Accounting for Banking syllabus
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Accounting for Banking
12 units
1 Introduction (4 LHs)
- Concept of bank account
- Accounting assumptions, principles and conventions
- Evolution of banking industry, Development of banking industry in Nepal
- Banks
- Types of Banks
- Opportunities and Challenges of Nepalese Banking Sector
- Legal provisions under Banking and Financial Institutions Act (BAFIA), 2063
- Unified directives issued by Nepal Rastra Bank
- Concept and importance of GAAP
3 Accounting for Guarantee and Margin Deposit (3 LHs)
6 Accounting for Credit and Advances (3 LHs)
- Credit
- Evaluation of feasibility study
- Industry risk analysis and Business risk analysis (using six C’s of credit)
- Accounting treatment of different types of credit
- Loan processing charges, interest and commission and their accounting treatment
- Collection and recovery of loans method applied and accounting treatment
- Credit risk management
8 Banking Technology Products (2 LHs)
9 Concept of BASEL Framework (2 LHs)
10 Anti Money Laundering (AML) (2 LHs)
11 Preparation of Financial Statements under NFRS (12 LHs)
- Bank reconciliation
- Trail balance
- Transaction list verification and operational procedures
- Statement of profit and loss and other comprehensive income (Income statement)
- Statement of financial position/balance sheet
- Statement of cash flow statement
- Statement of changes in equity
- Disclosures required for Financial Statement
12 Financial Statements Analysis (8 LHs)
1. Introduction (4 LHs)
- Concept of bank account
- Concept of bank account
- Accounting assumptions, principles and conventions
- Accounting assumptions, principles and conventions
- Evolution of banking industry, Development of banking industry in Nepal
- Evolution of banking industry, Development of banking industry in Nepal
- Banks
- Banks: Meaning, nature, objectives, importance and functions of banks
- Types of Banks
- Types of Banks: Central Bank, Commercial Banks, Development Banks, Financial Institutions, Micro Finance Institutions and Co-operative Banks
- Opportunities and Challenges of Nepalese Banking Sector
- Opportunities and Challenges of Nepalese Banking Sector
- Legal provisions under Banking and Financial Institutions Act (BAFIA), 2063
- Legal provisions under Banking and Financial Institutions Act (BAFIA), 2063
- Unified directives issued by Nepal Rastra Bank
- Unified directives issued by Nepal Rastra Bank
- Concept and importance of GAAP
- Concept and importance of GAAP, Nepalese Accounting Standards (NAS), International Accounting Standards (IAS), Nepal Financial Reporting Standard (NFRS) and International Financial Reporting Standard (IFRS), Relative aspects of NAS, IAS, NFRS and IFRS.
2. Accounting for Deposit (3 LHs)
- Account Opening, operations and closure of bank account
- Account Opening, operations and closure of bank account
- Concept and types of deposit
- Concept and types of deposit: current, saving, time or fixed account, hybrid or flexi deposit, calls deposit account, margin account, foreign currency account, special foreign currency account
- Process of opening accounts
- Process of opening accounts
- Inter bank borrowing from other banks and short term borrowing from NRB
- Inter bank borrowing from other banks and short term borrowing from NRB
- Substitutes for vouchers
- Substitutes for vouchers: pay in slip and its meaning
- Cheques
- Cheques: meaning and types of cheques
- Electronic cheque clearing (ECC)
- Electronic cheque clearing (ECC).
3. Accounting for Guarantee and Margin Deposit (3 LHs)
- Guarantee
- Guarantee: Concept, needs and types of guarantee: Bid bond, Performance bond, Advance payment guarantee, Counter guarantee, Financial guarantee, Standby letter of credit, Bonded warehouse guarantee
- Accounting treatment of guarantee issue (voucher and ledger)
- Accounting treatment of guarantee issue (voucher and ledger)
- Margin deposit
- Margin deposit: concept, process and evaluation
- Service charges and accounting treatment
- Service charges and accounting treatment.
4. Letter of Credit (LC) (3 LHs)
- Letter of credit
- Letter of credit: concept, needs and types of LC
- Parties involved in LC
- Parties involved in LC
- Documents in LC
- Trade finance
- International Chambers of Commerce and Universal Custom and Practices
- International Chambers of Commerce and Universal Custom and Practices (UCP) for documenting credit
- NRB regulations for LC
- NRB regulations for LC
- Accounting treatment
- Accounting treatment.
5. Accounting for Remittance (3 LHs)
- Remittance
- Remittance: concept, importance and types
- Services rendered by remittance
- Services rendered by remittance
- Parties involved in remittance
- Parties involved in remittance
- Demand draft, accounting for advice received and un-received demand draft
- Demand draft, accounting for advice received and un-received demand draft
- Account payee draft
- Books of original entry for advice received and un- received
- Books of original entry for advice received and un- received
- Telegraphic transfer and mail transfer
- Telegraphic transfer and mail transfer
- Branch reconciliation
- Branch reconciliation.
6. Accounting for Credit and Advances (3 LHs)
- Credit
- Credit: Concepts, importance and types: Cash credit, Overdraft, Secured loan, Micro credit, and other loans: auto, home, credit card, education and social
- Evaluation of feasibility study
- Evaluation of feasibility study
- Industry risk analysis and Business risk analysis (using six C’s of credit)
- Industry risk analysis and Business risk analysis (using six C’s of credit)
- Accounting treatment of different types of credit
- Accounting treatment of different types of credit
- Loan processing charges, interest and commission and their accounting treatment
- Loan processing charges, interest and commission and their accounting treatment
- Collection and recovery of loans method applied and accounting treatment
- Collection and recovery of loans method applied and accounting treatment
- Credit risk management
- Credit risk management
- Credit creation.
7. Accounting for Treasury Management (3 LHs)
- Concept of treasury management
- Concept of treasury management
- Dimensions of treasury management
- Dimensions of treasury management
- Market risk management
- Market risk management
- Liquidity management
- Liquidity management
- Investment portfolio management
- Investment portfolio management
- Foreign exchange risk management
- Foreign exchange risk management
- Assets and liabilities management
- Assets and liabilities management
- Maintenance of agency ledger (NOSTRO and VOSTRO)
- Maintenance of agency ledger (NOSTRO and VOSTRO).
8. Banking Technology Products (2 LHs)
- Banking software
- Banking software
- Card operation
- Tele banking
- Mobile banking
- Internet banking and e banking
- Internet banking and e banking
- SWIFT (Society for Worldwide Interbank Financial Telecommunication)
- SWIFT (Society for Worldwide Interbank Financial Telecommunication)
- Branchless banking.
9. Concept of BASEL Framework (2 LHs)
- Concept and importance
- Concept and importance
- Principles of capital measurement and capital standard
- Principles of capital measurement and capital standard.
10. Anti Money Laundering (AML) (2 LHs)
- Concept, importance and AML Act
- Concept, importance and AML Act
- Know your customers (KYC)
- Know your customers (KYC).
11. Preparation of Financial Statements under NFRS (12 LHs)
- Bank reconciliation
- Bank reconciliation: concept, needs and preparation of BRS
- Trail balance
- Trail balance: concept, needs and preparation
- Transaction list verification and operational procedures
- Transaction list verification and operational procedures
- Statement of profit and loss and other comprehensive income (Income statement)
- Statement of profit and loss and other comprehensive income (Income statement)
- Statement of financial position/balance sheet
- Statement of financial position/balance sheet
- Statement of cash flow statement
- Statement of cash flow statement
- Statement of changes in equity
- Statement of changes in equity
- Disclosures required for Financial Statement
- Disclosures required for Financial Statement.
12. Financial Statements Analysis (8 LHs)
- Concepts and importance
- Concepts and importance
- Ratio Analysis
- Ratio Analysis: concept, importance and limitations
- Types of ratios
- Types of ratios: Profitability ratios: Net interest income growth (NII growth), Operating profit growth
- Shareholder ratios
- Shareholder ratios: Return on equity, Return on assets, Earning per share, Price earnings ratio, Market price per share
- Liquidity ratios
- Liquidity ratios: Net liquid assets, Net liquidity ratios, Statutory liquidity ratio (SLR), Cash reserve ratio (CRR)
- Activity ratios
- Activity ratios: Cost of fund, Base rate, Credit deposit ratio
- Staff efficiency (per employee income, per employee business i.e. deposit plus loan)
- Staff efficiency (per employee income, per employee business i.e. deposit plus loan)
- Gearing and Financial ratios
- Gearing and Financial ratios: Total borrowing to shareholder fund, Total assets growth, Net worth growth
- Cash Flow ratios
- Cash Flow ratios: Interest coverage ratio, Debt coverage ratio
- Assets Quality ratios
- Assets Quality ratios: Non-performing loans to total loans, Loan loss reserves to gross loan
- Earnings ratios
- Earnings ratios: Net interest margin
- Capital Adequacy ratios
- Capital Adequacy ratios: Capital fund as a percentage of risk weighted assets.