CIMA F2 cheat sheet
CIMA F2 · Keep the key ideas within reach.
Advanced Financial Reporting
Consolidation: parent controls investee when it has power over relevant activities, exposure to variable returns, and ability to use power to affect returns (IFRS 10). Control is reassessed if facts change.
Goodwill at acquisition = consideration transferred + non-controlling interest + previously held interest − fair value of identifiable net assets. NCI measured at fair value (full goodwill) or proportionate share (partial goodwill).
Intra-group balances and transactions are eliminated in full. Unrealised profit on inventory (seller's tax rate applied) is eliminated: Dr revenue/cost of sales, Cr inventory; adjust NCI share if subsidiary is seller.
Associate (significant influence, usually 20–50% voting) is equity accounted: cost + share of post-acquisition profit/OCI − impairment − dividends received. Joint ventures are also equity accounted (IFRS 11).
Foreign operations: translate assets/liabilities at closing rate, income/expenses at transaction-date rate (average permitted), share capital at historical rate. Exchange differences go to OCI and are reclassified to P&L on disposal.
Financial instruments (IFRS 9): classification depends on business model and contractual cash flow characteristics. FVTPL is default; amortised cost requires hold-to-collect and SPPI. Expected credit losses apply to amortised cost and FVOCI debt.
Revenue (IFRS 15) five steps: identify contract, identify performance obligations, determine transaction price (variable consideration constrained), allocate by standalone selling prices, recognise when control transfers (over time or at a point).
Leases (IFRS 16): lessee recognises right-of-use asset and lease liability at present value of lease payments. Lessor classifies as finance lease if substantially all risks and rewards transfer; otherwise operating lease.
Deferred tax: temporary differences between carrying amount and tax base. Recognise deferred tax liabilities on taxable temporary differences and assets on deductible differences to the extent probable. Measure at expected tax rates.