Financial Reporting

Financial Reporting

Paper F7 (International) Course Notes ACF7CN07 INT

F7 Financial Reporting (International)

Study Programme

Page Introduction to the paper and the course............................................................................................................... (ii)

1 The conceptual framework .......................................................................................................................... 1.1 2 Home study chapter ? The regulatory framework ....................................................................................... 2.1 3 Presentation of published financial statements ........................................................................................... 3.1 4 Tangible non-current assets........................................................................................................................ 4.1 5 Intangible assets ......................................................................................................................................... 5.1 6 Impairment of assets ................................................................................................................................... 6.1 7 Reporting financial performance.................................................................................................................. 7.1

End of Day 1 ? refer to Course Companion for Home Study Progress test 1

8 Introduction to groups.................................................................................................................................. 8.1 9 The consolidated balance sheet.................................................................................................................. 9.1 10 The consolidated income statement.......................................................................................................... 10.1 11 Accounting for associates.......................................................................................................................... 11.1

End of Day 2 ? refer to Course Companion for Home Study Progress test 2

Course exam 1

12 Inventories and construction contracts ...................................................................................................... 12.1 13 Provisions, contingent liabilities and contingent assets............................................................................. 13.1 14 Financial assets and liabilities ................................................................................................................... 14.1 15 The legal versus the commercial view of accounting ................................................................................ 15.1 16 Leases....................................................................................................................................................... 16.1 17 Taxation..................................................................................................................................................... 17.1

End of Day 3 ? refer to Course Companion for Home Study Progress test 3

18 Earnings per share .................................................................................................................................... 18.1 19 Calculation and interpretation of accounting ratios and trends.................................................................. 19.1 20 Limitations of financial statements and interpretation techniques ............................................................. 20.1 21 Cash flow statements ................................................................................................................................ 21.1 22 Alternative models and practices............................................................................................................... 22.1 23 Specialised, not-for-profit and public sector entities .................................................................................. 23.1

End of Day 4 ? refer to Course Companion for Home Study Progress test 4

Course exam 2

24 Answers to Lecture Examples ................................................................................................................... 24.1 25 Question and Answer bank ....................................................................................................................... 25.1 26 Pilot Paper questions................................................................................................................................. 26.1

Don't forget to plan your revision phase!

? Revision of syllabus ? Testing of knowledge ? Question practice ? Exam technique practice

BPP provides revision courses, question days, mock days and specific material to assist you in this important phase of your studies.

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INTRODUCTION

Introduction to Paper F7 Financial Reporting (International)

Overall aim of the syllabus

To develop knowledge and skills in understanding and applying accounting standards and the theoretical framework in the preparation of financial statements of entities, including groups and how to analyse and interpret those financial statements.

The syllabus

The broad syllabus headings are:

A A conceptual framework for financial reporting B A regulatory framework for financial reporting C Financial statements D Business combinations E Analysing and interpreting financial statements

Main capabilities

On successful completion of this paper, candidates should be able to: ? Discuss and apply a conceptual framework for financial reporting ? Discuss a regulatory framework for financial reporting ? Prepare and present financial statements which conform with International Financial Reporting Standards ? Account for business combinations in accordance with International Financial Reporting Standards ? Analyse and interpret financial statements

Links with other papers

Corporate Reporting (P2)

Business Analysis (P3)

Corporate & Business Law (F4)

Financial Reporting (F7)

Audit & Assurance (F8)

Financial Accounting (F3)

This diagram shows where direct (solid line arrows) and indirect (dashed line arrows) links exist between this paper and other papers that may precede or follow it. The financial reporting syllabus assumes knowledge acquired in paper F3 Financial Accounting, and develops and applies this further and in greater depth. Paper P2 Corporate Reporting, assumes knowledge acquired at this level including core technical capabilities to prepare and analyse financial reports for single and combined entities.

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INTRODUCTION

Assessment methods and format of the exam

Examiner: Steve Scott

The examination is a three hour paper and all questions are compulsory. It will contain both computational and discursive elements and some questions will adopt a scenario/case study approach.

Format of the Exam

Question 1 Preparation of group financial statement and/or extracts thereof, often including an associate, and normally including a short discussion element

Question 2 Preparation/restatement of non-group financial statements, including adjustments on other areas of the syllabus

Question 3 Appraisal of an entity's performance and/or cash flow statements and interpretation thereof

Question 4 Will test the remainder of the syllabus

Question 5

Marks 25

25

25

15 10 100

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INTRODUCTION

Course Aims

Achieving ACCA's Study Guide Outcomes

A A conceptual framework for financial reporting

A1 The need for a conceptual framework A2 Relevance, reliability, comparability and understandability A3 Recognition and measurement A4 The legal versus the commercial view of accounting A5 Alternative models and practices A6 The concept of 'faithful representation' ('true and fair view')

B A Regulatory framework for financial reporting

B1 Reasons for the existence of a regulatory framework B2 The standard setting process B3 Specialised, not-for-profit and public sector entities

C Financial statements

C1 Cash flow statements C2 Tangible non-current assets C3 Intangible assets C4 Inventory C5 Financial assets and financial liabilities C6 Leases C7 Provisions, contingent liabilities and contingent assets C8 Impairment of assets C9 Taxation C10 Regulatory requirements relating to the preparation of financial statements C11 Reporting financial performance

D Business combinations

D1 The concept and principles of a group D2 The concept of consolidated financial statements D3 Preparation of consolidated financial statements including an associate

Chapter 1 Chapter 1 Chapter 1 Chapter 15 Chapter 1 Chapter 1

Chapter 2 Chapter 2 Chapter 23

Chapter 21 Chapter 5 Chapter 6 Chapter 12 Chapter 14 Chapter 16 Chapter 13 Chapter 7 Chapter 17 Chapter 3 Chapter 4

Chapter 8 Chapter 8 Chapters 9-11

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INTRODUCTION

E Analysing and interpreting financial statements

E1 Limitations of financial statements E2 Calculation and interpretation of accounting ratios and trends to address users' and

stakeholders' needs E3 Limitations of interpretation techniques E4 Specialised, not-for-profit and public sector entities

Chapter 20 Chapter 19

Chapter 20 Chapter 23

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INTRODUCTION

Classroom tuition and Home study

Your studies for BPP consist of two elements, classroom tuition and home study.

Classroom tuition

In class we aim to cover the key areas of the syllabus. To ensure examination success you will to spend private study time reinforcing your classroom course with question practice and reviewing areas of the Course Notes and Study Text.

Home study

To support you with your private study BPP provides you with a Course Companion which helps you to work at home and aims to ensure your private study time is effectively used. The Course Companion includes a Home Study section which breaks down your home study by days, one to be covered at the end of each day of the course. You will find clear guidance as to the time to spend on various activities and their importance. You are also provided with progress tests and two course exams which should be submitted for marking as they become due. These may include questions on topics covered in class and home study.

BPP Learn Online

Come and visit the BPP Learn Online free at acca/learnonline for exam tips, FAQs and syllabus health check.

ACCA Forum

We have thriving ACCA bulletin boards at accaforum. Register and discuss your studies with tutors and students.

Helpline

If you have any queries during your private study simply contact your class tutor on the telephone number or e-mail address that they will supply. Alternatively, call +44 (0)20 8740 2222 (or your local training centre if outside the London area) and ask for a tutor for this paper to speak to you or to call you back within 24 hours.

Feedback

The success of BPP's courses has been built on what you, the students tell us. At the end of the course for each subject, you will be given a feedback form to complete and return. If you have any issues or ideas before you are given the form to complete, please raise them with the course tutor or relevant head of centre. If this is not possible, please email ACCAcoursesfeedback@.

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