Acca P2 Pass Card

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ACCA P2 (International)
Course Overview

GROUP ACCOUNTING – BASIC GROUPS

Statement of financial position – standard workings
Group structure

Retained earnings

Net assets

Noncontrollin g interests

Goodwill

Statement of comprehensive income – standard workings
Group structure

Retained earnings b/fwd

Net assets at aq’n

Noncontrolling interests

Goodwill

Consol’n schedule

Accounting for associates
Group structure Share of retained earnings at each SOFP date

Not part of group for consolidation

Net assets at aq’n

Share of profit for the year in SOCI Share of net assets at SOFP date

Goodwill

Accounting for joint ventures

Jointly controlled operations

Jointly controlled entities

Jointly controlled assets

COMPLEX GROUPS

DISPOSALS AND GROUP REORGANISATIONS

Full disposal of subsidiary or associate

Partial disposal of subsidiary

Reasons for reorganisations
Seek listing on public exchange

Reverse acquisition

Disposal of subsidiary

Demerger

Divisionalisati on

GROUP ACCOUNTING FOREIGN CURRENCY

Foreign currency

Functional currency
Currency of the primary economic environment

Presentation currency
Currency in which financial statements are presented

Foreign currency – individual transactions
Principle – use rate ruling at transaction date

Gain/loss on retranslation to SOCI

May use average rate for SOCI transactions

Monetary items retranslated at SOFP date

Nonmonetary items left at historic rate

GROUP STATEMENT OF CASHFLOWS

Proforma statement of cash flows per IAS 7
$ Operating activities Profit before tax Add: interest payable Less: Income from associate Adjust for noncash items dealt with in arriving at operating profit: Add: depreciation Add: loss on impairment Add: loss on disposal of noncurrent assets Add: increase in provisions $ X X (x) Investing activities Payments to purchase NCA Receipts from NCA disposals Cash paid to acquire subsidiary (net of cash balances acquired) Cash proceeds from subsidiary disposal (net of cash balances disposed) Dividend received from associate Interest received X Net cash flow from investing activities Financing activities Proceeds from share issue Proceeds from loan or debenture issue Cash repayment of loans or debentures Finance lease repayments Equity dividend paid Dividend paid to NCI Net cash flow from financing activities Change in cash and equivalents for the year Cash and equivalents brought forward Cash and equivalents carried forward (X) X (X) X X ––– X(X) X X (X) (X) (X) (X) ––– X(X) ––– X(X) X(X) ––– X(X) –––

X X X X –– X (X) (X) (X) ––

Changes in working capital: Increase in inventory Increase in receivables Decrease in payables Cash generated X Interest paid Taxation paid Net cash generated from operating activities

(X) (X) –– X

THE PROFESSIONAL AND ETHICAL DUTY OF THE ACCOUNTANT

ACCA/IFAC Code of Ethics
Confidential ity

Professiona l behaviour

Objectivity

Competenc e and due care

Integrity

THE FINANCIAL REPORTING FRAMEWORK

Financial Reporting Framework

PERFORMANCE REPORTING

Examples of off-balance sheet financing
Consignmen t inventory

Quasisubsidiaries

Receivables factoring

Sale and repurchase

Earnings per share – IAS 33
Basic calculation

Issue at full price

Bonus issue

Rights issue

Diluted earnings per share
Convertible shares & stock

Conditional right to acquire shares

Employee shares schemes

Partly paid shares

Warrants & options

EMPLOYEE BENEFITS

Employee benefits – IAS 19

SHARE-BASED PAYMENT

How fair value is determined

SEGMENT REPORTING

RELATED PARTIES

Related parties – IAS 24

NON-CURRENT ASSETS & INVENTORIES

Inventories (IAS 2)
• Inventories are measured at the lower of cost and net realisable value. – Cost includes all purchase costs, conversion costs and other costs incurred in...
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