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AL2: ADVANCED FINANCIAL REPORTING AND ANALYSIS
Learning Objectives

The objective of the syllabus is to develop comprehensive understanding of international pronouncements related to financial reporting.

Key Competencies

On successful completion of this exam, the student shall be able to:

  • Prepare group financials statements
  • Account for retirement benefits and prepare the related financial statements.
  • Prepare accounts for non-profit entities and accounts from incomplete records.
  • Account for the transactions related to non-current tangible and intangible assets as per related Standards
  • Understand and apply accounting pronouncements related to Taxation, contingencies and changes in accounting estimates, policies and errors.
  • Account for the transactions related to government grants, leases, and investment property in accordance with international pronouncements.
  • Account for the financial instruments
  • Analyze and interpret the financial information contained in the financial statements. Prepare journals and ledger accounts.

GRID Weightage
Consolidated financial statements 25-30
Employee benefits and special areas 20-25
Financial instruments and non current assets held for sales 25-30
Share based payments Fair Value measurements, SME reporting, EPS 15-25
Interpretation of financial statements 15-20
Total 100
Components
Consolidated Financial Statements (IFRS 3, IFRS 10, IFRS 11, IFRS 12, IAS 27, IAS 28)

  • Demonstrate the concept of group and identify parent, subsidiary and associate.
  • Fair value adjustments and their impact on goodwill
  • Accounting for goodwill impairment
  • Prepare consolidated financial statements of simple group as per IFRS 10.
  • Elimination of inter group transactions and profits.
  • Accounting for non-controlling interests.
  • Accounting for other reserves
  • Accounting for associates and joint ventures
  • Accounting for joint arrangements.
  • Preparation of consolidated cash flow statement.
  • Consolidation of foreign operations
  • Preparation of group financial statements operations have been discontinued, acquired or disposed off.
  • Related party disclosures

Employees benefits and Specialized Areas(IAS 19, IAS 26,IFRS1, IFRS4, IFRS6, IFRS14)
  • Accounting for defined contribution plans and defined benefit plans.
  • Accounting for asset ceiling test and actuarial gains a losses reporting.
  • Reporting requirements of retirement benefit plans.
  • Insurance Contracts
  • First time adoption of IFRS
  • Exploration and evaluation of mineral resources
  • Regulatory deferral accruals.
  • Financial Reporting in Hyper Inflationary Economies.

Share based payments, Fair Value Measurement, Earning per share (IFRS2, IFRS13, IAS 33), SME Reporting
  • Recognition and measurement of share based payment.
  • Accounting for cancellations, settlements and modifications of share based payments. payments.
  • Definition of fair value measurements and active market.
  • Use of valuation technique by an entity.
  • Fair Value Hierarchy application.
  • Principles of highest and best use, most advantageous and principal. market
  • Differentiate between accounting treatment of SME standards and full IFRS Standards.
  • Earnings per share

Financial Instruments, Disclosure and Presentation ) and Non Current Assets held for sales and discontinued operations (IFRS 9,IFRS 7 ,IAS 32, IFRS5)
  • Accounting of derivative financial instruments.
  • Impairment of financial instruments.
  • Classification of financial instrument as equity or liability.
  • Offsetting of financial assets and liabilities
  • Disclosure requirements related to financial instruments
  • Accounting for non current Assets held for sale and discontinued operations
Interpretation of Financial Statements
  • Explain horizontal and vertical analysis of financial statements
  • Calculation of ratios used is financial statements analysis along with their relevance for respective users of financial statements.
  • Interpretation of ratios to describe the performance of entity from various stakeholders’ perspective.
  • Explain the limitations of financial statements analysis.
  • Explain how the changes in accounting policies and estimates can affect the ratio analysis.
  • Discuss the impact of historical cost concept used in financial statement could differ the performance perspective as compared to use of current values.