Intermediate Financial Accounting II

Course Description

ACG3113 – Intermediate Financial Accounting II is a 3-credit upper-division continuation of Intermediate I, completing the financial reporting sequence: the liability and equity side of the balance sheet, the complex measurement areas, and the statement of cash flows in depth. Florida also carries this course as ACG3111 at many institutions — see the numbering note below.

If Intermediate I is where accounting majors are separated, Intermediate II is where the survivors encounter the areas that are genuinely hard rather than merely voluminous. Deferred taxes, pensions, and leases are conceptually difficult, mechanically intricate, and consistently reported by students and CPA candidates as the most challenging material in the undergraduate curriculum. They are also areas where the accounting standard genuinely changed in recent years, which means older materials mislead.

Content covers current liabilities and contingencies — recognition, measurement, and disclosure of loss contingencies; long-term debt — bonds payable, issuance at premium and discount, effective interest amortization, extinguishment, and troubled debt restructuring; leases — the ASC 842 model, finance and operating classification, lessee and lessor accounting, and the right-of-use asset; income taxes — temporary and permanent differences, deferred tax assets and liabilities, valuation allowances, and net operating losses; pensions and postretirement benefits — defined benefit obligation, plan assets, service and interest cost, and the components of pension expense; stockholders' equity — common and preferred stock, treasury stock, dividends, and retained earnings; share-based compensation; dilutive securities and earnings per share — basic and diluted; investments — debt and equity securities, classification, and the equity method; revenue recognition in complex arrangements; accounting changes and error corrections; the statement of cash flows in depth — complex transactions and reconciliation; and full disclosure — notes, subsequent events, segments, and related parties.

Offered at Florida institutions with upper-division accounting programs.

Learning Outcomes

Required Outcomes

• Account for current liabilities including accruals, payables, and provisions.
• Apply recognition and disclosure criteria for loss contingencies.
• Account for bonds payable issued at par, premium, and discount.
• Apply the effective interest method and prepare amortization schedules.
• Account for debt extinguishment and restructuring.
• Classify leases under ASC 842 and account for them as lessee.
• Recognize a right-of-use asset and lease liability and account for subsequent measurement.
• Describe lessor accounting and its classifications.
• Distinguish temporary from permanent differences in income tax accounting.
• Compute deferred tax assets and liabilities and the related expense.
• Apply valuation allowance requirements and account for net operating losses.
• Describe defined benefit and defined contribution plans.
• Compute the components of net periodic pension cost.
• Account for the projected benefit obligation and plan assets.
• Account for common and preferred stock issuance and treasury stock.
• Account for cash, property, and stock dividends and stock splits.
• Account for share-based compensation including stock options.
• Compute basic and diluted earnings per share.
• Classify and account for debt and equity investments.
• Apply the equity method for significant influence investments.
• Account for accounting changes and error corrections.
• Prepare a statement of cash flows including complex transactions.
• Prepare required note disclosures for the topics covered.

Optional Outcomes

• Compare United States GAAP to IFRS for topics covered.
• Analyze the notes of a real public company for leases, taxes, or pensions.
• Research an issue in the FASB Codification and document the conclusion.
• Describe off-balance-sheet financing and the reforms addressing it.
• Build spreadsheet models for amortization and deferred tax schedules.
• Relate course content to the CPA examination blueprints.

Major Topics

Required Topics

• Current liabilities — recognition, measurement, and classification.
• Contingencies — probable, reasonably possible, and remote.
• Bonds payable — issuance, pricing, and interest.
• Effective interest method — premium and discount amortization.
• Debt extinguishment — gains, losses, and restructuring.
• Lease classification — the ASC 842 criteria.
• Lessee accounting — right-of-use asset and lease liability.
• Lessor accounting — sales-type, direct financing, and operating.
• Income tax differences — temporary and permanent.
• Deferred taxes — assets, liabilities, and rate changes.
• Valuation allowance — more likely than not, and evidence.
• Net operating losses — carryforward accounting.
• Pension fundamentals — plan types and obligations.
• Pension expense — service, interest, return, amortization.
• Postretirement benefits — other than pensions.
• Contributed capital — stock issuance and treasury stock.
• Dividends and splits — accounting and effects.
• Share-based compensation — options and restricted stock.
• Earnings per share — basic, diluted, and antidilution.
• Investments — classification, measurement, and impairment.
• Equity method — significant influence accounting.
• Accounting changes — principle, estimate, and entity.
• Error correction — restatement and prior period adjustment.
• Statement of cash flows — complex transactions and reconciliation.
• Full disclosure — notes, subsequent events, and segments.

Optional Topics

• IFRS comparison.
• Real company note analysis.
• Codification research memo.
• Off-balance-sheet financing and its reform.
• Spreadsheet modeling.
• CPA blueprint alignment.

Resources & Tools

• Intermediate Accounting (Kieso, Weygandt & Warfield), Wiley — the dominant text; keep it through the CPA exam.
• Intermediate Accounting (Spiceland, Nelson & Thomas), McGraw Hill — the main alternative; many students find it more readable on leases and taxes.
• FASB Accounting Standards Codification — the authoritative source, with free academic access at participating institutions through the AAA. ASC 740 (taxes), 715 (pensions), and 842 (leases) are the operative sections here.
• SEC EDGAR — free; read a real 10-K's lease, tax, and pension notes alongside the chapter. It converts abstraction into something concrete faster than any worked example.
• AICPA CPA Exam Blueprints — free; this course's content is heavily represented on the FAR section.
• Excel — build the amortization, deferred tax, and pension worksheets yourself; it is faster than the calculator and it is how the work is done.
• Free supplementary explanation — Farhat Lectures and Edspira cover this syllabus well and are widely used by students who find the text opaque.
• Old exams and problem sets from your department — the best predictor of what will be asked.

Career Pathways

• Accountant and Auditor (SOC 13-2011) — public accounting, industry, government, and nonprofit.
• Certified Public Accountant (CPA) — the credential this sequence supports.
• Financial Reporting Accountant — the role built most directly on this course.
• Assurance / Audit Associate — the standard entry point; recruiting happens early.
• Tax Associate — where the deferred tax material becomes daily work.
• Technical Accounting Specialist — leases, revenue, and complex transactions.
• Financial Analyst (SOC 13-2051) and Controller (SOC 11-3031).
• Internal Auditor — CIA certification.
• Government accounting — state agencies, districts, and Florida's many special districts.

Florida's accounting market is deep — all major public accounting firms maintain Miami, Tampa, Orlando, and Jacksonville offices, and the state's large privately held business base sustains regional firm demand. Miami's international business ties give bilingual accountants a real advantage. Accounting has been on national shortage lists as CPA pipeline numbers declined, which has improved starting salaries and hiring conditions.

Special Information

⚠ Two numbers for Intermediate II — ACG3111 and ACG3113

Worth confirming before registering or transferring. Florida carries the second intermediate accounting course under both ACG3111 and ACG3113, with titles including "Intermediate Accounting II" and "Intermediate Financial Accounting II." Some institutions additionally use ACG3103 for the first course rather than ACG3101, and a few split the sequence into three terms rather than two.

SCNS equivalency applies to the same number at the same level, never across numbers, so ACG3113 transfers as ACG3113 and whether it satisfies a receiving institution's ACG3111 requirement is a matter of that institution's articulation rather than a guarantee. For a transferring accounting major this is worth confirming in writing before taking the course, because repeating an intermediate accounting course is an expensive way to discover the answer.

⚠ Leases, taxes, and pensions changed — make sure your material is current

The currency warning that matters most in this course. ASC 842 replaced the previous lease standard and fundamentally changed lessee accounting: nearly all leases now appear on the balance sheet as a right-of-use asset and lease liability, where the old standard kept operating leases off it entirely. That reform is the reason "off-balance-sheet financing" is discussed in the past tense.

The practical consequence for a student: an older textbook edition, a borrowed set of notes, or a tutoring video from several years ago teaches the wrong model — and the difference is structural rather than cosmetic. The same caution applies to revenue recognition under ASC 606 carried forward from Intermediate I, and to credit losses under CECL. Check the edition, and when in doubt go to the Codification, which is free through your institution.

Deferred taxes, pensions, and leases are the hard three — and they reward a specific approach

Students and CPA candidates consistently name these as the most difficult material in the undergraduate curriculum, and the reason is that each requires holding several moving pieces simultaneously rather than applying a procedure.

What works for each:

• Deferred taxes — keep the book and tax columns physically separate on the page. Every problem is fundamentally "book says X, tax says Y, the difference reverses at some point, so record the future consequence now." Students who try to do it in one column get lost.
• Pensions — use the worksheet. The pension worksheet exists precisely because the obligation, the plan assets, and the expense components cannot be tracked mentally, and instructors who insist on it are not being pedantic.
• Leases — start from the classification test and let it drive everything. Once classification is settled the mechanics follow; students who begin computing before classifying produce confident wrong answers.

All three reward working problems daily rather than in weekend blocks, because the material is cumulative and does not survive cramming.

Read the notes of a real company — it makes the abstraction concrete

The highest-value habit available in this course, and it costs nothing. Pull any public company's 10-K from SEC EDGAR and read its lease note, income tax note, and pension note alongside the corresponding chapter. The disclosures are exactly what the chapter is teaching you to produce, and seeing them in a real filing — with real numbers and real judgment disclosed — converts the material from exam content into something recognizable.

It also prepares for the work. A first-year associate is frequently asked to draft or review exactly these notes, and a candidate who can discuss a real company's tax footnote in an interview is distinguishing themselves from one who can only recite the framework.

⚠ Verify Florida's current CPA licensure pathway before planning credit hours

Consequential for anyone taking this sequence toward the CPA. Florida licensure has historically required 150 semester hours including specified accounting and business coursework, passage of the Uniform CPA Examination, and qualifying experience, administered by the Florida Board of Accountancy under DBPR.

That framework is in flux. Numerous states, Florida among them, have enacted or are implementing additional pathways — typically a bachelor's degree plus a longer experience period as an alternative to the 150-hour requirement — in response to declining accounting enrollment. The examination separately follows the CPA Evolution structure of three Core sections plus one Discipline. Verify current requirements directly with the Florida Board of Accountancy and NASBA rather than relying on advice from an earlier cohort, a textbook, or this guide; the difference is a year of tuition.

Where this sits in the sequence

ACG3113 follows ACG3101 Intermediate Accounting I and completes the financial reporting core. It precedes or accompanies the specialized courses — cost (ACG3341), accounting information systems (ACG4401C), governmental and nonprofit (ACG4501), advanced accounting, tax, and auditing (ACG4632), which builds directly on the internal control and financial reporting knowledge established here. Note that ACG3024 Accounting for Non-Financial Majors is a different course entirely and is not part of this sequence.