March 2021

Frameworks The professional and ethical duty of the accountant Performance reporting and performance appraisal Revenue Non-current assets, agriculture and inventories Foreign currency in individual financial statements Leases Employee benefits Share-based payment Events after the reporting period, provisions and contingencies Financial instruments Tax Segment reporting Related parties Adoption of International Financial Reporting Standards Specialised entities and […]

Test your understanding 1 – Cookie   Cookie, a company, prepares its financial statements in accordance with International Financial Reporting Standards. It has investments in two other companies, Biscuit and Cracker. The statements of financial position of all three companies as at 30 April 20X4 are presented below:     Cookie Biscuit Cracker   Non-current

1 Purpose of chapter     The P2 UK paper   This chapter contains the additional syllabus content required for those who are sitting the P2 UK paper.   If you are sitting the P2 INT paper then you do not need to study this chapter.       2 UK GAAP     UK

Objective of statements of cash flows   IAS 7 Statement of Cash Flows provides guidance on the preparation of a statement of cash flows. The objective of a statement of cash flows is to provide information on an entity’s changes in cash and cash equivalents during the period.   The statement of financial position and

Definition of a group reorganisation   A group reorganisation (or restructuring) is any of the following:   the transfer of shares in a subsidiary from one group entity to another   the addition of a new parent entity to a group   the transfer of shares in one or more subsidiaries of a group to

Key definitions   Foreign currency transactions in the individual financial statements of a company were covered earlier in this text.   Below is a reminder of some key definitions:   The functional currency is the currency of the ‘primary economic environment where the entity operates’ (IAS 21, para 8). In most cases   this will

Acquisition of a subsidiary   There are two acquisition scenarios that need to be considered in more detail:   mid-year acquisitions   step acquisitions.   Mid-year acquisitions   A parent entity consolidates a subsidiary from the date that it achieves control. If this happens partway through the reporting period then it will be necessary to

Complex group structures   Complex group structures exist where a subsidiary of a parent entity owns a shareholding in another entity which makes that other entity also a subsidiary of the parent entity.   Complex structures can be classified under two headings:   Vertical groups   Mixed groups.   2 Vertical groups   Definition  

Overview of interests in other entities   The following diagram presents an overview of the varying types of interests in other entities, together with identification of applicable reporting standards. The standards referred to in the diagram above cover a range of group accounting issues:   IFRS 10 Consolidated Financial Statements   IFRS 11 Joint Arrangements

1 Introduction     What is meant by a ‘current issue’?   In relation to ‘current issues’, the ACCA P2 study guide says that candidates need to be able to discuss:   recent IFRS Standards   practice and regulatory issues   proposed changes to IFRS Standards   problems with extant standards.   2 Recent IFRS

Non-financial reporting     Non-financial reporting   Non-financial information, in the form of additional information provided alongside the financial information in the annual report, has become more important in recent years.   While financial information remains important, stakeholders are interested in other aspects of an entity’s performance.   For example:   how the business is

Not-for-profit entities     Reporting not-for-profit entities   A not-for-profit entity is one that does not carry on its activities for the purposes of profit or gain to particular persons and does not distribute its profits or assets to particular persons.   The main types of not-for-profit entity are:   clubs and societies   charities