Accountancy Tuition Centre (International Holdings) Ltd 2008 (i)

ACCA Professional Diploma in

International Financial Reporting










Accountancy Tuition Centre (International Holdings) Ltd 2008 (ii)



























Typesetting by Jana Korcakova
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Accountancy Tuition Centre (International Holdings) Ltd 2008 (iii)




ACCA Professional Diploma in
International Financial Reporting







Technical Editor
Phil Bradbury




Accountancy Tuition Centre (International Holdings) Limited
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Teddington TW11 8ST
Telephone: +44 (0)208 943 1596
E-mail: diploma@atc-global.com
Internet: http://www.atc-global.com
Accountancy Tuition Centre (International Holdings) Ltd 2008 (iv)
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This training material has been published and prepared by Accountancy Tuition Centre (International Holdings)
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Editorial material Copyright Accountancy Tuition Centre (International Holdings) Limited, 2008. All other
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ISBN for complete set of 3 volumes: 1 903632 27 7. 4
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ISBN for this volume: 1 903632 28 5. 4
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IASCF Copyright and Acknowledgement

International Financial Reporting Standards, International Accounting Standards, Interpretations, Exposure
Drafts, and other IASB publications are copyright of the International Accounting Standards Committee
Foundation. The approved text of International Financial Reporting Standards, International Accounting
Standards and Interpretations is that published by the IASB in the English language. Copies may be obtained
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All rights reserved. No part of IASBs publications may be translated, reprinted or reproduced or utilised in any
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invented, including photocopying and recording, or in any information storage and retrieval system, without
prior permission in writing from the IASCF.

The various extracts of International Financial Reporting Standards or International Accounting Standards in
this training material, are reproduced by the publisher, ATC (International Holdings) Ltd with the permission of
IASCF.

IAS, IASB, IASC, IASCF, IASs, IFRIC, IFRS, International Accounting Standards,
International Financial Reporting Standards and SIC are Trade Marks of the IASCF.

IASBs 2008 Bound Volume International Financial Reporting Standards contains the full text of all
International Financial Reporting Standards including International Accounting Standards and Interpretations as
at 1 January 2008 (ISBN 978-1-905590-54-4), price 60 each.


SYLLABUS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (v)
Introduction
This Study System is the Association of Chartered Certified Accountants Approved Study
material specifically written for the Professional Diploma in International Financial Reporting.
Together with the Question Bank, it provides comprehensive coverage of the syllabus and is
designed to be used both as a reference text and interactively with the ATC Learning System,
providing you with the knowledge, skill and confidence to succeed in your Diploma studies.
Syllabus
Aim
To provide qualified accountants or graduates, possessing relevant country specific
qualifications or work experience with an up to date and relevant conversion course,
providing a practical and detailed knowledge of the key international financial reporting
standards and how they are interpreted and applied.
Objectives
On completion of the Diploma candidates should be able to:
Understand and explain the structure of the international conceptual framework of accounting.
Apply relevant financial reporting standards to key elements of financial reports.
Identify and apply disclosure requirements for companies relating to the presentation of
financial reports and notes.
Prepare financial statements of single entities and account for their key elements complying
with specified International Financial Reporting Standards and other related pronouncements.
Prepare group financial statements (excluding group cash flow statements) including
subsidiaries, associates, and joint ventures.
Position within the portfolio of ACCA's qualification framework
Dip IFR builds on the technical and/or practical knowledge acquired from recognised country specific
accountancy qualifications or relevant work experience. The course introduces the candidate to the
wider international framework of accounting and the system of standard setting. This conversion course
concentrates on the application of conceptual and technical financial accounting knowledge that
candidates have already obtained to the specific requirements of financial reporting under international
professional regulation and standards.
Dip IFR also provides essential international financial reporting knowledge and principles that will
prepare candidates for the increasingly global market place and keep them abreast of international
developments and how they might apply to the companies and businesses.
The prerequisite knowledge for Dip IFR can come from:
membership of a recognised professional accountancy body; or
possessing a relevant degree (giving exemptions from F1 F4 of ACCAs
Professional Scheme) and two years accounting experience; or
having three years full-time relevant accounting experience, supported by an
employers covering letter.
SYLLABUS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (vi)
Syllabus content
1 International sources of authority
a The structure of the International Accounting Standards Board (IASB)
b The standard setting process
c The role of the International Financial Reporting Interpretations
Committee (IFRIC)
d Progress towards international harmonisation
e The IASBs Framework for the Preparation and Presentation of
Financial Statements
f The first-time adoption of international financial reporting standards.
2 Elements of financial statements
a Property plant and equipment
b Intangible assets
c Goodwill
d Current assets including inventories
e Construction contracts
f Liabilities
g Financial instruments
h Provisions and contingencies
i. Employment and post-employment benefits
j Current and deferred tax
k Biological assets and agricultural produce
l Share-based payment
m Exploration and evaluation expenditures.
3 Presentation and additional disclosures
a Events after the reporting period
b Earnings per share
c Related party disclosures
d Interim financial reporting
e Effects of changes in foreign exchange rates
f Operating segments.
4 Preparation of external financial reports for single entities
a Statement of comprehensive income and discontinued operations
b Statement of cash flows
c Statement of changes in equity.
SYLLABUS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (vii)
5 Preparation of external financial reports for combined entities
and joint ventures
a Definitions of subsidiaries, investments in associates and joint ventures
b Preparation of consolidated statement of financial position and
statement of comprehensive income
c Equity accounting
d Proportionate consolidation and joint ventures.
Excluded topics
The following topics are specifically excluded from the syllabus:
Partnership and branch financial statements
Complex group structures including sub-subsidiaries or mixed groups and foreign
subsidiaries
Piece-meal acquisitions, disposal of subsidiaries and group reconstructions
Financial statements of banks and similar financial institutions
Accounting and reporting by retirement benefit plans
Information reflecting the effects of changing prices and financial reporting
in hyperinflationary economies
Multi-employer pension schemes
Share-based payment transactions with cash alternatives
Accounting for insurance entities
Group cash flows
Schemes of reorganisation/reconstruction
Company/share valuation
International Financial Reporting Standard Exposure Drafts and Discussion Papers
The international public sector perspective.
Key areas of the syllabus
The key topic area headings are as follows:
International sources of authority
Elements of financial statements
Presentation of accounts and additional disclosures
Preparation of external financial reports of single entities
Preparation of external reports for combined entities and joint ventures.
SYLLABUS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (viii)
Approach to examining the syllabus
The examination is a three-hour paper in two sections. It will contain a mix of computational and
discursive elements. Some questions will adopt a scenario/case study approach.
Section A comprises a compulsory question requiring the preparation of consolidated group financial
statements, and may include a related discussion element. Section B comprises four questions from
which the candidate is required to answer three. Computations will be designed to test an
understanding of principles. At least one of the optional questions in Section B will be a
conceptual/discursive question that may include illustrative numerical calculations.
An individual question may often involve elements that relate to different areas of the syllabus. For
example a question on the preparation of financial statements for public issue could include elements
relating to several accounting standards. In scenario questions candidates may be expected to
comment on managements chosen accounting treatment and determine a more appropriate one,
based on circumstances described in the question.
Some International Financial Reporting Standards are very detailed and complex. In the Dip IFR
exam candidates need to be aware of the principles and key elements of these Standards. Candidates
will also be expected to have an appreciation of the background and need for international
accounting standards and issues related to harmonisation of accounting in a global context.
Examination structure Number of marks
Section A: 1 compulsory question 25
Section B: Choice of 3 from 4 questions (25 marks each) 75

_____
100

____

For all three hour examination papers, ACCA has introduced 15 minutes reading and planning
time. This additional time is allowed at the beginning of each three-hour examination to allow
candidates to read the questions and to begin planning their answers before they start writing in
their answer books. This time should be used to ensure that all the information and exam
requirements are properly read and understood.
During reading and planning time candidates may only annotate their question paper. They may
not write anything in their answer booklets until told to do so by the invigilator.
Additional information
Candidates need to be aware that questions involving knowledge of new examinable regulations will
not be set until at least six months after the last day of the month in which the regulation was issued.
SYLLABUS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (ix)
Examinable documents
Session
Conceptual framework reference
Framework for the Preparation and Presentation of Financial Statements 2
International Financial Reporting Standards
IAS 1 Presentation of Financial Statements 3
IAS 2 Inventories 7
IAS 7 Statement of Cash Flows 30
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 4
IAS 10 Events After the Reporting Period 33
IAS 11 Construction Contracts 6
IAS 12 Income Taxes 20
IAS 16 Property, Plant and Equipment 8
IAS 17 Leases 11
IAS 18 Revenue 5
IAS 19 Employee Benefits 18
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance 9
IAS 21 The Effects of Changes in Foreign Exchange Rates 28
IAS 23 Borrowing Costs 10
IAS 24 Related Party Disclosures 34
IAS 27 Consolidated and Separate Financial Statements 22
IAS 28 Investments in Associates 26
IAS 31 Interests In Joint Ventures 27
IAS 32 Financial Instruments: Presentation 21
IAS 33 Earnings Per Share 29
IAS 34 Interim Financial Reporting 35
IAS 36 Impairment of Assets 15
IAS 37 Provisions, Contingent Liabilities and Contingent Assets 17
IAS 38 Intangible Assets 12
IAS 39 Financial Instruments: Recognition and Measurement 21
IAS 40 Investment Property 13
IAS 41 Agriculture 14
SYLLABUS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (x)
Session
International Financial Reporting Standards (continued) reference
IFRS 1 First-Time Adoption of International Financial Reporting Standards 36
IFRS 2 Share-based Payment 19
IFRS 3 Business Combinations 22 25
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 32
IFRS 6 Exploration for and Evaluation of Mineral Resources 16
IFRS 7 Financial Instruments: Disclosure 21
IFRS 8 Operating Segments 31
SIC Interpretations
SIC-10: Government Assistance No Specific Relation to Operating Activities 9
SIC-12: Consolidation Special Purpose Entities 22
SIC-15: Operating Leases Incentives 11
SIC-31: Revenue Barter Transactions Involving Advertising Services 5
SIC-32: Intangible Assets Web Site Costs 12
IFRIC Interpretations
IFRIC-1: Changes in Existing Decommissioning, Restoration and Similar Liabilities 17
IFRIC-5: Rights to Interests Arising from Decommissioning, Restoration and Environmental
Rehabilitation Funds 17
IFRIC-10: Interim Financial Reporting and Impairment 35
IFRIC-11: IFRS 2 Group and Treasury Share Transactions 19
IFRIC-12: Service Concession Arrangements 5
IFRIC-13: Customer Loyalty Programmes 5

Examinable documents are also listed in the Exam Notes section of student accountant
available on http://www.accaglobal.com/students/dipifr/examinabledocs.pdf.



CONTENTS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (xi)
Session Page
Introduction
1 Introduction to International Financial Reporting Standards 0101
2 Framework for the Preparation and Presentation of Financial Statements 0201
3 IAS 1 Presentation of Financial Statements 0301
4 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 0401
Income
5 IAS 18 Revenue 0501
6 IAS 11 Construction Contracts 0601
Assets
7 IAS 2 Inventories 0701
8 IAS 16 Property, Plant and Equipment 0801
9 IAS 20 Accounting for Government Grants and Disclosure of
Government Assistance 0901
10 IAS 23 Borrowing Costs 1001
11 IAS 17 Leases 1101
12 IAS 38 Intangible Assets 1201
13 IAS 40 Investment Properties 1301
14 IAS 41 Agriculture 1401
15 IAS 36 Impairment of Assets 1501
16 IFRS 6 Exploration for and Evaluation of Mineral Resources 1601
CONTENTS
Accountancy Tuition Centre (International Holdings) Ltd 2008 (xii)
Session Page
Liabilities
17 IAS 37 Provisions, Contingent Liabilities and Contingent Assets 1701
18 IAS 19 Employee Benefits 1801
19 IFRS 2 Share-based Payments 1901
20 IAS 12 Income Taxes 2001
21 Financial Instruments 2101
Group accounts
22 Regulatory framework 2201
23 Consolidated statement of financial position 2301
24 Further adjustments 2401
25 Consolidated statement of comprehensive income 2501
26 IAS 28 Investments in Associates 2601
27 IAS 31 Interests in Joint Ventures 2701
28 IAS 21 The Effects of Changes in Foreign Exchange Rates 2801
Disclosure and analysis
29 IAS 33 Earnings Per Share 2901
30 IAS 7 Statement of Cash Flows 3001
31 IFRS 8 Operating Segments 3101
32 IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 3201
33 IAS 10 Events After the Reporting Period 3301
34 IAS 24 Related Party Disclosure 3401
35 IAS 34 Interim Financial Reporting 3501
36 IFRS 1 First-time Adoption of International Financial Reporting Standards 3601
Index 3701