To develop knowledge and skills in understanding and applying accounting standards and the theoretical framework in the preparation of financial statements of entities, including groups and how to analyse and interpret those financial statements.
On successful completion of this paper candidates should be able to:
- Discuss and apply a conceptual and regulatory frameworks for financial reporting
- Account for transactions in accordance with International accounting standards
- Analyse and interpret financial statements.
- D Prepare and present financial statements for single entities and business combinations in accordance with International accounting standards
The financial reporting syllabus assumes knowledge acquired in Paper F3, Financial Accounting, and develops and applies this further and in greater depth.
The syllabus begins with the conceptual framework for financial reporting with reference to the qualitative characteristics of useful information and the fundamental bases of accounting introduced in the Paper F3 syllabus within the Knowledge module. It then moves into a detailed examination of the regulatory framework of accounting and how this informs the standard setting process.
The main areas of the syllabus cover the reporting of financial information for single companies and for groups in accordance with generally accepted accounting principles and relevant accounting standards.
Finally, the syllabus covers the analysis and interpretation of information from financial reports.
APPROACH TO EXAMINING THE SYLLABUS
The syllabus is assessed by a three-hour 15 minutes paper-based examination.
All questions are compulsory. It will contain both computational and discursive elements.
Some questions will adopt a scenario/case study approach.
- Section A of the exam comprises 15 objective test questions of 2 marks each.
- Section B of the exam comprises three 10 mark case-based questions.
- Each case has five objective test questions of 2 marks each.
- Section C of the exam comprises two 20 mark questions.
The 20 mark questions will examine the interpretation and preparation of financial statements for either a single entity or a group.
The section A questions and the other questions in section B can cover any areas of the syllabus.
An individual question may often involve elements that relate to different subject areas of the syllabus.
For example the preparation of an entity’s financial statements could include matters relating to several accounting standards.
Questions may ask candidates to comment on the appropriateness or acceptability of management’s opinion or chosen accounting treatment. An understanding of accounting principles and concepts and how these are applied to practical examples will be tested.
Questions on topic areas that are also included in Paper F3 will be examined at an appropriately greater depth in this paper.
Candidates will be expected to have an appreciation of the need for specified accounting standards and why they have been issued. For detailed or complex standards, candidates need to be aware of their principles and key elements.