ACCA

Suspense accounts and error correction are popular topics for examiners because they test understanding of bookkeeping principles so well. A suspense account is a temporary resting place for an entry that will end up somewhere else once its final destination is determined. There are two reasons why a suspense account could be opened: A bookkeeper is…

Part 2 This is the second of two articles, and considers revaluation of property, plant and equipment (PPE) and its derecognition in accordance with International Accounting Standard (IAS®) 16, Property, Plant and Equipment (PPE). It also summarises the provisions of International Financial Reporting Standard (IFRS®) 5, Non-current assets held for sale and discontinued operations. The first…

Part 1 This is the first of two articles which consider the main features of International Accounting Standard (IAS®) 16, Property, Plant and Equipment (PPE). This standard deals with the four main aspects of financial reporting of PPE that are likely to be of major relevance in the FR exam, namely: initial measurement and depreciation –…

This article starts by considering aspects of deferred tax that are relevant to Financial Reporting, before moving on to the more complicated situations that may be tested in Strategic Business Reporting. Deferred tax is a topic that is consistently tested in Financial Reporting (FR) and is often tested in further detail in Strategic Business Reporting…

This article discusses and shows both ways of measuring goodwill following the acquisition of a subsidiary, and how each measurement of goodwill is subject to an impairment review. Following the revisions to IFRS 3, Business Combinations, in January 2008, there are now two ways of measuring the goodwill that arises on the acquisition of a…

Performance appraisal requires good interpretation and a good understanding of what the information means in the context of the question Performance appraisal is an important aspect of Paper F7, Financial Reporting and of interest to Paper P3 students. At this level you are not only required to prepare financial statements but understand the information underpinning…

IFRS 3, Business Combinations was issued in January 2008 as the second phase of a joint project with the Financial Accounting Standards Board (FASB), the US standards setter, and is designed to improve financial reporting and international convergence in this area. The standard has also led to minor changes in IAS 27, Consolidated and Separate…

This article is designed to outline the key areas of IAS 16, Property, Plant and Equipment that you may be required to attempt in the Financial Reporting exam. The accounting for International Accounting Standard (IAS®) 16, Property, Plant and Equipment is a particularly important area of the Financial Reporting syllabus. You can almost guarantee that in every exam you…

On 28 May 2014, the International Accounting Standards Board (the Board), as a result of the joint project with the US Financial Accounting Standards Board (FASB), issued IFRS® 15, Revenue from Contracts with Customers. Application of the standard is mandatory for annual reporting periods starting from 1 January 2017 onward (though there is currently a proposal…

1.  Introduction and context setting International Financial Reporting Standard (IFRS®) 16 – Leases –  was issued in January 2016 and, in comparison to its predecessor International Accounting Standard (IAS®) 17 makes significant changes to the way in which leasing transactions are reported in the financial statements of lessees (although not in the financial statements of…

Analysing financial statements is a key area for the Financial Reporting (FR) exam, and is the area of the syllabus that is used to help prepare FR candidates for the Strategic Business Reporting (SBR) exam. It is also the area of the syllabus where performance varies most between students; a well prepared candidate can often…

For some ACCA candidates, specific IFRS® standards are more favoured than others. IAS® 37 appears to be less popular than other standards because, usually, answers to Financial Reporting (FR) questions required a balanced discussion of whether criteria are met, as opposed to calculating numbers. However, IAS 37 is often a key standard in FR exams,…

A key part of the Financial Reporting exam is the ability to analyse a set of financial statements. The statement of cash flows is one of the primary financial statements, and Financial Reporting candidates must be able to explain the performance of an entity based on all of the financial statements including the cash flows given….

For ACCA candidates studying Financial Reporting (FR), consolidated financial statements are a key topic. A central part of this syllabus area is accounting for the acquisition of a subsidiary which will test the concept of fair value; this is the value that the consideration paid for the subsidiary must be recorded. In addition to this,…

International Financial Reporting Standard (IFRS®) 9 Financial Instruments is a complex standard, especially for users and preparers of financial statements. It is therefore no surprise that ACCA candidates also find it complex. Indeed, there is a well-known quote from a previous Chair of the International Accounting Standards Board (the Board) who said: ‘If you understand…

A building renovation can be tricky and it can be overwhelming: at the beginning, you definitely know that some parts of the building need to be upgraded, but you can often find more and more that needs to be fixed after the renovation begins. Often, the project can take longer than you ever anticipated, and…