Technical articles

A library of articles to help you develop broader insight into the subject, split by syllabus section.

Discuss and apply a conceptual and regulatory frameworks for financial reporting (A)

Extreme makeover – IASB edition

The International Accounting Standards Board has now published a new version of the Conceptual Framework, and this article considers some of the more significant changes to the Conceptual Framework that the Board has made.

Account for transactions in accordance with International IFRS Standards (B)

Intangible assets – can’t touch this 
(listen to the podcast)
IAS® 38, Intangible Assets is one of the key standards in the FR exam, covering how companies should account for intangible assets. This standard can be examined in all sections of the exam. A well-prepared candidate needs to be able to understand and explain the key principles of the standard, in addition to preparing calculations.

IFRS 15 – Contract Assets and Contract Liabilities
Application of IFRS® 15, Revenue from Contracts with Customers became mandatory for annual reporting periods beginning on or after 1 January 2018. For many entities, the introduction of IFRS 15 has had little effect on how revenue is accounted for. However, some industry sectors have felt a much greater impact. 

Financial instruments
International Financial Reporting Standard (IFRS®) 9, Financial Instruments, is a complex standard, especially for users and preparers of financial statements. It is relevant to the Financial Reporting syllabus, so this article takes a high-level review of its application to financial assets, financial liabilities, and convertibles.

IAS 37 – Provisions, contingent liabilities and contingent assets
This article considers the aims of the IAS® 37, followed by the key specific criteria which must be met for a provision to be recognised. Finally, it will examine some specific issues which are often assessed in relation to the standard.

IFRS 16, Leases
The purpose of this article is to summarise the key changes introduced by IFRS 16 from the perspective of the lessee and how these impact on the Financial Reporting exam.

Revenue revisited
This article considers the application of IFRS 15, Revenue from Contracts with Customers using the five-step model.

Deferred tax
Deferred tax is a topic that is regularly tested in Financial Reporting (FR) and is often tested in further detail in Strategic Business Reporting (SBR). This article will consider the aspects of deferred tax that are relevant to FR.

Property, plant and equipment – part 1: Measurement and depreciation
In the first of three articles, we look at the main features of IAS 16, Property, Plant and Equipment (PPE).

Property, plant and equipment – part 2: Revaluation and derecognition
In the second of three articles, we consider revaluation of property, plant and equipment and its derecognition.

Property, plant and equipment – part 3: Summary and detailed examples
The final part of three articles summarises some of the key issues outlined in the previous two articles and provide further examples for you to attempt, including some more detailed requirements.

Accounting for goodwill
Accounting for goodwill is a key part of business combinations and is therefore regularly examined as part of the FR exam. (Covers B & D)

Analyse and interpret financial statements (C)

Analysing a statement of cash flows
A key part of the Financial Reporting exam is the ability to analyse a set of financial statements. The statement of cash flows is one of the primary financial statements, and Financial Reporting candidates must be able to explain the performance of an entity based on all of the financial statements including the cash flows given.

Tell me a story
This article looks at what the Financial Reporting exam is looking for in the answer to an interpretation question, along with the key weaknesses that are consistently noted in candidate answers. It then examines some of the different types of scenario that candidates might face in the exam, and some key recommendations of items to consider for each.

How to improve your answer to FR interpretation exam questions
This article contains useful advice to help improve your answers to analysis questions whether in the context of a group or a single entity.

Prepare and present financial statements for single entities and business combinations in accordance with International IFRS Standards (D)

Watch your step
The preparation of consolidated financial statements can be an area where candidates either perform very well or make simple mistakes, which could prove costly in the exam. This article looks at the most common errors made. 

The use of fair values in the goodwill calculation
A central part of the Financial Reporting syllabus is accounting for the acquisition of a subsidiary, which will test the concept of fair value; this is the value that the consideration paid for the subsidiary must be recorded. In addition to this, the assets, liabilities and contingent liabilities of the subsidiary must also be consolidated at their fair value. This article considers these values in each element of the calculation.

Accounting for goodwill
Accounting for goodwill is a key part of business combinations and is therefore regularly examined as part of the FR exam. (Covers B & D)

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