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International
Financial Reporting
Syllabus and study guide
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SUMMARY OF CONTENT
1. Aims
2. Objectives
3. Position of the course within the overall
portfolio of ACCA’s qualification framework
4. Approach to examining the syllabus
5. Syllabus content
6. Study guide
7. Summary of changes to Diploma in
International Financial Reporting
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This syllabus and study guide is designed to help
candidates to plan their studies and to provide
detailed information on what could be assessed in
any examination session.
1. AIMS
2. OBJECTIVES
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3. POSITION OF THE COURSE WITHIN THE
OVERALL PORTFOLIO OF ACCA’S
QUALIFICATION FRAMEWORK
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4. APPROACH TO EXAMINING THE other. It will be rare for the queries in question four
SYLLABUS to require a numerical answer.
The examination is a three-hour fifteen minute Some IFRS Standards are very detailed and
paper. ACCA has removed the restriction relating to complex. In the DipIFR exam candidates need to be
the 15 minutes reading and planning time, so that aware of the principles and key elements of these
while the time considered necessary to complete Standards. Candidates will also be expected to have
this exam remains at 3 hours, candidates may use an appreciation of the background and need for
the additional 15 minutes as they choose. ACCA international financial reporting standards and
encourages students to take time to read questions issues related to harmonisation of accounting in a
carefully and to plan answers but once the exam global context.
time has started, there are no additional restrictions
as to when candidates may start writing in their The overall pass mark for the Diploma in
answer books. International Financial Reporting is 50%.
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5. SYLLABUS CONTENT 4. Accounting policies, changes in accounting
estimates and errors
A INTERNATIONAL SOURCES OF AUTHORITY
5. Related party disclosures
1. The International Accounting Standards Board
(IASB) and the regulatory framework 6. Operating segments
11. The effects of changes in foreign currency The following topics are specifically excluded from
exchange rates the syllabus:
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• The international public sector perspective
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6. STUDY GUIDE Account for different types of consideration
(including variable consideration) and where a
A INTERNATIONAL SOURCES OF AUTHORITY significant financing component exists in the
contract.
1. The International Accounting Standards
Board (IASB) and the regulatory framework • Prepare financial statement extracts for
contracts with multiple performance
• Discuss the need for IFRS Standards and obligations, some of which are satisfied over
possible barriers to their development. time and some at a point in time.
• Explain the structure and constitution of the 2. Property, plant and equipment
IASB and the standard setting process.
• Define the initial cost of a non-current asset
• Understand and interpret the IASB’s (including a self-constructed asset) and apply
Conceptual Framework for Financial this to various examples of expenditure,
Reporting®. distinguishing between capital and revenue
items.
• Explain the progress towards international
harmonisation. • Identify pre-conditions for the capitalisation of
borrowing costs.
• Account for the first-time adoption of IFRS
Standards. • Describe, and be able to identify, subsequent
expenditures that should be capitalised,
B ELEMENTS OF FINANCIAL STATEMENTS including appropriate borrowing costs.
Explain and apply the criteria for the • Describe the criteria that need to be present
recognition of contract costs before non-current assets are classified as held
for sale, either individually or in a disposal
Specifically account for the following types of group.
transactions:
(i) Principal versus agent; • Apply the requirements of IFRS Standards for
(ii) Repurchase agreements; non-current assets and disposal.
(iii)Bill and hold arrangements groups that are held for sale.
(iv) Consignment agreements
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• Discuss the way in which the treatment of • Define the criteria for the initial recognition and
investment properties can differ from other measurement of intangible assets.
properties.
• Explain the principle of impairment tests in
• Apply the requirements of IFRS Standards to relation to purchased goodwill.
investment properties.
• Identify the circumstances in which a gain on a
3. Impairment of assets bargain purchase (negative goodwill) arises,
and its subsequent accounting treatment.
• Identify, circumstances which indicate that the
impairment of an asset may have occurred. • Describe and apply the requirements of
IFRS Standards to internally generated assets
• Describe what is meant by a cash-generating other than goodwill (e.g. research and
unit. development).
Define and calculate the recoverable amount of • Describe the method of accounting specified by
an asset and any associated impairment losses. the IASB for the exploration for and evaluation
of mineral resources.
• State the basis on which impairment losses
should be allocated, and allocate a given 6. Inventories
impairment loss to the assets of a cash-
generating unit. • Measure and value inventories.
• Distinguish between goodwill and other Describe the financial instrument disclosures
intangible assets. required in the notes to the financial
statements.
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8. Provisions, contingent assets and liabilities relating to deferred tax assets and liabilities in
accordance with the IFRS Standards.
• Explain why an accounting standard on
provisions is necessary – give examples of • Calculate and record deferred tax amounts in
previous abuses in this area. the financial statements.
• Define provisions, legal and constructive 11. The effects of changes in foreign currency
obligations, past events and the transfer of exchange rates
economic benefits.
• Distinguish between reporting and functional
• State when provisions may and may not be currencies.
made, and how they should be accounted for.
• Determine an entity’s functional currency.
• Explain how provisions should be measured.
Discuss the recording of transactions and
• Define contingent assets and liabilities – give translation of monetary/non-monetary items at
examples and describe their accounting the reporting date for individual entities in
treatment. accordance with IFRS Standards.
• Explain the recognition and measurement of • Identify and explain the treatment of
defined benefit schemes in the financial government grants, and the presentation and
statements of contributing employers. disclosure of information relating to agriculture.
• Account for defined benefit schemes in the • Report on the transformation of biological
financial statements of contributing employers. assets and agricultural produce at the point of
harvest and account for agriculture related
10. Tax in financial statements government grants.
• Account for current tax liabilities and assets in 13. Share-based payment
accordance IFRS Standards.
• Understand the term ‘share-based payment’.
• Describe the general principles of government
sales taxes (e.g. VAT or GST). • Discuss the key issue that measurement of the
transaction should be based on fair value.
• Outline the principles of accounting for deferred
tax. • Explain the difference between cash settled
share based payment transactions and equity
• Explain the effect of taxable and deductible settled share based payment transactions.
temporary differences on accounting and
taxable profits. • Identify the principles applied to measuring
both cash and equity settled share-based
• Identify and account for the requirements payment transactions.
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• Compute the amounts that need to be recorded • Discuss ‘fair presentation’ and the accounting
in the financial statements when an entity concepts/principles.
carries out a transaction where the payment is
share based. 2. Earnings per share
• Give examples of elements of cost that might • Explain why the trend of EPS may be a more
be included in the initial measurement of accurate indicator of performance than a
exploration and evaluation assets. company’s profit trend.
• Describe how exploration and evaluation assets • Define earnings for EPS purposes.
should be classified and reclassified.
• Calculate the EPS in the following
• Explain when and how exploration and circumstances:
evaluation assets should be tested for – where the number of issued ordinary shares
impairment. is constant throughout the year.
– where the has been an issue of ordinary
15. Fair value shares at fair value during the year.
– where there has been a bonus issue of
Explain the principle under which fair value is ordinary shares/stock split during the year,
measured according to IFRS Standards. – where there has been a rights issue of
ordinary shares during the year.
Identify an appropriate fair value measurement – where there has been more than one
for an asset or liability in a given set of change in the number of issued ordinary
circumstances. shares during the year
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Identify items requiring separate disclosure, 1. Preparation of group consolidated external
including their accounting treatment and reports
required disclosures.
• Explain the concept of a group and the purpose
• Recognise the circumstances where a change of preparing consolidated financial statements.
in accounting policy is justified.
• Explain and apply the definition of a
• Define prior period errors. subsidiary.
Account for the correction of errors and changes • Prepare a consolidated statement of financial
in accounting policies. position for a simple group (one or more
subsidiaries) dealing with pre and post-
5. Related party disclosures acquisition profits, non-controlling interests and
goodwill.
• Define and apply the definition of related
parties in accordance with IFRS Standards. • Explain the need for using coterminous year-
ends and uniform accounting polices when
• Describe the potential to mislead users when preparing consolidated financial statements
related party relationships and transactions are and describe how it is achieved in practice.
not disclosed appropriately
• Prepare a consolidated statement of profit or
• Explain the disclosure requirements for related loss, statement of profit or loss and other
party transactions. comprehensive income and statement of
changes in equity for a simple group (one or
6. Operating segments more subsidiaries), including an example
where an acquisition or disposal of an entire
• Discuss the usefulness and problems interest occurs during the year and there is a
associated with the provision of segment non-controlling interest.
information.
2. Business combinations – intra-group
• Define an operating segment. adjustments
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Compute the fair value of the consideration
given including the following elements:
- Cash
- Share exchanges
- Deferred consideration
- Contingent consideration.
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7. SUMMARY OF CHANGES TO DIPLOMA IN INTERNATIONAL FINANCIAL REPORTING
ACCA periodically reviews its qualification syllabuses so that they meet the needs of stakeholders such as
employers, students, regulatory and advisory bodies and learning providers. There were no significant changes to
the syllabus in the current period but minor changes are identified in table 1.
The main areas to be added or deleted or changed are shown in Table 1 below:
Structure The exam will comprise four Clarification on the change from 1 x 40
of Exam compulsory questions, each worth mark question and 3 x 20 marks
25 marks. Question 1 will continue question to 4 x 25 mark questions.
to require the preparation of one or
more consolidated financial
statements as covered by the
syllabus.
Excluded Preparation of interim financial For clarification as IAS 34 Interim
topics statements Financial Reporting is not an
examinable documents
B2 Discuss the way in which the Clarification by inserting ‘can’ to ensure
treatment of investment properties both cost and fair value models are
can differ from other properties. considered
C1 Presentation of the statement of Added statement of changes in equity
financial position, the statement of for clarification
profit or loss and other
comprehensive income and the
statement of changes in equity
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D1 Prepare a consolidated statement of Added ‘or a disposal’ for clarification
profit or loss, statement of profit or that a disposal can include non-
loss and other comprehensive controlling interest
income and statement of changes in
equity for a simple group (one or
more subsidiaries), including an
example where an acquisition or
disposal of an entire interest occurs
during the year and there is a non-
controlling interest.
D2 Report the effects of intra-group For clarification that unsettled intra-
trading and other transactions group balances are examinable
including:
unsettled intra-group balances at the
year-end
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