Financial Accounting & Reporting

518 Pages·2022·16.761 MB·English

by  Chartered Accountants Australia

Financial Accounting
& Reporting
(FIN)122
Candidate Study Guide
March 2022

Dear Candidate,
Welcome to the Financial Accounting & Reporting (FIN) module of the Chartered Accountants Program.
On completion of this module you will be one step closer to becoming a Chartered Accountant.
Inside this pack you will find your Candidate Study Guide (CSG), which includes the core content for
each unit. For those new to the Chartered Accountants Program, the Module Outline directs you to the key
resources available to you, both within this printed CSG and online through myLearning.
Candidate feedback is vital to the continuous improvement and success of the Chartered Accountants
Program, and each term we reflect carefully on candidate feedback. One exciting outcome of this feedback
is the transition from the current Chartered Accountants Program to the new Chartered Accountants Program
that commenced in June 2021. Further information regarding the new CharteredAccountants Program can
be found on our website at https://www.charteredaccountantsanz.com/become-a-member/new-ca-program
and candidate transition information can be found via myLearning > Chartered Accountants Program >
Candidate transition information.
We are committed to supporting you in your studies this term. So we encourage you to be active via
myLearning and communicate with each other and the module team on a regular basis online. Further study
resources, services and strategies can be found in the Financial Accounting & Reporting (1) 2022 and the
Chartered Accountants Program spaces in myLearning.
Above all, work hard to achieve the exam results you want and to set yourself up for a successful career
as a Chartered Accountant.
Yours faithfully,
Robyn Le Grew FCA
Senior Teaching CA
charteredaccountantsanz.com
Copyright © Chartered Accountants Australia and New Zealand 2022. All rights reserved.
This publication is copyright. Apart from any use as permitted under the Copyright Act 1968 (Australia) and Copyright Act 1994 (New Zealand), as applicable, it may not be copied, adapted, amended, published,
communicated or otherwise made available to third parties, in whole or in part, in any form or by any means, without the prior written consent of Chartered Accountants Australia and New Zealand.
Contents
Introduction i
Module outline ii
Present and future value tables 1
Unit 1: Financial reporting 1-1
Unit 2: Presentation of financial statements 2-1
Unit 3: Revenue 3-1
Unit 4: Income taxes 4-1
Unit 5: Foreign exchange 5-1
Unit 6: Fair value measurement 6-1
Unit 7: Property, plant and equipment 7-1
Unit 8: Intangible assets 8-1
Unit 9: Financial instruments 9-1
Unit 10: Impairment of assets 10-1
Unit 11: Provisions, employee benefits, contingent liabilities and contingent assets 11-1
Unit 12: Leases 12-1
Introduction to units 13–15 13-i
Unit 13: Business combinations 13-1
Unit 14: Accounting for subsidiaries 14-1
Unit 15: Equity accounting 15-1
Unit 16: Earnings per share (EPS) 16-1
Unit 17: Share-based payments 17-1

Chartered Accountants Program Financial Accounting & Reporting
Introduction
Welcome to the Financial Accounting & Reporting (FIN) module. This module will develop
your understanding of the conceptual framework for financial reporting, and enable you to
reference Accounting Standards and pronouncements and apply your knowledge to various
practical scenarios.
Learning model
The Chartered Accountants Program (the Program) material has been constructed applying
the learning principles of ‘tell, show, do’ to learning objectives devised for each unit. Each unit
is made up, primarily, of core content, worked examples, activities and a unit quiz.
TELL SHOW DO
+ +
Tell me the relevant Show me how to Can I do the task
theory do the task unassisted?
How the material is constructed
The material is delivered in two modes:
1. The Candidate Study Guide (CSG) – this print pack, and
2. myLearning – our online environment.
Where do I start?
• The module outline (included in this pack).
• The module plan (included in this pack), to help structure your studies.
• The online orientation video, to introduce you to myLearning.
• Past papers library (available in myLearning), to understand how topics are addressed
in exams.
It is best to work through the Candidate Study Guide (CSG) units in order. The CSG provides
the ‘Tell’ part of your learning, giving core principles and basic examples. The CSG also directs
you to required readings, which are an essential part of your studies in FIN.
Good luck!
The Chartered Accountants Program is challenging. It is designed to be the best educational
product it can be for you, the future practitioners in this profession. As it constantly evolves,
Chartered Accountants Australia and New Zealand will continually be actively seeking your
feedback to ensure the Program meets the learner’s needs now and for future development.
We hope you find your journey through the Program a rewarding and enjoyable experience
and encourage you to work steadily through the material. If you require further assistance,
post your questions on the discussion forum.
Finally, best of luck with your studies. We look forward to conversing with you on the
discussion forum online over the course of your studies.
Robyn Le Grew
Senior Teaching CA
Introduction Page i
Financial Accounting & Reporting Chartered Accountants Program
Module outline
Overview
Financial accounting is a pivotal aspect of an accountant’s work and is the main reporting
mechanism for preparing financial statements for organisations across all sectors of the economy.
FIN includes practical examples and activities that will develop your understanding of
the conceptual framework for financial reporting, and enable you to reference Accounting
Standards and pronouncements and apply your knowledge to a variety of practical scenarios.
The FIN module is one of the five compulsory modules in the Chartered Accountants Program.
It requires a good understanding of financial accounting from a candidate’s previous tertiary
studies.
How is the FIN module taught?
The FIN module is 12 weeks in duration and offers flexible learning options with the delivery of
materials online through myLearning. myLearning is accessible after you enrol in the module
by logging into myAccount and selecting myLearning.
Assumed knowledge
It is assumed that candidates have a good understanding of financial accounting and reporting
from their tertiary studies. Detailed below is a summary of the assumed knowledge of the
module:
• Understanding of the relevant framework, in particular the definitions of and recognition
criteria for assets, liabilities, equity, income and expenses.
• Basic understanding of financial accounting and reporting concepts, particularly the general
format and content of a set of financial statements.
• Understanding of the principles of disclosure relating to the presentation of financial
statements.
• Understanding of the principles relating to the selection and changing of accounting
policies.
• Understanding of the accounting treatment and disclosure of changes in accounting
policies, accounting estimates and corrections of errors.
• Basic understanding of revenue recognition requirements.
• Understanding of the principles of accrual accounting.
• Basic understanding of the taxation treatments for assets, liabilities, income and expenses.
• Understanding of accounting for inventory.
• Basic understanding of accounting for property, plant and equipment and intangible assets.
• Basic understanding of the principles of consolidated financial statements.
• Basic understanding of accounting for intragroup transactions.
• Basic understanding of acquired goodwill – its nature and accounting treatment under the
relevant standard on business combinations.
• Understanding of the concept of the time value of money and discounted cash flows and
how to calculate its impact.
• Understanding of accounting for equity.
• Understanding of accounting for the issue of equity and movements in retained earnings
and other reserves.
• Basic understanding of the accounting for income tax.
Page ii Introduction
Chartered Accountants Program Financial Accounting & Reporting
• Basic understanding of the accounting for a business combination.
• Understanding of the translation of an amount from one currency to a foreign currency.
Candidates can check their assumed knowledge for each of the technical modules by taking the
Quiz in myLearning.
Suggested module plan and time allocation
The expected workload for this module is a minimum of 10 hours per week over 12 weeks, or
120 hours in total, excluding module orientation, online assessments, final exam and study time
for the final exam. Candidates are advised to plan their enrolment carefully around work and
other commitments, to ensure they are able to devote the time required to their studies.
The suggested module plan with key dates for FIN122 is provided below. It is also available on
myLearning.
Introduction Page iii
Financial Accounting & Reporting Chartered Accountants Program
Suggested module plan
MODULE COMMENCEMENT
21 March 2022
WEEK 1 Unit 1 Financial reporting (8 hrs)
H commencing Unit 2 Presentation of
RC 21 March financial statements (3 hrs)
A
M
WEEK 2
Unit 2 Presentation of financial statements
commencing
28 March – specific standards (10 hrs)
WEEK 3
Unit 3 Revenue (8 hrs)
commencing ONLINE ASSESSMENT 1
4 April Unit 4 Income taxes (9 hrs) 7 – 11 April

Covering Units 1-4
WEEK 4 Unit 5 Foreign exchange (4 hrs)
CENSUS DATE Results: released by 15 April
commencing Unit 6 Fair value measurement (4 hrs)
11 April Unit 7 Property, plant & equipment (5 hrs) 8 April
L
RI
P
A WEEK 5
Unit 8 Intangible assets (5 hrs) INTEGRATED
commencing ACTIVITY 1
18 April Unit 9 Financial instruments Part A (9 hrs)
(1.5 hrs)
WEEK 6
Unit 9 Financial instruments Part B (6 hrs)
commencing Catch-up week ONLINE ASSESSMENT 2
25 April
28 April – 2 May

Covering Units 5-9
WEEK 7
Unit 10 Impairment of assets (5 hrs) Results: released by 6 May
commencing
2 May Unit 11 Provisions, employee benefits,
contingent liabilities and contingent assets (4 hrs)
WEEK 8
Unit 12 Leases (5 hrs) INTEGRATED
commencing
9 May Unit 13 Business combinations (5 hrs) ACTIVITY 2
(1 hr)
WEEK 9
Y
MA commencing Unit 14 Accounting for subsidiaries (12 hrs) ONLINE ASSESSMENT 3
16 May 19 – 23 May
Covering Units 10-14

WEEK 10
Unit 15 Equity accounting (3 hrs) Results: released by 27 May
commencing Unit 16 Earnings per share (3 hrs) INTEGRATED
23 May ACTIVITY 3
(2 hrs)
WEEK 11
commencing Unit 17 Share-based payments (4 hrs)
30 May
INTEGRATED
REVISION ACTIVITY
WEEK 12 Exam (3.5 hrs)
commencing preparation
E 6 June
N
U STUDY BREAK
J EXAM
commencing
21 June 2022
13 June
Results: 15 July 2022
Page iv Introduction