I have been in dilemma whether I should cover Accrual Accounting in Fundamental Analysis 101. Accrual Accounting can be very taxing for beginners, but Accrual Accounting is the fundamental and basis of the accounting used in companies. Many courses out there do not cover Accrual Accounting. It is like teaching you to punch without knowing how to use force of your core. While driving to Taiping in this morning, I decided to cover Accrual Accounting in the course.
The deciding point is mainly from my experience with the personal trainer in my gym training since few weeks ago. The personal trainer has been teaching me best practices and basic exercises on how to activate and use muscles, rather than asking me to run on a treadmill for 3 hours. He always emphasize that if you master the basic, you just have to do 1 hour workout two to three times a week, and 1 hour workout can effectively burn 3 days of fat. If compare to those don’t know the basic, 3 hours of running can only burn 1 day of fat.
Since I decided to do teaching, it is my responsibility to properly teach my students with necessary knowledge. If they can understand Accrual Accounting, they can understand 3 financial statements easily. One day, with their own efforts, they will be able to interprete financial statements of different companies in different industries.
Finance students probably take years to study and understand practical of Accrual Accounting. In Fundamental Analysis 101, I basically only have 8 hours of teaching. Therefore, I will use a simple illustration to teach basic of Accrual Accounting. I will include more details about Accrual Accounting in my handout, so the students can do some further studies on their leisure time. The challenge is I have to send handout to printing latest on the coming Wednesday. So, I only have 3 days to prepare this section. I think I can make it.