Free ACCA Paper F7 Course notes PDF
Preview Free ACCA Paper F7 Course notes
Paper FinAnciAl reporting F7 (INTERNATIONAL) ACCA QuAlifiCAtion Course notes June 2011 examinations OpenTuition Course Notes can be downloaded FREE from www.OpenTuition.com Copyright belongs to OpenTuition.com - please do not support piracy by downloading from other websites. Visit opentuition.com for the latest updates, watch free video lectures and get free tutors’ support on the forums Free ACCA Notes & Lectures by Paper (online on http://opentuition.com/acca/) F1 Accountant in Business F2 Management Accounting F3 Finanticial Accounting F4 Corporate & Business Law F5 Performance Management F6 Taxation (UK) F7 Financial Reporting F8 Audit and Assurance F9 Financial Management P1 Governance, Risk & Ethics P2 Corporate Reporting P3 Business Analysis P4 Advanced Financial Management P5 Advanced Performance Management P6 Advanced Taxation (UK) P7 Advanced Audit & Assurance The besT Things For the latest free course notes, free lectures and forum support please visit opentuition.com/acca in life are free Paper F7 June 2011 Examinations Paper F7 Contents 1 Financial Reporting – basic concepts 1 2 The regulatory framework 5 3 Published Financial Statements 9 4 IFRS5 – Discontinued operations and assets held for sale 19 5 IAS 8 23 6 Group Accounts: An Introduction 27 7 Preparation of the Consolidated Statement of Financial Position 33 8 Group Accounts: Inter-entity Transactions 47 9 Group Accounts: Comprehensive Example 55 10 Preparation of the Consolidated Statement of Comprehensive Income 57 11 Accounting for Investments in Associates (IFRS3 Revised) 63 12 IAS 2 Inventories 67 13 IAS 11 Construction Contracts 69 14 IAS 36 Impairment of Assets 77 15 IAS 37 Provisions, Contingent Liabilities and Contingent Assets 81 16 IAS 17 Leases 87 17 IAS 23 Borrowing Costs 93 18 IAS 12 Income Taxes 95 19 IAS 7 (Revised): Statements of Cash Flows 101 20 Interpretation of Accounts – Ratio Analysis 111 21 IAS 33 Earnings Per Share 117 22 Theoretical matters 125 23 IAS 16 Property, Plant and Equipment 129 24 IAS 18 Revenue 131 25 IAS 20 Government Grants 133 26 IAS 38 Intangible Assets 135 27 IAS 40 Investment Properties 137 28 IAS 32 IAS 39 139 Answers to Examples 149 Mini Exercises – Questions 191 Mini Exercises – Answers 203 OpenTuition Course Notes can be downloaded FREE from www.OpenTuition.com Copyright belongs to OpenTuition.com - please do not support piracy by downloading from other websites. Visit opentuition.com for the latest updates, watch free video lectures and get free tutors’ support on the forums Free resources for accountancy students Ask the Tutor one forum To Free ACCA Tutors’ Support rule Them all only on opentuition.com Paper F7 1 June 2011 Examinations Chapter 1 FinanCial RepoRting – basiC ConCepts Underlying assumptions • accruals • going concern • consistency • materiality • off-setting example 1 Laima has recently bought a shop called Sweet for $1 million and included the full amount in her cost of sales account. How does each of the five concepts affect the way Laima should treat the cost of $1 million? For latest course notes, free audio & video lectures, support and forums please visit 2 Chapter 1 Paper F7 Financial Reporting – basic concepts June 2011 Examinations Advantages and disadvantages of standardisation of accounting practices • provide a focal point for debate • require disclosure of policies adopted • encourage global discussion • flexible • enable meaningful comparison • reduce penumbral areas of divergent possibilities • pressure groups may succeed in asking for amendments • allowed alternative treatments – standardisation? • inappropriate treatment could result from following a standard • rules take away use of skill and judgement A conceptual framework • framework has been developed defined as “a constitution, a coherent system of interrelated objectives and fundamentals which can lead to consistent standards and which prescribe the nature, function and limits of financial accounting and financial statements” • generally accepted accounting practice ( gaap ) • a combination of: • each country’s own law • international financial reporting standards • stock exchange requirements • but gaap does not have any statutory authority • changes and evolves with changing circumstances For latest course notes, free audio & video lectures, support and forums please visit Chapter 1 Paper F7 3 Financial Reporting – basic concepts June 2011 Examinations The framework • provides a set of principles • purpose defined as assisting:- • IASC in development of new standards • review of existing standards • harmonisation of standards and procedures • reduction of penumbral areas of divergent possibilities • development of new standards by national accounting bodies • preparers of financial statements • auditors in forming audit opinions • users in their interpretation of financial statements Framework contents • objectives of financial statements • underlying assumptions ( accruals and going concern ) • qualitative characteristics ( see next ) • elements of financial statements (assets, liabilities, equity, income, expenses and capital maintenance) • recognition of the elements • measurement • concept of capital and capital maintenance • as a set of principles, it requires entities to follow the spirit of the framework • it’s not a standard, so does not override any existing standard requirements • nor does it define any standard for measurement or disclosure of any particular issue For latest course notes, free audio & video lectures, support and forums please visit 4 Chapter 1 Paper F7 Financial Reporting – basic concepts June 2011 Examinations Framework – qualitative characteristics • understandable • comparable • relevant • faithful representation • complete • material • substance over form • reliable • neutral • prudent (you can remember framework contents. Mike says remember nine principles!) For latest course notes, free audio & video lectures, support and forums please visit Paper F7 5 June 2011 Examinations Chapter 2 The regulaTory framework • IFRS produced by the profession ( IASC ) • identify required accounting treatment for items within financial statements • sometimes with allowed alternatives • reduce penumbral areas of divergent possibilities • apply whenever financial statements intend showing a true and fair view • non-compliance must be explained • IASC has three formal objectives • to develop, in the public interest, a single set of high quality, understandable and enforceable global financial reporting standards that require high quality, transparent and comparable information in financial statements and other financial reporting to help global investors and other users make informed and meaningful economic decisions. • to promote the use and strict application of those standards; and • to bring about consistency of national and international financial reporting standards. example 1 What are the advantages and disadvantages of international harmonisation of financial reporting standards? For latest course notes, free audio & video lectures, support and forums please visit 6 Chapter 2 Paper F7 The regulatory framework June 2011 Examinations The structure of the IASB Monitoring Board Approve and Oversee Trustees IFRS FOUNDATION 22 TRUSTEES Appoint, Oversee, Raise Funds BOARD 16 (maximum 3 part-time Set technical agenda. Approve Standards, Exposure Drafts and Interpretations IFRS ADVISORY COUNCIL IFRS INTERPRETATIONS COMMITTEE Approx: 40 members 14 members Working Groups For Major Key Agenda Projects Appoints Reports to Advises • standard setting process Consultative group (views) Steering committee (discuss) Board (accept) Steering committee Statement of principles (issued) Exposure draft (issued) Comments from 3rd parties ¾ Board approval IFRS For latest course notes, free audio & video lectures, support and forums please visit
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