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Relational diagram with other papers This is the main document that students and
learning and content providers should use as the
This diagram shows direct and indirect links basis of their studies, instruction and materials
between this examination and other examinations respectively.
which precede or follow it. Some examinations are Examinations will be based on the detail of the
directly underpinned by others. These links are study guide which comprehensively identifies what
shown as solid line arrows. The indirect links are could be assessed within any examination session.
shown as dotted line arrows. The relational diagram The study guide is a precise reflection and
therefore indicates where learners are expected to breakdown of the syllabus. It is divided into sections
have underpinning knowledge and where it would based on the main capabilities identified in the
be useful to review previous learning before syllabus. These sections are divided into subject
undertaking study. areas which relate to the sub-capabilities included
in the detailed syllabus. Subject areas are broken
Overall aim of the syllabus down into sub-headings which describe the detailed
outcomes that could be assessed in examinations.
This explains briefly the overall objective of the These outcomes indicate what exams may require
examination and indicates in the broadest sense the students to demonstrate, and the broad intellectual
capabilities to be developed within the examination. level at which these may need to be demonstrated
(*see intellectual levels below).
Diploma in
F1/FAB F2/FMA F3/FFA
+ + + FiP* = Accounting
and Business
* Foundations in Professionalism
Syllabus Structure
The Foundations in Accountancy suite of Students are recommended to enter Foundations in
qualifications is designed so that a student can Accountancy at the level which is most appropriate
progress through three discrete levels; Introductory to their needs and to take
Certificate level, Intermediate Certificate level and examinations in order, but this is not a mandatory
the Diploma level. requirement
P2 ACCA
F7
FIA FFA F3
FA2
FA1
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Syllabus financial statements from the individual financial
statements of group incorporated entities.
Recording
The use of double-entry and accounting systems (C) transactions
and events (D)
Interpretation of
financial
Preparing simple consolidated financial statements (G)
statements (H)
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DETAILED SYLLABUS
10. Capital structure and finance costs
A The context and purpose of financial reporting
E Preparing a trial balance
1. The scope and purpose of financial statements
for external reporting 1. Trial balance
C The use of double-entry and accounting 4 Events after the reporting period
systems
5. Statements of cash flows
1. Double-entry book-keeping principles including 6. Incomplete records
the maintenance of accounting records and
sources of accounting information
G Preparing simple consolidated financial
2. Ledger accounts, books of prime entry, and statements
journals
1. Subsidiaries
D Recording transactions and events
2. Associates
1. Sales and purchases
H Interpretation of financial statements
2. Cash
1. Importance and purpose of analysis of financial
3. Inventory statements
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APPROACH TO EXAMINING THE SYLLABUS
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Study Guide 5. Duties and responsibilities of those charged
with governance
A THE CONTEXT AND PURPOSE OF FINANCIAL
a) Explain what is meant by governance
REPORTING
specifically in the context of the preparation of
financial statements[K]
1. The scope and purpose of, financial statements
for external reporting
b) Describe the duties and responsibilities of
directors and other parties covering the
a) Define financial reporting – recording,
preparation of the financial statements. [K]
analysing and summarising financial data.[K]
B THE QUALITATIVE CHARACTERISTICS OF
b) Identify and define types of business entity –
FINANCIAL INFORMATION
sole trader, partnership, limited liability
company.[K]
1. The qualitative characteristics of financial
information
c) Recognise the legal differences between a sole
trader, partnership and a limited liability
a) Define, understand and apply qualitative
company.[K]
characteristics:[K]
i) Relevance
d) Identify the advantages and disadvantages of
ii) Faithful representation
operating as a limited liability company, sole
iii) Comparability
trader or partnership.[K]
iv) Verifiability
v) Timeliness
e) Understand the nature, principles and scope of
vi) Understandability
financial reporting.[K]
b) Define, understand and apply accounting
2. Users’ and stakeholders’ needs
concepts:[K]
i) Materiality
a) Identify the users of financial statements and
ii) Substance over form
state and differentiate between their
iii) Going concern
information needs.[K]
iv) Business entity concept
v) Accruals
3. The main elements of financial reports
vi) Fair presentation
vii) Consistency
a) Understand and identify the purpose of each of
the main financial statements.[K]
C THE USE OF DOUBLE-ENTRY AND
b) Define and identify assets, liabilities, equity,
ACCOUNTING SYSTEMS
revenue and expenses.[K]
1. Double-entry book-keeping principles including
4. The regulatory framework
the maintenance of accounting records
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statement, credit note, debit note, remittance 2. Cash
advice, receipt.[K]
a) Record cash transactions in ledger accounts.[S]
c) Understand and apply the concept of double-
entry accounting and the duality concept.[K] b) Understand the need for a record of petty cash
transactions.[K]
d) Understand and apply the accounting
equation.[S] 3. Inventory
e) Understand how the accounting system a) Recognise the need for adjustments for
contributes to providing useful accounting inventory in preparing financial statements.[K]
information and complies with organisational
policies and deadlines.[K] b) Record opening and closing inventory.[S]
f) Identify the main types of business transactions c) Identify the alternative methods of valuing
e.g. sales, purchases, payments, receipts.[K] inventory.[K]
2. Ledger accounts, books of prime entry and d) Understand and apply the IASB requirements
journals for valuing inventories.[S]
a) Identify the main types of ledger accounts and e) Recognise which costs should be included in
books of prime entry, and understand their valuing inventories.[S]
nature and function.[K]
f) Understand the use of continuous and period
b) Understand and illustrate the uses of journals end inventory records.[K]
and the posting of journal entries into ledger
accounts.[S] g) Calculate the value of closing inventory using
FIFO (first in, first out) and AVCO (average
c) Identify correct journals from given narrative.[S] cost) – both periodic weighted average and
continuous weighted average.[S]
d) Illustrate how to balance and close a ledger
account.[S] h) Understand the impact of accounting concepts
on the valuation of inventory.[K]
D RECORDING TRANSACTIONS AND EVENTS
i) Identify the impact of inventory valuation
1. Sales and purchases methods on profit and on assets.[S]
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6. Intangible non-current assets and amortisation
f) Calculate and record profits or losses on
disposal of non-current assets in the statement a) Recognise the difference between tangible and
of profit or loss including part exchange intangible non-current assets.[K]
transactions.[S] b) Identify types of intangible assets.[K]
g) Record the revaluation of a non-current asset in c) Identify the definition and treatment of
ledger accounts, the statement of profit or loss “research costs” and “development costs” in
and other comprehensive income and in the accordance with International Financial
statement of financial position.[S] Reporting Standards.[K]
c) Identify the circumstances where different c) Illustrate the process of adjusting for accruals
methods of depreciation would be and prepayments in preparing financial
appropriate.[K] statements.[S]
d) Illustrate how depreciation expense and d) Prepare the journal entries and ledger entries
accumulated depreciation are recorded in for the creation of an accrual or prepayment.[S]
ledger accounts.[S]
e) Understand and identify the impact on profit
e) Calculate depreciation on a revalued non- and net assets of accruals and prepayments.[S]
current asset including the transfer of excess
depreciation between the revaluation surplus 8. Receivables and payables
and retained earnings.[S]
a) Explain and identify examples of receivables
f) Calculate the adjustments to depreciation and payables.[K]
necessary if changes are made in the estimated
useful life and/or residual value of a non- b) Identify the benefits and costs of offering credit
current asset.[S] facilities to customers.[K]
g) Record depreciation in the statement of profit c) Understand the purpose of an aged receivables
or loss and statement of financial position.[S] analysis.[K]
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e) Prepare the bookkeeping entries to write off an ii) Preference shares (redeemable and
irrecoverable debt.[S] irredeemable)
iii) Loan notes.
f) Record an irrecoverable debt recovered.[S]
b) Record movements in the share capital and
g) Identify the impact of irrecoverable debts on share premium accounts.[S]
the statement of profit or loss and on the
statement of financial position.[S] c) Identify and record the other reserves which
may appear in the company statement of
h) Prepare the bookkeeping entries to create and financial position.[S]
adjust an allowance for receivables.[S]
d) Define a bonus (capitalisation) issue and its
i) Illustrate how to include movements in the advantages and disadvantages.[K]
allowance for receivables in the statement of
profit or loss and how the closing balance of e) Define a rights issue and its advantages and
the allowance should appear in the statement disadvantages.[K]
of financial position.[S]
f) Record and show the effects of a bonus
j) Account for contras between trade receivables (capitalisation) issue in the statement of
and payables.[S] financial position.[S]
k) Prepare, reconcile and understand the purpose g) Record and show the effects of a rights issue in
of supplier statements.[S] the statement of financial position.[S]
l) Classify items as current or non-current h) Record dividends in ledger accounts and the
liabilities in the statement of financial financial statements.[S]
position.[S]
i) Calculate and record finance costs in ledger
9. Provisions and contingencies accounts and the financial statements.[S]
c) Identify and illustrate the different methods of a) Identify the purpose of a trial balance.[K]
accounting for provisions, contingent liabilities
and contingent assets.[K] b) Extract ledger balances into a trial balance.[S]
10. Capital structure and finance costs a) Identify the types of error which may occur in
bookkeeping systems.[K]
a) Understand the capital structure of a limited
liability company including: [K] b) Identify errors which would be highlighted by
i) Ordinary shares the extraction of a trial balance.[K]
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c) Prepare journal entries to correct errors.[S] c) Record entries in a suspense account.[S]
d) Calculate and understand the impact of errors d) Make journal entries to clear a suspense
on the statement of profit or loss and other account.[S]
comprehensive income and statement of
financial position.[S] F PREPARING BASIC FINANCIAL STATEMENTS
a) Understand the purpose of control accounts for a) Recognise how the accounting equation,
accounts receivable and accounts payable.[K] accounting treatments (as stipulated within
b) Understand how control accounts relate to the sections D, E and examinable documents) and
double-entry system.[K] business entity convention underlie the
statement of financial position.[K]
c) Prepare ledger control accounts from given
information.[S] b) Understand the nature of reserves.[K]
d) Perform control account reconciliations for c) Identify and report reserves in a company
accounts receivable and accounts payable.[S] statement of financial position.[S]
e) Derive bank statement and cash book balances b) Understand how accounting concepts apply to
from given information.[S] revenue and expenses.[K]
f) Identify the bank balance to be reported in the c) Calculate revenue, cost of sales, gross profit,
final accounts.[S] profit for the year, and total comprehensive
income from given information.[S]
5. Suspense accounts
d) Disclose items of income and expenditure in
a) Understand the purpose of a suspense the statement of profit or loss. [S]
account.[K]
e) Record income tax in the statement of profit or
b) Identify errors leading to the creation of a loss of a company including the under and
suspense account.[K] overprovision of tax in the prior year.[S]
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f) Understand the interrelationship between the f) Calculate the cash flow from operating
statement of financial position and the activities using the indirect and direct
statement of profit or loss and other method.[S]
comprehensive income. [K]
g) Prepare statements of cash flows and extracts
g) Identify items requiring separate disclosure on from statements of cash flows from given
the face of the statement of profit or loss.[K] information.[S]
c) Distinguish between how adjusting and non- a) Define and describe the following terms in the
adjusting events are reported in the financial context of group accounting: [K]
statements.[K] i) Parent
ii) Subsidiary
5 Statements of cash flows (excluding iii) Control
partnerships) iv) Consolidated or group financial statements
v) Non-controlling interest
a) Differentiate between profit and cash flow.[K] vi) Trade / simple investment
b) Understand the need for management to b) Identify subsidiaries within a group structure. [K]
control cash flow.[K]
c) Describe the components of and prepare a
c) Recognise the benefits and drawbacks to users consolidated statement of financial position or
of the financial statements of a statement of extracts thereof including: [S]
cash flows. [K] i) Fair value adjustments at acquisition on
land and buildings (excluding depreciation
d) Classify the effect of transactions on cash adjustments)
flows.[S] ii) Fair value of consideration transferred from
cash and shares (excluding deferred and
e) Calculate the figures needed for the statement contingent consideration)
of cash flows including:[S] iii) Elimination of intra-group trading balances
i) Cash flows from operating activities (excluding cash and goods in transit)
ii) Cash flows from investing activities iv) Removal of unrealised profit arising on
iii) Cash flows from financing activities intra-group trading
v) Acquisition of subsidiaries part way through
the financial year
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d) Calculate goodwill (excluding impairment of 3. Analysis of financial statements
goodwill) using the full goodwill method only
as follows: [S] a) Calculate and interpret the relationship
Fair value of consideration X between the elements of the financial
Fair value of non-controlling interest X statements with regard to profitability, liquidity,
Less fair value of net assets at acquisition (X) efficient use of resources and financial
Goodwill at acquisition X position[S].
e) Describe the components of and prepare a b) Draw valid conclusions from the information
consolidated statement of profit or loss or contained within the financial statements and
extracts thereof including: [S] present these to the appropriate user of the
i) Elimination of intra-group trading balances financial statements. [S]
(excluding cash and goods in transit)
ii) Removal of unrealised profit arising on
intra-group trading
iii) Acquisition of subsidiaries part way through
the financial year
2. Associates
H INTERPRETATION OF FINANCIAL
STATEMENTS
2. Ratios
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SUMMARY OF CHANGES TO F3/FFA
ACCA periodically reviews its qualification syllabuses so that they fully meet the needs of stakeholders including
employers, students, regulatory and advisory bodies and learning providers. These syllabus changes take effect
from 1st September each year.
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