ACCA FR study guide
ACCA FR · Work through your exam, one topic at a time.
ACCA Financial Reporting (FR) is a professional-level examination within the ACCA Qualification, aimed at candidates who already understand the basics of double-entry bookkeeping and are moving on to how financial statements are prepared, presented and interpreted under international standards. It suits learners working towards the ACCA Qualification, finance professionals in reporting roles, and graduates who want demonstrable competence in preparing and analysing financial information. The ACCA FR study guide has 5 sections and about 1,739 words.
01The Conceptual and Regulatory Framework for Financial Reporting
The IASB Conceptual Framework is not a standard: where it conflicts with an IFRS, the standard prevails. Its objective is to provide financial information useful to existing and potential investors, lenders and other creditors in making decisions about providing resources.
360 words, about 2 min02Accounting for Transactions in Financial Statements
IAS 2: inventories are held at the lower of cost and net realisable value, tested item by item; cost includes purchase price, conversion costs and costs of bringing the item to its present location and condition, but excludes abnormal waste, storage (unless necessary in the process) and selling costs. IAS 16: property, plant and equipment is capitalised at cost, split into significant components, and depreciated over useful life to residual value; under the revaluation model a surplus goes to OCI and a deficit to profit or loss, except that each reverses the other first.
364 words, about 2 min03Analysing and Interpreting Financial Statements
Candidates must be fluent in five groups: profitability (gross margin, operating margin, return on capital employed, return on equity), liquidity (current ratio, quick ratio, cash cycle), efficiency (inventory days, receivable days, payable days, asset turnover), gearing (debt/equity, interest cover) and investor (EPS per IAS 33, price/earnings, dividend cover, dividend yield). Calculation is the easy mark; interpretation is where the marks are.
325 words, about 2 min04Preparation of Financial Statements
Be able to build a statement of profit or loss and other comprehensive income, a statement of financial position, a statement of changes in equity and a statement of cash flows under IAS 7 (indirect method operating section, with interest and tax treated consistently). Know IAS 10: adjusting events provide evidence of conditions existing at the year end and change the figures; non-adjusting events are disclosed only.
367 words, about 2 min05Employability and Technology Skills
This domain tests whether you can work effectively and ethically with data and systems. Expect questions on spreadsheet design (keep inputs, calculations and outputs in separate areas; never hard-code a number inside a formula; build in error checks and change control), big data analytics (volume, velocity, variety; descriptive, diagnostic, predictive and prescriptive analysis), automation and robotic process automation, cloud accounting, artificial intelligence and machine learning, and cyber security and data protection.
323 words, about 2 min