Financial reporting paper F7Contents Chapter 1: Published accounts ...1 Chapter 2: Tangible non-current assets ...9 Chapter 3: Intangible assets ...19 Chapter 4: Impairment of assets ...
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Financial reporting Pocket notes
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British library
cataloguing-in-publication
data
A catalogue record for this book is available
from the British Library
Published by:
Kaplan Publishing UK
Unit 2 The Business Centre
Molly Millars Lane
Wokingham
Berkshire
RG41 2QZ
ISBN 978-1-78415-243-7
© Kaplan Financial Limited, 2015
Printed and bound in Great Britain
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Contents
Chapter 1: Published accounts 1
Chapter 2: Tangible non-current assets .9
Chapter 3: Intangible assets .19
Chapter 4: Impairment of assets 25
Chapter 5: Non-current assets held for sale and discontinued operations .29
Chapter 6: The regulatory and conceptual framework .33
Chapter 7: Conceptual framework - measurements 45
Chapter 8: Other Standards .49
Chapter 9: Leases 55
Chapter 10: Financial assets and financial liabilities .61
Chapter 11: Revenue .67
Chapter 12: Provisions, contingent liabilities and contingent assets 71
Chapter 13: Taxation 77
Chapter 14: Earnings per share 81
Inventories and construction contracts
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Chapter 15: Statement of cash flows 85
Chapter 16: Principles of consolidated financial statements 93
Chapter 17: Consolidated statement of financial position 97
Chapter 18: Consolidated statement of profit or loss 109
Chapter 19: Associates 117
Chapter 20: Interpretation of financial statements 123
Index: .I.1
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The exam
The exam is a three-hour paper (plus 15 minutes reading time) structured as follows:
Number of marks
Section A: 20 multiple choice questions, being a mix of calculations and explanations 40
Section B:
Questions 1 and 2 These could cover any of the syllabus (2x15)30
Question 3 Preparation of individual or consolidated financial statements 30
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All questions are compulsory.
The multiple choice questions will test all
area of the syllabus The mix of explanations
and calculations may mean that the
calculations can be quite technical, despite
being relatively small
Question 1 and 2 of section B can be across
any areas of the syllabus, but larger topics
such as group financial statements, cash
flows and analysis are probably likely
Question 3 will involve preparation of
individual or group financial statements The
technique of how to construct these is key,
as is a knowledge of accounting standards
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Revision
• Practice consolidations and accounts preparation until you can do them quickly and accurately to time without fail
• Use these Pocket Notes to give yourself
a broad and thorough knowledge and understanding of the whole syllabus; this will ensure that you have the ability to score well on the other questions
• In the exam, make sure you attempt all the questions. This is a very time
pressured exam and you may need to
leave a question unfinished and move
on in order to do this Many students fail each year because they only complete
some questions and it wasn’t enough to
gain a pass
• Additional reading- ‘A student’s guide to International Reporting Standards’ by Clare Finch
• ‘A student’s guide to preparing financial statements’ by Sally Baker
• ‘A student’s guide to group accounts’ by Tom Clendon
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Quality and accuracy are of the utmost
importance to us so if you spot an error in
any of our products, please send an email
to mykaplanreporting@kaplan.com with full
details, or follow the link to the feedback
form in MyKaplan
Our Quality Co-ordinator will work with our
technical team to verify the error and take
action to ensure it is corrected in future
editions
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In this chapter
• IAS 1 Presentation of financial statements
chapter
1
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IAS 1 Presentation of
financial statements
The 30 mark question in section B could
involve the preparation of single company
financial statements
Statement of profit or loss and other
comprehensive income
The following format is an extract from
the appendix to IAS 1 It shows a model
statement of profit or loss for a single-entity
Statement of profit or loss and other comprehensive income
$
Distribution costs (X) Administrative expenses (X)
Profit from operations (X)
Profit for the period X Other Comprehensive income
Gains/losses on property revaluation X
Total comprehensive income
Exam focus
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Statement of financial position
As before, this format is of a single-entity No reference to groups has been made
ASSETS $ Non-Current Assets
Property, plant and equipment X
Current Assets
Inventories X
Cash and cash equivalents X
Total assets X
EQUITY AND LIABILITIES Equity
Non-current liabilities
Long-term borrowings X
Long-term provisions X
Current liabilities
Trade and other payables X
Short-term provisions X
Total liabilities X
Total equity and liabilities X
The secret to questions involving the preparation of financial statements is practice, followed by more practice
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Statement of changes in equity
This shows the movements on reserves for the period under consideration
Again, practice makes perfect
If you attempt as many of these questions as
you possibly can while studying and revising
for the exam then you will find that the
preparation becomes second nature
Don’t worry if you make the odd slip of
presentation or layout
The main reason for knowing the IAS 1
formats well is that they will enable you to
attempt questions quickly and efficiently
Key Point
Exam focus
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Statement of changes in equity (SoCIE)
Share capital premiumShare Revaluation reserve Retained earnings Equity option Total
Change in accounting
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Question approach
1 Read requirement, set up answer and
workings
• COS
• PPE
• Tax expense
• RE (if not asked for a SOCIE)
2 Highlight notes and ref to TB/draft FSs
3 Line by line down TB/draft FSs
– every number goes somewhere!
4 Adjustments – 2 effects
5 Complete workings
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Exam focus
Exam standard questions on this area can be found in the revision kit as follows:
• December 2007 – Llama
• June 2008 – Dexon
• December 2008 – Candel
• June 2009 – Pricewell
• June 2012 – Fresco
• December 2012 – Quincy
• December 2013 – Moby
Underpinning question practice
To practice the basics use the following test your understandings:
• Complete/essential Chapter 1 Test your understanding 1 and 2
• Chapter 21 Test your understanding 1 to 6
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