Syllabus FA

8/4/2019 Syllabus FA

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1

al Accounting

011 to

ned to help

with teaching and learning and is intended to

could be

any examination session.

AND

nks

eding o

nne

olid l

here there is

t link and no required underpinnin

ne arrows. The relational

diagram therefore indicates where you are expect

here it wo

efore

the syllabus

of the

the broadest sense the

the paper.

ral mai

e the syllabus and study

rete sections.

betwe

the syllabus an

should be used as an aid to planning teaching and

learning in a structured way.

Syllabus rationale

This is a narrative explaining how the syllabus isstructured and how the main capabilities are linked.

The rationale also explains in further detail what the

examination intends to assess and why.

n of the main capabilities

(sections) of the syllabus into subject areas. This is

detailed study guide.

us

This section briefly explains the structure of the

examination and how it is assessed.

at students and

ould use as the

ion and materials

ively identifies what

ation session.

ection and

vided into sections

n the

ivided into subject

capabilities included

bject areas are broken

hich describe the detailedssed in examinations.

es are described using verbs

ire students to

ectual level at

e demonstrated

rtner - content (ALP-

he programme through which ACCA approves

als from high quality content

tudy towards ACCAs

ed Learning Partner

Media. In addition,

there are a number of Gold Approved Learning

Partners - content.

For information about ACCA's

Approved Learning Partners - content, please go

ACCA's Content Provider Directory.

The Directory also lists materials by Subscribers,

these materials have not been quality assured by

Financi(F3/FFA)December 2

January 2013This syllabus and study guide is desig

provide detailed information on what

assessed in

THE STRUCTURE OF THE SYLLABUS

STUDY GUIDE

Relational diagram with other papers

This diagram shows direct and indirect li

between this paper and other papers prec

following it. Some papers are directly underpi

by other papers. These links are shown as s

arrows. The links between papers w

only an indirec

r Examinations will be based on

d study guide which comprehens

ine could be assessed in any examin

g breakdown of the syllabus. It is di

are shown as dotted li

ed syllabus. These sections are d

to have underpinning knowledge and w uld areas which relate to the sub-

be useful to review previous learning b

undertaking study.

Overall aim of

This explains briefly the overall objective

paper and indicates in

capabilities to be developed within

Main capabilities

This papers aim is broken down into seve n ACCA's Approved Learning Pa

capabilities which divid

guide into disc

Relational diagram of main capabilities

This diagram illustrates the flows and links en ACCA has one Platinum Approv

the main capabilities (sections) of d content which is BPP Learning

Detailed syllabus

This shows the breakdow

the blueprint for the

ing the syllabApproach to examin

Study Guide

This is the main document th

learning and content providers sh

basis of their studies, instructrespectively.

the detail of the

The study guide is a precise refl

based on the main capabilities identified i

in the detailed syllabus. Su

down into sub-headings woutcomes that could be asse

These outcom

indicating what exams may requ

demonstrate, and the broad intell

which these may need to b

(*see intellectual levels below).

Learning Materials

c) is t

learning materi

providers designed to support s

qualifications.

ACCA 2012 All rights reserved.


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2

conjunction w

also

itional

h

ACCA but may be helpful if used in ith

approved learning materials. You will

find details of Examiner suggested Add

Reading which may be a useful supplement to

approved learning materials.

ACCA's Content Provider Directory can be

ere

found

http://www.accaglobal.com/learningproviders/alpc/c

ontent_provider_directory/search/.

Relevant articles will also be published in Studen

ECTUAL

ssively

ills

nge of levels on

relate

) and ot

ark, thes

Accounta

its equivalent, at

Intermediate level and to first year degree level at

le)

ivalent to

y guides assess both

ar distinction

n assess g

knowledge and skills and in assessing their

enoted

lls is

K

FRAMEWORKS) GUIDED LEARNING HOURS

For this syllabus the approximate number of

standard learning hours that a candidate needs to

commit to each examination is based on the credit

value of the Qualifications and Credit Framework

(QCF) UK, units which make up the syllabus. ForFFA or F3, Financial Accounting, the total learning

hours or credit value of the syllabus is 18 credits or

des direct tuition time, self

study, revision and assessment time.

England, Wales and

Northern Ireland, passing the exam related to the

above syllabus gives credit for the following QCF

drafting financial statements

Principles of accounts preparationg final accounts for sole traders

Drafting financial statementsURE

of examinations varies within and

100% compulsorytes to study across

us.

All examinations are assessed by two-hour paper

examinations.

amination papers is 50%.

ENT

ine anything

guide at any

ludes knowledge,

s, and concepts as

t and tax papers,

rwise, ACCA will

nce a year to

ations and legislation

be assessed within identified

examination sessions.

issuedor legislation passed

annually, will being year to May

to the

paper (where

n.

Regulation issued or legislation passed in

accordance with the above dates may be

examinable even if the effectivedate is in the

future. The term issued or passed relates to when

regulation or legislation has been formally approved.

The term effective relates to when regulation or

legislation must be applied to entity transactions

and business practices.

t

Accountant.

LEVEL OF ASSESSMENTS INTELL

DEMAND

ACCA qualifications are designed to progre

broaden and deepen the knowledge and sk

demonstrated by the student at a ra

their way through each qualification. These

intellectual levels as designated by the UK

qualifications and credit framework (QCF

qualifications frameworks. As a benchm

levels progress from GCSE equivalent at the

Introductory level of the Foundations in

(FIA) programme, to A level, or

to based and computer based

her

e

The pass mark for all ex

GUIDE TO EXAMINATION ASSESSM

ncy

the

ACCA reserves the right to exam

contained within any study

examination session. This inc

techniques, principles, theorie

specified.the Advanced level. The Advanced Diploma (the

Skills module plus professional Ethics Modu

within the ACCA Qualification is equ

undergraduate degree level and the Professional

level is benchmarked at Masters level.

Throughout, the stud

knowledge and skills. Therefore a cle

drawn, within each subject area, betwee

is

For the financial accounting, audi

except where indicated othe

publish examinable documents o

indicate exactly what regul

could potentially

in

application within an accounting or business

context. The assessment of knowledge is da superscriptK and the assessment of ski

denoted by the superscriptS.

VALUE OF ASSESSMENTS (BASED ON U

180 hours which inclu

by

Examinations regulation

on or before 30th Septemberassessed from June 1st of the follow

31st of the year after. Please refer

For QCF registered learners in

units:

Principles of Preparin

GUIDE TO EXAM STRUCT

The structure

between modules and levels.

The examinations containquestions to encourage candida

the breadth of each syllab

examinable documents for the

relevant) for further informatio



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3

guidance on

inable

guide

in conjunction with the

ndidates who wish to be awarded the Diploma in Accounting and Business

to pass the F1/FAB, F2/FMA and the F3/FFA examinations and successfully complete the Foundations in

Professionalism module

'The Foundations in countancy su

qualifications is designed so that a student can

progress through three discrete levels; Introductory

Certificate level, Intermediate Certificate level and

the Diploma level.

Students are recommended to enter FIA at the levelwhich is most appropriate to their needs and to take

examinations in order, but this is not a mandatory

requirement

The study guide offers more detailed

the depth and level at which the exam

documents will be examined. The study

should therefore be read

examinable documents list.

Qualification StructureThe qualification structure requires ca

Syllabus Structure

Diploma in

Accounting

and Business

F3/FFAF1/FAB F2/FMAFiP*+ + + =

* Foundations in Professionalism

Ac ite of

P2

F7

F3

FA1

FA2

FFA

ACCA

FIA



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Syllabus

f the

to

ficiency in the

uble-entry accounting techniques includi

n of basic financial statements.

ions of

idate t

work

e

tion. T e

T

re o di g

ans

of the tr l

nts for

incorporated and unincorporated entities. The

syllabus then moves in tw

requiring candidates to be able to conduct a basic

interpretation of financial statements; and secondly

req ion of simple consolidated

the individual financial

statements of group incorporated entities

On successful completion of this paper, candidates

d purpose of financial

haracteristics of

information

C. Demonstrate the use of double-entry and

and events

ce (including identifying

and correcting error

F. Prepare basic financial statements forncorporated entities.

re simple consolidated financial

statements

H. Interpretation of financial statements

RELATION L DIAGRAM OF MAIN CAPABILITIES

AIM

To develop knowledge and understanding o

underlying principles and concepts relating

financial accounting and technical pro

use of do

the preparatio

ngshould be able to:

RATIONALE

The syllabus for Paper FFA/F3, Foundat

Financial Accounting, introduces the cand

the fundamentals of the regulatory frame

relating to accounts preparation and to th

qualitative characteristics of useful informa

syllabus then covers drafting financial stateand to principles of accounts preparation.

syllabus then concentrates in depth on

processing, and reporting business tr

events. The syllabus then covers the use

balance and how to identify and correct er

then the preparation of financial stateme

o

haccounting systems

mentshe

D. Record transactions

c r n ,

actions andE. Prepare a trial balan

ia

rors, and incorporated and uni

o directions, firstlyG. Prepa

financial statements from

MAIN CAPABILITIES

A. Explain the context an

reporting

B. Define the qualitative c

financial

uiring the preparat

A

Th

of financial reporting

(A)

e context and purpose The qualitative

characteristics

of financial information (B)

Recording

transactionsand events (D)

The use of double-entry and accounting systems (C)

Preparing a trial balance (E)

Preparing basic financial statements (F)

Preparing simple consolidated statements (G)

Interpretation ofFinancial

statements (H)



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DETAILED SYLLABUS

1. The scope and purpose of, financial statements

3. ts

4. The regulatory framework (legislation and

nc

standards)

esponsibilities of those charged

with governance.

iv acteristics of financial

1. The qualitative characteristics of financial

C d accounting

1. Double-entry book-keeping principles includ g

ng records andng information

ger accounts, books of prime entry, and

journals

and events

purchases

.

4. Tangible non-current assets

5. Depreciation

6. Intangible non-current assets and amortisation

7. Accruals and prepayments

8. Receivables and payables

9. Provisions and contingencies

10. Capital structure and finance costs

reparing a trial balance

balance

3. Control accounts and reconciliations

4. Bank reconciliations

nts

ncial statements

1. Statements of financial position

nts and statements of

comprehensive income

Disclosure notes

4 Events after the reporting period

Statements of cash flows (excluding

partnerships)

ncomplete records

solidated financial

statements

ubsidiaries

2. AssociatesH Interpretation of financial statements

1. Importance and purpose of analysis of financialstatements

2. Ratios3. Analysis of financial statements

A The context and purpose of financial reporting

for external reporting

2. Users and stakeholders needs

The main elements of financial repor

regulation, reasons and limitations, releva

of accounting

e

5. Duties and r

B The qualitat e char

information

information

The use of double-entry an

systems

in

the maintenance of accounti 6. Isources of accounti

2. Led

D Recording transactions

1. Sales and

2. Cash

3 Inventory

E P

1. Trial

2. Correction of errors

5. Suspense accou

F Preparing basic fina

2. Income stateme

3.

5.

G Preparing simple con

1. S



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APPROACH TO EXAMINING THE SYLLABUS

Y A TWO HOUR

ED OR COMPUTER-BASED

er-based

ons will

ill include both

l elements.

mark

tyle

ed

nt materials will contain some of

these longer style questions. ACCA will provide

sufficient notice on when the longer style questions

will be introduced.

THE SYLLABUS IS ASSESSED B

PAPER-BAS

EXAMINATION.

The syllabus is assessed by a two hour pap

or computer-based examination. Questi

assess all parts of the syllabus and w

computational and non-computationa

The examination will consist of 50 two

questions. ACCA will introduce longer s

questions in the future and as such approv

learning conte



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Study Guide

A PURPOSE OF

1. The scope and purpose of, financial

) g,

ncial data.[K]

b) Identify and define types of business entity

ty

) een a so

ility

d antages and disadvantages o

operating as a limited liability company, sole

) d scope

g.

) ts and

3. The main elements of financial reports

) of each of

b s, equity,

a) Understand the role of the regulatory system

including the roles of the IFRS Foundation

(IFRSF), the International Accounting

Standards Board (IASB), the IFRS Advisory

Council (IFRS AC) and the IFRS Interpretations

Committee (IFRS IC).[K]

b) Understand the role of International Financial

Reporting Standards.

[K]

ties and responsibilities of those charged

with governance

overnance

specifically in the context of the preparation of

n responsibilities of

overing the

f the financial statements. [K]

RACTERISTICS OF

FINANCIAL INFORMATION

ristics of financial

ation

fine, understand and apply accountingpts and qualitative characteristics:[K]

tation

Going concern

stency

Materiality

vance

bility

l representation

ce over form

x) Neutrality

Completeness

standability

xv) Business entity concept

ve

characteristics.[K]

-ENTRY AND

principles

f accounting

records

a) Identify and explain the function of the main

data sources in an accounting system.[K]

b) Outline the contents and purpose of different

types of business documentation, including:

quotation, sales order, purchase order, goods

received note, goods despatched note, invoice,

THE CONTEXT AND

FINANCIAL REPORTING

statements for external reporting

a Define financial reporting recordin

analysing and summarising fina

sole trader, partnership, limited liabili

company.[K]

c Recognise the legal differences betw

trader, partnership and a limited liabcompany.[K]

le

) Identify the adv f ii)

iii) Accrualstrader or partnership.[K]

e Understand the nature, principles an

financial reportin [K]of

2. Users and stakeholders needs

a Identify the users of financial statemen

state and differentiate between theirxi) Prudence

xii)information needs.[K]

a Understand and identify the purpose

the main financial statements.[K]

) Define and identify assets, liabilitie

revenue and expenses.[K]

4. The regulatory framework

5. Du

a) Explain what is meant by g

financial statements[K]

b) Describe the duties a d

directors and other parties c

preparation o

B THE QUALITATIVE CHA

1. The qualitative characte

inform

a) Deconce

i) Fair presen

iv) Consi

v)

vi) Rele

vii) Relia

viii)Faithfu

ix) Substan

xiii) Comparability

xiv) Under

b) Understand the balance between qualitati

C THE USE OF DOUBLE

ACCOUNTING SYSTEMS

1. Double-entry book-keeping

including the maintenance o



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redit note, debit note, remittanc

advice, receipt.[K]

c)

ity concept.[K]

d) Understand and apply the accounting

e) e accounting system

contributes to providing useful accounting

tiona

f) ify the main types of business transactions

e.g. sales, purchases, payments, receipts.[K]

2 ntry and

a) ounts an

f prime entry, and understand their

nature and function.[K]

a

e posting of journal entries into ledger

accounts.[S]

c) Identify correct journals from given narrative.[S]

e a ledger

D EVENT

a) Record sale and purchase transactions in

rchase

c) Understand the general principles of the

operation of a sales tax.[K]

d) Calculate sales tax on transactions and record

the consequent accounting entries.[S]

e) Account for discounts allowed and discounts

received.[S]

2. Cash

[S]

b) Understand the need for a record of petty cash

transactions.[K]

r adjustments for

inventory in preparing financial statements.[K]

) Record opening and closing inventory.[S]

he alternative methods of valuing

inventory.[K]

stand and apply the IASB requirements[S]

e) Recognise which costs should be included in

f) Understand the use of continuous and period

g) Calculate the value of closing inventory using

and AVCO (average

f accounting concepts

tion of inventory.[K]

tory valuation

ods on profit and on assets.[S]

gible non-current assets

ts.[K]

ween current and

c) Explain the difference between capital and

revenue items. [K]

d) Classify expenditure as capital or revenue

expenditure.[S]

e) Prepare ledger entries to record the acquisition

and disposal of non-current assets.[S]

statement, c e

Understand and apply the concept of double-

entry accounting and the dual

equation.[S]

Understand how th

information and complies with organisa

policies and deadlines.[K]l

b

Ident

. Ledger accounts, books of prime ejournals

Identify the main types of ledger acc

books o

d

b) Understand and illustrate the uses of journ

and th

ls end inventory records.[K]

d) Illustrate how to balance and clos

account.[S]

D RECORDING TRANSACTIONS AN S i) Identify the impact of inven

meth

1. Sales and purchases

ledger accounts.[S]

b) Understand and record sales and pu

returns.[S]

a) Record cash transactions in ledger accounts.

3. Inventory

a) Recognise the need fo

c) Identify t

d) Underfor valuing inventories.

valuing inventories.[S]

FIFO (first in, first out)

cost).[S]

h) Understand the impact o

on the valua

4. Tan

a) Define non-current asse

b) Recognise the difference bet

non-current assets.[K]



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9

f) s on

ts in the income

t including part exchange

g) t asse

s, the statement of

l of a

) nces and

ents are disclosed in financial

statements.[S]

j) Explain the purpose and function of an asse

a) Understand and explain the purpose of

b) Calculate the charge for depreciation using

ce methods.[

c) ircumstances where different

d eciation expense and

accumulated depreciation are recorded in

e) epreciation on a revalued non-

current asset including the transfer of excess

reserve

f) Calculate the adjustments to depreciation

estima

l value of a non-

current asset.[S]

g) Record depreciation in the income statement

and statement of financial position.[S]

6. Intangible non-current assets and amortisation

a) Recognise the difference between tangible andintangible non-current assets.[K]

b) Identify types of intangible assets.[K]

treatment of

development costs in

accordance with International Financial]

e amounts to be capitalised as

ture or to be expensed

from given information.[S]

xplain the purpose of amortisation.[K]

7. Accruals and prepayments

tching concept applies

s.[K]

the adjustments needed

for accruals and prepayments in preparing[S]

c) Illustrate the process of adjusting for accruals

ring financial

journal entries and ledger entries

ual or prepayment.[S]

e) Understand and identify the impact on profit

d prepayments.[S]

a) Explain and identify examples of receivables

ts of offering credit

facilities to customers.[K]

c) Understand the purpose of an aged receivables

analysis.[K]

d) Understand the purpose of credit limits.[K]]

e) Prepare the bookkeeping entries to write off an

irrecoverable debt.[S]

f) Record an irrecoverable debt recovered.[S]

Calculate and record profits or losse

disposal of non-current asse

statemen

c) Identify the definition and

research costs and transactions.[S]

Record the revaluation of a non-curren

ledger account

t in Reporting Standards.[K

d) Calculatcomprehensive income and in the statement of

financial position.[S]

h) Calculate the profit or loss on disposa

revalued asset.[S]

i Illustrate how non-current asset bala

movem

ta) Understand how the ma

to accruals and prepayment

register.[K]

5. Depreciation

depreciation.[K]

straight line and reducing balan

Identify the c

S] and prepayments in prepa

statements.[S]

methods of depreciation would be

appropriate.[K]

) Illustrate how depr

ledger accounts.[S]

Calculate d

depreciation between the revaluation

and retained earnings.[S]and payables.[K]

necessary if changes are made in the

useful life and/or residua

ted

development expendi

e) E

f) Calculate and account for the charge for

amortisation.[S]

b) Identify and calculate

financial statements.

d) Prepare the

for the creation of an accr

and net assets of accruals an

8. Receivables and payables

b) Identify the benefits and cos



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10

g) bts on

tement and on the statement of[S]

h) Prepare the bookkeeping entries to create and

.[S]

i) in the

statement and how the closing balance of the

ent o

sition.[S]

vabl

and payables.

k) tand the purpose

lier statements.[S]

) non-current

ncial

a) Understand the definition of provision,

sset. ]

b en and classify items astingen

) methods

accounting for provisions, contingent liabilities

d) Calculate provisions and changes in

s.[S]

isions in the final accounts.[S]

10. Capital structure and finance costs

a) Understand the capital structure of a limited

liability company including: [K]

i) Ordinary shares

ii) Preference shares (redeemable and

irredeemable)

iii) Loan notes.

ements in the share capital and

share premium accounts.[S]

reserves which

may appear in the company statement of

n) issue and its

ages.[K]

nd its advantages and

of a bonus

e in the statement of


and show the effects of a rights issue insition.[S]

h) Record dividends in ledger accounts and the

r[S]

j) Identify the components of the statement of

ALANCE

1. Trial balance

entify the purpose of a trial balance.[K]

balances into a trial balance.[S]

extracts of an opening trial balance.[S]

limitations of a

2. Correction of errors

a) Identify the types of error which may occur in

bookkeeping systems.[K]

b) Identify errors which would be highlighted by

the extraction of a trial balance.[K]

c) Prepare journal entries to correct errors.[S]

Identify the impact of irrecoverable de

the income sta

financial position.

adjust an allowance for receivables

Illustrate how to include movements

allowance for receivables in the income

allowance should appear in the statem

financial po

f e) Define a rights issue a

disadvantages.[K]

j) Account for contras between trade recei[S]

es f) Record and show the effects

(capitalisation) issu

Prepare, reconcile and unders

of supp

l Classify items as current or

liabilities in the statement of fina

position.[S]

9. Provisions and contingencies

contingent liability and contingent a

) Distinguish betwe

[K

provisions, contingent liabilities or con

assets.[K]t E PREPARING A TRIAL B

c Identify and illustrate the different of

a) Id

and contingent assets.[K]

provisions.[S]

e) Account for the movement in provision

f) Report prov

b) Record mov

c) Identify and record the other


d) Define a bonus (capitalisatio

advantages and disadvant

g) Recordthe statement of financial po

financial statements.[S]

i) Calculate and record finance costs in ledge

accounts and the financial statements.

changes in equity.[K]

b) Extract ledger

c) Prepare

d) Identify and understand the

trial balance.[K]



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11

d pact of errors

ent of

income and statement of

counts for

ounts payable.[K]

relate to the

try system.[K]

) given

d ns for

accounts receivable and accounts payable.[S]

e) ich would be highlighted by

rol account reconciliation.[K

in control accounts

ccounts.[S]

a) Understand the purpose of bank

fferences

) ions.[S]

onciliation statements.[S]

) h book balances

iven information.[S]

final accounts.[S]

5. Suspense accounts

a) Understand the purpose of a suspense

account.[K]

b) Identify errors leading to the creation of a

suspense account.[K]

c) Record entries in a suspense account.[S]

Make journal entries to clear a suspense

account.[S]

ING BASIC FINANCIAL

l position

ting equation,

section D, E and examinable documents and

vention underlie the[K]

b) Understand the nature of reserves.[K]

in a company

sition.[S]

Prepare a statement of financial position or

ts as stipulated

within section D, E and examinable[S]

e) Understand why the heading retained earnings

ent of financial

tements of

n income statement and statement of

comprehensive income or extracts as

mation using

stipulated within

section D, E and examinable documents.[S]

ng concepts apply to[K]

st of sales, gross profit,

profit for the year, and total comprehensive

income from given information.[S]

d) Disclose items of income and expenditure in

the income statement. [S]

e) Record income tax in the income statement of

a company including the under and

overprovision of tax in the prior year.[S]

) Calculate and understand the im

on the income statement, statem

comprehensive


3. Control accounts and reconciliations

a) Understand the purpose of control ac

accounts receivable and acc

b) Understand how control accounts

double-en

c Prepare ledger control accounts from

information.[S]

) Perform control account reconciliatio

Identify errors wh

performing a cont ]

f) Identify and correct errors

and ledger a

4. Bank reconciliations

reconciliations.[K]

b) Identify the main reasons for di

between the cash book and the bank

statement.[K]

c Correct cash book errors and/or omiss

d) Prepare bank rec

e Derive bank statement and cas

from g

f) Identify the bank balance to be reported in the

d)

F PREPAR

STATEMENTS

1. Statements of financia

a) Recognise how the accoun

accounting treatements as stipulated within

business entity con

statement of financial position.

c) Identify and report reserves

statement of financial po

d)

extracts as applicable from given information

using accounting treatmen

documents.

appears in a company statem

position.[K]

2. Income statements and sta

comprehensive income

a) Prepare a

applicable from given infor

accounting treatments as

b) Understand how accounti

revenue and expenses.

c) Calculate revenue, co



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12

f) p between the

me

ment and statement of comprehensive

g) Identify items requiring separate disclosure on

income statement.[K]

a) [K]

b e notes[S]

g tangible and in

tangible assets

iii) Events after the reporting period

4. e reporting period

a) Define an event after the reporting period in

cial

r non-adjusting

c) Distinguish between how adjusting and non-

financia[K]

5 Statements of cash flows (excluding

a) tiate between profit and cash flow.[K

b rstand the need for management to

control cash flow.[K]

c) users

statement of

d) Classify the effect of transactions on cash

flows.[S]

e) Calculate the figures needed for the statement

of cash flows including:[S]

i) Cash flows from operating activities

ii) Cash flows from investing activities

iii) Cash flows from financing activities

ow from operating

activities using the indirect and direct[S]

Prepare statements of cash flows and extracts

from statements of cash flows from given

the treatment of given transactions in a

companys statement of cash flows.[K]

iques used in

ations: [S]

uation

of ledger accounts to calculate missing

figuresnk summaries

ercentages to calculate

missing figures.

SOLIDATED

ATEMENTS

ubsidiaries

cribe the following terms in the

up accounting:[K]

nancial statements

trolling interest

nt

group structure. [K]

components of and prepare a

of financial position or[S]

ts at acquisition on

nd buildings (excluding depreciation

adjustments)

ii) Fair value of consideration transferred from

cash and shares (excluding deferred and

contingent consideration)

iii) Elimination of inter-company trading

balances (excluding cash and goods in

transit)

iv) Removal of unrealised profit arising on

inter-company trading

Understand the interrelationshi

statement of financial position, inco

state

income. [K]

the face of the

3. Disclosure notes

Explain the purpose of disclosure notes

) Draft the following disclosur

urrent assets includini) Non c

ii) Provisions

iv) Inventory

Events after th

accordance with International Finan

Reporting Standards.[K]

b) Classify events as adjusting o .[S] 1. S

adjusting events are reported in the l context of grostatements.

partnerships)

Differen ] vi) Trade / simple investme

) Unde

Recognise the benefits and drawbacks to

of the financial statements of a

cash flows. [K]

f) Calculate the cash fl

method.

g)

information.[S]

h) Identify

6. Incomplete records

a) Understand and apply techn

incomplete record situ

i) Use of accounting eq

ii) Use

iii) Use of cash and/or ba

iv) Use of profit p

G PREPARING SIMPLE CON

FINANCIAL ST

a) Define and des

i) Parent

ii) Subsidiary

iii) Control

iv) Consolidated or group fi

v) Non-con

b) Identify subsidiaries within a

c) Describe the

consolidated statement

extracts thereof including:

i) Fair value adjustmen

land a



13/13

13

f subsidiaries part way throu

the financial year

d

ll goodwill method only

X

controlling interest X

uisition (X

v) Acquisition o gh

) Calculate goodwill (excluding impairment of

goodwill) using the fu

as follows: [S]

Fair value of consideration

Fair value of non-

Less fair value of net assets at acq )

Goodwill at acquisition X

prepare a

hensive

g: [S]

ter-company trading

s in

ii) Removal of unrealised profit arising onompany trading

y through

2. Associates

) significant

ations where

significant influence or participating interest

b) a parent-associate

tify an

associate within a group structure. [K]

nciple of equity accounting[K]

H TATION OF FINANCIAL

STATEMENTS

e and purpose of analysis of

ial statements

the interpretation and analysis of

tements is used in a business

environment. [K]

b) Explain the purpose of interpretation of ratios[K].

2. Ratiosa) Calculate key accounting ratios [S]

i) Profitabilityii) Liquidity

) Efficiency

iv) Position

relationships between ratios[K]

tatements

lationship

statements with regard to profitability, liquidity,

nd financial

nclusions from the information

contained within the financial statements and

present these to the appropriate user of the

financial statements. [S]

e) Describe the components of and

consolidated statement of compre

income or extracts thereof includin

i) Elimination of in

balances (excluding cash and good

transit)

inter-c

iii) Acquisition of subsidiaries part wa

the financial year

a Define and identify an associate and

influence and identify the situ

exists. [K]

Describe the key features of

relationship and be able to iden

c) Describe the pri

INTERPRE

1. Importancfinanc

a) Describe how

financial sta

iii

b) Explain the inter

3. Analysis of financial s

a) Calculate and interpret the re

between the elements of the financial

efficient use of resources a

position[S].

b) Draw valid co


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