Changes to the ACCA Qualification and Foundation level in 2015-16

This article explains the planned updates to the ACCA Qualification syllabuses taking place as part of the process of continuous syllabus refreshment and improvement.

Introduction

The exam year runs from the 1 September to 31 August the following year, for all papers except tax*. Therefore the next syllabus changes will be effective from 1 September 2015 and will include any changes to examinable documents issued up until 1 September 2014.

*The exam year for most tax papers is 1 April 2015 to 31 March 2016 (extended for the UK tax papers to 30 June 2016 due to the uncertainty over the timing of Finance Acts in 2015), with Malaysia and Czech Republic being exceptions. You should refer to the study guide and examinable documents for details of what legislation is examinable in the tax papers.

For paper-based exams the updated syllabus will be examined for the first time in the September exam session and for exams available by on-demand CBE (F1, F2, F3 and F4 ENG and GLO) the updated syllabus will be examined from 23 September 2015.

Also be aware that from September 2015 ACCA will be offering four exams a year at the Fundamentals and Professional level. This is being phased in. The September 2015 session will be limited to particular markets but will take effect in all of our markets from March 2016. Exams which can be taken via on demand CBE (FIA, F1–F3, F4 ENG and GLO) and some variant exams for the F4–P7 will not be available during the March/September exam sessions.

There are no new structural changes to the ACCA Qualification in 2015–16. The most recent significant changes were made to the Fundamental level syllabuses in February and December 2014 which were carefully detailed in last year’s article as part of ACCA’s policy of rolling out of more objective testing at the Fundamentals level to the F5–F9 exams. Please note that the structural changes to most F6, Taxation exams will be implemented in June 2015*. (The annual syllabus update to reflect the UK Finance Act 2014 also takes place at this time.)

*Structural changes to F6 Malaysia and Czech Republic will be effective from December 2015 to coincide with the next annual syllabus update for those exams, also effective from December 2015.

There are some syllabus changes to the ACCA Qualification in 2015–16. Apart from the two tax papers (F6 and P6) where syllabus changes relating to the new tax year for these exams will take effect from June 2015, these are all planned for September 2015.

For information about changes relating to content in each exam, please access the specific syllabus and study guide links on the website.

With regard to the ACCA Qualification Skills module (F4, F5, F7, F8 and F9) there are some syllabus updates from September 2015 to announce. These changes are needed to ensure that the ACCA Qualification continues to comply with the appropriate regulatory standards, to improve the articulation between related syllabuses and to reflect the views of our key stakeholders. This will be described in the relevant F4–F9 syllabus changes (see detailed changes below). At the Professional level there are also some syllabus changes to announce. Therefore, the content of the ACCA syllabuses at all levels is being continually refreshed and updated to adapt to the latest business and accounting sector needs. Because it falls in line with the tax year, P6, Advanced Taxation* will be updated as usual in June 2015.

In all cases, please refer to the relevant study guides at the appropriate time for full details of changes for the papers you are particularly interested in. The summary of syllabus updates and changes for each examination is also included at the back of each study guide.

The last structural and syllabus changes to the Foundations level and Certified Accounting Technicians (CAT) took place in February 2014, relating to the Foundations level syllabuses. F4 (ENG) and (GLO) exams changed structure and were made available by on-demand CBE from November 2014. A new structure for all versions of F4 was introduced in December 2014.

All the detailed changes to the ACCA Advanced Diploma and Professional level syllabuses are summarised below.

ACCA Fundamentals Level (Skills Module)

F4, Corporate and Business Law

There are no syllabus changes planned for the new F4 exam in 2015 since the introduction of the on-demand CBE and new paper-based structure in November/December 2014.

F5, Performance Management

There are no changes planned for the F5 syllabus from September 2015.

F6 (UK), Taxation

Some of the syllabus areas have been reordered as shown in Table 1 below:

Table 1 – Reordering within F6 (UK)

Section and subject area	Syllabus content
Reordering of syllabus areas	The syllabus areas have been reordered so that syllabus area A covers the UK tax system and its administration, B covers income tax and NIC liabilities, C covers chargeable gains for individuals, D covers inheritance tax, E covers corporation tax (including chargeable gains) and F covers VAT.
Enlarged syllabus area A	Syllabus area H (the obligations of the taxpayer and/or their agents) has been combined with syllabus area A to create an enlarged syllabus area A (the UK tax system and its administration).
National insurance	National insurance has been moved and is now included in syllabus area B (Income tax and NIC liabilities)
E3 Chargeable gains for companies	Chargeable gains have been split between individuals (syllabus area C) and companies (syllabus area E3 Corporation tax)

The main areas that have been added to the syllabus are shown in Table 2 below:

Table 2 – Additions to F6 (UK)

Section and subject area	Syllabus content
A2c Principal sources of revenue law and practice	New part c on the organisation HMRC and its terms of reference added
B2 Income from employment – Excluded topics	The exemption where an employer pays for medical treatment. Real time reporting late filing penalties.
B3 Income from self-employment – Excluded topics	The loss relief restriction that applies to the partners of a limited liability partnership.
B3 iv Income from self-employment	New part v on the factors that will influence the choice of loss relief claim added for clarity
B4 Property and investment income – Excluded topics	The ISA investment rules and limits that applied prior to 1 July 2014.
B6b National insurance contributions for employed and self-employed persons	New part b on the annual employment allowance.
E5 The effect of a group corporate structure for corporation tax purposes – Excluded topics	Relief for trading losses incurred by an overseas subsidiary

The main areas that have been deleted from the syllabus are shown in Table 3 below:

Table 3 – Deletions from F6 (UK)

Section and subject area	Syllabus content
B3 Income from self-employment	Part B3j v on the loss relief restriction that applies to the partners of a limited liability partnership deleted.

F7 (INT), Financial Reporting

The main areas to be added or deleted from the syllabus from that date are shown in Table 1 and 2 below:

Table 1 – Additions to F7

A2c	Explain and compute amounts using the following measures: i historical cost ii current cost iii net realisable value iv present value of future cash flows v fair value	The principles of IFRS 13, Fair Value Measurement. have been made more explicit in the F7 syllabus
B5d	Indicate for the following categories of financial instruments how they should be measured and how any gains and losses from subsequent measurement should be treated in the financial statements: i amortised cost ii fair value through other comprehensive income (including where an irrevocable election has been made for equity instruments that are not held for trading) iii fair value through profit or loss	This change has been made to reflect the measurement classifications of IFRS 9, Financial Instruments.
B10	a Explain and apply the principles of recognition of revenue: i Identification of contracts ii Identification of performance obligations iii Determination of transaction price iv Allocation of the price to performance obligations v Recognition of revenue when/as performance obligations are satisfied. b Explain and apply the criteria for recognising revenue generated from contracts where performance obligations are satisfied over time or at a point in time. c Describe the acceptable methods for measuring progress towards complete satisfaction of a performance obligation. d Explain and apply the criteria for the recognition of contract costs. e Apply the principles of recognition of revenue, and specifically account for the following types of transaction: i principal versus agent ii repurchase agreements iii bill and hold arrangements iv consignments f Prepare financial statement extracts for contracts where performance obligations are satisfied over time.	These changes have been made to reflect the principles of IFRS 15, Revenue from contracts with customers.

Table 2 – Deletions to F7

There have been no deletions to the study guide for the exam year commencing 1 September 2015.

F8 (INT), Audit and Assurance

Table 1 – Amendments to F8

Section and subject area	Syllabus content
D4b Amended wording of outcome to refer to cut-off testing rather than the cut-off assertion.	D4b Inventory: i inventory counting procedures in relation to year-end and continuous inventory systems ii cut-off testing
C4a Outcome regarding reporting internal control deficiencies now redefined as two clearer outcomes in relation to discussing the mechanism for reporting deficiencies and preparing example recommendations for inclusion in a management letter.	C4a Discuss the requirements and methods of reporting significant deficiencies in internal control are provided to management and those charged with governance. b Explain, in a format suitable for inclusion in a management letter, significant deficiencies within an internal control system and provide recommendations for overcoming these deficiencies to management.

F9, Financial Management

There are changes to the syllabus to reflect the latest business and educational developments affecting this paper. These are summarised in the table below.

Amendments/additions

Section and subject area	Syllabus content
B3a i	Wording amended to clarify the syllabus content in this area
D4b	Wording amended to clarify the syllabus content in this area
E5d	Wording amended to clarify the syllabus content in this area and also for the addition of newer sources of finance for SMEs

ACCA Professional Level

P1, Governance, Risk and Ethics

The changes are introduced to the syllabus to reflect the latest business and educational developments affecting this paper. These are summarised in the table below:

Section and subject area	Syllabus content
A1c amended to include private sector	c Analyse the purposes and objectives of corporate governance in the public and private sectors.
A7b amended to include the Mendelow matrix	A7b Discuss and critically assess the concept of stakeholder power and interest using the Mendelow model and how this can affect strategy and corporate governance.
New A9e added to include examination of the three Es and public value in public sector governance	A9e Discuss obligations of the public sector organisations to meet the economy, effectiveness, efficiency (three Es) criteria and promote public value
B1c amended to make more explicit reference to fraud and error in respect of internal control	B1c Describe the objectives of internal control systems and how they can help prevent fraud and error.

P2 (INT), Corporate Reporting

Table 1 – Additions to P2 (INT)
There have not been any additions to the study guide for the exam year commencing 1 September 2015. However, there have been minor amendments to the wording of some of the study guide outcomes mainly corresponding to changes within examinable documents.

Section and subject area	Syllabus content
C1b and c	Discuss and apply the criteria that must be met before an entity can apply the revenue recognition model to that contract. Discuss and apply the five-step model which relates to revenue earned from a contract with a customer.
C3d	Apply and discuss the treatment of the expected loss impairment model.
H3a	Discuss current issues in corporate reporting, including: i recent IFRSs ii practice and regulatory issues iii proposed changes to IFRS iv problems with extant standards (This outcome has been expanded to clarify the range of issues that may be tested within this subject area)

Table 2 – Deletions to P2 INT
There have not been no specific deletions from the study guide for the exam year commencing 1 September 2015. A number of outcomes have been combined or removed as detailed in the table below.

Section and subject area (in prior year study guide)	Syllabus content
C6a and b	Outline the principal considerations in developing a set of accounting standards for SMEs
C8a and b	Discuss the reasons why the IFRS for SMEs does not address certain topics.

The syllabus must be read in conjunction with the Examinable Documents list. The main changes for the year from 1 September 2015 are the inclusion of IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments (July 2014), as well as changes in the list of exposure drafts and discussion papers that are examinable.

P3, Business Analysis

The changes are introduced to the syllabus to reflect the latest business and educational developments affecting this paper. These are summarised in the table below.

Summary of changes to P3:

Section and subject area	Syllabus content
New C1e added	Discuss how big data can be used to inform and implement business strategy.
New G1b added	Discuss how the finance function has transformed to enabling an accountant to have a key role in the decision making process from strategy formulation and implementation to its impact on business performance
G1 heading amended	Finance
G2a and b clarified	Evaluate budgeting, standard costing and variance analysis in support of strategic planning and decision making
G2c clarified	Evaluate strategic and operational decisions taking into account risk and uncertainty. (Including using decision trees).

P4, Advanced Financial Management

There are no changes to the syllabus.

P5, Advanced Performance Management

Amendments:

Section and subject area	Syllabus content
A1 Strategic planning and control	A1g amended to; Apply and evaluate the methods of benchmarking performance
C1 Performance management information systems	C1b amended to; Evaluate the compatibility of management accounting objectives and the management accounting information systems
C3d	Wording amended to clarify the syllabus content in this area
E1 Alternative views of performance measurement and management	E1a amended to; Apply and evaluate the ‘balanced scorecard’ approach as a way in which to improve the range and linkage between performance measures E1b amended to; Apply and evaluate the ‘performance pyramid’ as a way in which to link strategy, operations and performance E1c amended to; Apply and evaluate the work of Fitzgerald and Moon that considers performance measurement in business services using building blocks for dimensions, standards and rewards
E2 Strategic performance issues in complex business structures	E2a; Ansoff has been deleted

P6 (UK), Advanced Taxation

Some of the syllabus areas have been reordered as shown below:

Reordering within P6 (UK)

Section and subject area	Amendment
Reordering of syllabus area A	The syllabus areas have been reordered so that syllabus area A1 covers income tax and national insurance, A2 covers chargeable gains, A3 covers inheritance tax, A4 covers corporation tax, A5 covers stamp taxes and A6 covers value added tax, tax administration and the UK tax system
National insurance	National insurance has been moved to syllabus area A1

The main areas that have been added to the syllabus are shown in below:

Additions to P6 (UK)

Section and subject area	Amendment
A1 Income tax	Employee shareholder shares added to section A1c i
A2 Chargeable gains	Seed enterprise investment scheme reinvestment relief has been removed from excluded topics and is now included in section A2g ii
A3 Inheritance tax – Excluded topics	The computation of inheritance tax payable by trustees of an immediate post-death interest trust added to excluded topics

The main areas that have been deleted from the syllabus are shown below:

Deletions from P6 (UK)

Section and subject area	Amendment
A1d – Income from self-employment	Recognise the tax treatment of the investment income of a partnership
A1e – Property and investment income	Assess the tax implications of pre-owned assets
A1g – The use of exemptions and reliefs in deferring and minimising income tax liabilities	Explain the conditions that need to be satisfied for pension schemes to be registered by HM Revenue and Customs
A2e – Gains and losses on the disposal of movable and immovable property	Explain the tax effect of appropriations to and from trading stock (inventory)

The main areas that have been amended or clarified in the syllabus are shown below:

Amendments to P6 (UK)

Section and subject area	Amendment
A2b vi – Identify the occasions when a capital gain would arise on a partner in a partnership	Clarified as Identify the occasions when a capital gain would arise on a partner in a partnership on the disposal of a partnership asset.
A2b – The scope of the taxation of capital gains	Deemed disposals on a change in the profit sharing ratio (PSR) of a partnership moved to excluded topics
A2 Chargeable gains – Excluded topics	Amended to clarify that whilst the detailed calculations for chattels where cost or proceeds are under £6,000 are excluded from the syllabus, knowledge of the exemption where both cost and proceeds are less than £6,000 continues to be examinable.

P7 (INT), Advanced Audit and Assurance

The changes are introduced to the syllabus to reflect the latest business and educational developments affecting this paper. These are summarised in the table below:

Section and subject area	Syllabus content
Heading E6 amended to reference pre-determined objectives	6 The audit of performance information (pre-determined objectives) in the public sector
E6a Amended to add reference to pre-determined objectives	a Describe the audit of performance information (pre-determined objectives) and differentiate from performance auditing
E6b Amended to add reference to pre-determined objectives	b Plan the audit of performance information (pre-determined objectives) and describe examination procedures to be used in the audit of this type of information.
E6c Amended heading to better reflect audit criteria in relation to performance information.	c Discuss the audit criteria of reported performance information, namely compliance with reporting requirements, usefulness, measurability and reliability.

Changes to the Foundations Level and
CAT syllabuses

There are very few changes to the Foundations Level syllabuses. These are detailed below.

Introductory Certificate in Financial and Management Accounting

There are no planned changes to either of the FA1 or MA1 syllabuses for September 2015.

Intermediate Certificate in Financial and Management Accounting

FA2
The planned changes for FA2 are shown below:

Amendments

Section and subject area	Syllabus content
H2 and H3	Headings of areas amended to better reflect content of study guide outcomes
D6g, F1f	Minor wording alterations

Deletions

Section and subject area	Syllabus content
E2b	Outcome deleted as it was a duplication of other study guide outcomes

MA2:
There are no planned changes to MA2.

Diploma in Accounting and Business:

F1/FAB:
There is only one change to the F1/FAB syllabus to make explicit that the Mintzberg organisational model is examinable.

This is highlighted below.

Section and subject area	Syllabus content
B2a amended	a Describe Mintzberg’s components of the organisation and explain the different ways in which formal organisations may be structured: i Entrepreneurial ii Functional iii Matrix iv Divisional: (geographical, by product, or by customer type) v Boundaryless: (virtual, hollow or modular)

F2/FMA
There are no planned changes to F2/FMA:

F3/FFA
The detailed changes to the FFA/F3 syllabus are summarised below.

Section and subject area	Syllabus content
Section D3g has been reworded to clarify that average cost includes both periodic weighted average and continuous weighted average.	g Calculate the value of closing inventory using FIFO (first in, first out) and AVCO (average cost) – both periodic weighted average and continuous weighted average.
Section D5e terminology has been revised.	The term revaluation reserve has been replaced with revaluation surplus.
Terminology has been revised in Section G. This affects G1c iii, G1c iv, G1e i and G1e ii.	The term inter-company trading has been replaced with intra-group trading.

Foundations Specialist Options exams

The main areas that have been changed in the Foundations in Audit (FAU) syllabus are shown below:

Amendments to FAU

Section and subject area	Syllabus content
E3c Identify significant internal control deficiencies and communicate to management and those charged with governance.	Deleted
C4a Identify and define significant internal control deficiencies and explain the requirements and methods for communicating significant deficiencies to management and those charged with governance.	Combined outcome of old E3c and existing C4a.

The main areas that have been changed in the Foundations in Tax (FTX) syllabus are shown below:

Amendments to FTX (UK)

Section and subject area	Syllabus content
B3 Income from property, savings and investments – Excluded topics	Detailed knowledge of the rules and limits for the new individual savings accounts (NISA) other than that income from such accounts is exempt from tax.
C2 Income from employment and class 1 National Insurance Contributions	New outcome C2j Understand the annual employment allowance
C2 Income from employment and class 1 National Insurance Contributions – Excluded topics	The exemption where an employer pays for medical treatment
C2 Income from employment and class 1 National Insurance Contributions – Excluded topics	Real time reporting late filing penalties
D3 Gains and losses on the disposal of shares and securities	D3d Sale of rights – awareness of basic treatment (partial vs. small disposal) only removed from syllabus
D4d Gains and losses on the disposal of movable and immovable property	Clarified as ‘Calculate gains where compensation or insurance proceeds are received for assets lost or destroyed.’

There are no changes to the Foundations in Financial Management (FFM) syllabus.