New Accounting Approach

Articles #13 & 14

Articles #16 & 17

     

Week 13

IPO Process

Articles #20 through 23

     

Week 14

Project Presentations