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PL3: Financial Reporting AND ANALYSIS
Learning Objectives

The objective of the syllabus is to build on the knowledge of fundamentals of accounting acquired at foundation level in application of IAS and IFRS in preparation and interpretation of financial statements

Key Competencies

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

  • Apply International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) in preparation of 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
Non profit entities and incomplete records 15-20
Accounting for non-current assets 25-30
Leases and financial instruments 20-30
Accounting for taxes and revenues 20-30
Other Accounting Areas 20-30
Total 100
Components
Preparation of non profit entities financials statements & Incomplete records

  • Preparation of income and expenditure accounts
  • Preparation of receipt and payments account
  • Preparation of financial statements from incomplete records and gripping the techniques used for preparation of such financials statements.

Accounting for non-current assets (IAS 16, IAS 20, IAS 23, IAS 36, IAS 40, IAS 38)
  • Recognition and measurement of non-current assets including borrowing costs treatment.
  • Capitalization of subsequent expenditure
  • Asset accounting under revaluation model
  • Accounting and disclosures of government grants
  • Measurement of recoverable amount
  • Accounting and disclosures of impairment expense and reversal impairment loss
  • Differentiate between accounting treatment of investment properties and other properties.
  • Criteria for initial recognition and measurement of intangible assets and their subsequent accounting treatment.
  • Differentiate between goodwill and other intangible assets
  • Accounting for recognition, de-recognition and measurement of non-current intangible assets

Leases and Financial Instruments (IFRS 9 including IFRIC 16& 19 IFRS 16)
  • Recognition, classification and measurement of financial assets and liabilities.
  • De-recognition of financial assets and liabilities
  • Accounting for factoring of receivables.
  • Debt and equity capital.
  • Accounting treatment for leases including sales and lease back transactions.
  • Describe the exemption available to lessee from recognition criteria for leases

Taxes, Revenue, Operating Segment (IAS 12, IFRS 15, IFRS8)
  • Accounting for current taxes
  • Explain the temporary and permanent timing differences.
  • Measurement and accounting for deferred taxation.
    • Sale of goods
    • Rendering of services.
  • Understanding of the concept of operating segment and its disclosure requirements

Other Accounting Areas (IAS 8, IAS 10, IAS 37)
Provisions Contingent liabilities and Contingent assets (IAS37)
  • Differentiate between provision, contingent assets and liabilities
  • Recognition and de recognition of provisions.
  • Accounting for changes in provisions, restoration and decommissioning.
Accounting Policies, Changes in Accounting Estimates, and errors (IAS 8)
  • Under the concept of accounting policies, estimates and errors
  • Accounting treatment of changes in accounting policies and estimates.
Events Occurring After the Balance Sheet Date (IAS10)
  • Understanding of adjusting and non adjusting events and the related accounting.
  • Going concern evaluation after the reporting date.