ACCA Paper P2 (INT) Corporate Reporting Pocket notes - Kaplan 2010

182 Pages·1.647 MB·English

ACCA
Paper P2 (INT)
Corporate Reporting
Pocket notes
CCoorrppoorraattee rreeppoorrttiinngg paper P2 (INT)
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CCoorrppoorraattee rreeppoorrttiinngg paper P2 (INT)
Contents
Chapter 1: Group accounting 1 1
Chapter 2: Group accounting 2 17
Chapter 3: Foreign currency 29
Chapter 4: Group statement of cash flows 37
Chapter 5: Group reorganisations and restructuring 43
Chapter 6: The professional and ethical duty of the accountant 49
Chapter 7: The financial reporting framework 55
Chapter 8: Employee benefits and share-based payment 63
Chapter 9: Reporting Financial Performance 73
Chapter 10: Non-current assets 93
Chapter 11: Leases 107
Chapter 12: Financial instruments 117
Chapter 13: Provisions and events after the reporting period 129
Chapter 14: Tax in financial statements 137
kkaappllaann ppuubblliisshhiinngg iiiiii
CCoorrppoorraattee rreeppoorrttiinngg paper P2 (INT)
Chapter 15: Non financial reporting 143
Chapter 16: Specialised entities 151
Chapter 17: Adoption of IFRS 157
Chapter 18: Current issues 165
Index I.1
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CCoorrppoorraattee rreeppoorrttiinngg paper P2 (INT)
planning their answers. You are not allowed
to write in the answer booklet during the
The exam reading time but you are allowed to write
notes on the question paper.
This exam will test your knowledge of
accounting concepts, principles and theories. Section A (50%) – one case study
You will be expected to comment on compulsory question (50 marks).
scenarios and assess proposed accounting
• This will be a scenario based question
treatments.
dealing with the preparation of
You must be able to apply accounting theory consolidated financial statements
to practical situations and will be expected to including group cash flow statements
cover several accounting standards in one and financial reporting issues.
scenario, so you must study the breadth of
Section B (50%) - A choice of two questions
the syllabus.
from a total of three (25 marks each).
When providing advice on the suitability of
• In this section, two questions will be
accounting treatment you will also have to
scenario or case study based and
consider professional and ethical judgement.
one question will be an essay based
A knowledge of current issues is also on current issues. They will cover all
required. aspects of the syllabus.
The exam is three hours long with an • You must ensure you revise the breadth
additional 15 minutes reading time to enable of the syllabus, as questions are likely to
candidates to read the questions and begin cover more than one topic.
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CCoorrppoorraattee rreeppoorrttiinngg paper P2 (INT)
• Marks will be awarded for professional said this will attract presentation marks..
style and format of reports.
• Keep up to date with current issues.
Keys to Success in Paper P2
Aside from the possibility of having one
question that covers a single new
Exercising judgement / technique
standard or exposure draft, you may also
• On the compulsory question, make come across an issue in a scenario type
sure you have a thorough knowledge question that requires you to comment
of all aspects of group accounting. Use on a current proposal.
your groups technique to work through
the question methodically, focusing on • Try and step back from question
the parts you can do. Don’t panic if there scenarios and think of all of the possible
are adjustments that you do not know impacts. It is unlikely the Examiner
what to do with, better to leave them and will give you a scenario where only one
get on with the rest of the question, accounting standard should be applied. It
rather than get bogged down. Don’t is more likely to be two or three so you
spend too long on the consolidation as must recognise this and produce a valid
you still have to complete the rest of the argument for your proposed accounting
question. In the Pilot Paper, there were treatment. Try and think of the following
35 marks available for the group cash questions as pointers to start thinking
flow and another 15 marks for written about your answer:
elements of the paper. Make sure you
attempt all parts of this question.
• Make sure you write a report where a
report is asked for – the Examiner has
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CCoorrppoorraattee rreeppoorrttiinngg paper P2 (INT)
What has happened in the scenario? Comment on the issue in question, e.g. a
company has entered into a share based payment
transaction
What are the current accounting rules? Current standard? Not covered by any standard?
What are the new accounting rules? New standard? Exposure draft / Discussion paper
in issue?
Apply the rules to the question scenario: Comment on the accounting treatment that should
be followed, applying the rules to the given
scenario
What are the implications? Comment on the effect of the rules discussed on
the financial statements, e.g. income statement,
financial position, cash flow, statement of changes
in equity.
Conclude: A one line summary of the points made above
kkaappllaann ppuubblliisshhiinngg vviiii
Corporate reporting
Exam focus
• Read around the subject (Student
Accountant, ACCA website, IASB
website, accountancy journals) and ‘A
students guide to IFRS’ by Clare Finch.
• Practice exam questions.
• Don’t forget report formats (header,
introduction, headings, main body
developing each point, conclusion)
• Spend an equal amount of time on each
question in the exam
• Leave out the parts you cannot do –
there will be things in the exam you have
never seen before, if you don’t know
what to do, don’t waste time on them.
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chapter
1
Group accounting 1
In this chapter
• Definitions.
• Overview.
• Basic workings.
• Associates and joint ventures.
• Fair value adjustments.
• Other adjustments.
1
GGrroouupp aaccccoouunnttiinngg 11 Chapter 1
Overview Basic workings
Exam focus SOFP - basic workings - overview
• There will always be a group accounting
question as Q1 on this paper
group
• Basic principles will enable you to get the structure
easy marks in the question before
attempting any of the trickier parts.
A parent is an entity that has one or more Retained net
subsidiaries. earnings assets
A subsidiary is an entity, including an
unincorporated entity, such as a partnership,
that is controlled by another entity (known as
the parent).
non-
Control is the power to govern the financial controlling goodwill
interests
and operating policies of an entity so as to
obtain benefits from its activities
Non-controlling interest is the equity in a
subsidiary not attributable to a parent.
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