Financial Accounting and Reporting - the SCF referential
This domain tests the Système Comptable Financier (SCF), the Algerian referential introduced by Loi 07-11 of 25 November 2007 and applicable from 1 January 2010 in place of the Plan Comptable National. Questions concentrate on recognition and measurement, on the composition of the annual accounts, and on the points where the SCF converges with IFRS and where it deliberately diverges.
Structure of the referential
- Classes 1 to 7 carry the balance-sheet and income-statement accounts: 1 capitaux propres et emprunts, 2 actif immobilisé, 3 stocks, 4 tiers, 5 trésorerie, 6 charges, 7 produits. Class 8 records engagements donnés and droits constatés held off balance sheet.
- The annual accounts are a set, not one document: bilan, compte de résultat, tableau des flux de trésorerie, tableau de variation des capitaux propres (TVCP) and annexe. Candidates routinely present only the balance sheet and the profit-and-loss account and lose the presentation marks.
- The SCF is principle-based: substance over form, going concern, accruals (rattachement des charges et produits à l'exercice), consistency and prudence.
Measurement rules that carry marks
- Historical cost is the default. Fair value applies only to defined categories (certain financial instruments, permitted revaluation options).
- Tangible assets with components of different useful lives are split by component; depreciation begins when the asset is ready for use, and residual value is excluded from the depreciable base.
- Frais d'établissement and charges à répartir sur plusieurs exercices are expensed, not carried as assets.
- An impairment loss is recognised when the recoverable amount falls below the carrying amount, and may be reversed under conditions for non-financial assets.
Worked example
A production line is acquired on 1 July N for 10,000,000 DA, with no recoverable VAT. Useful life is 5 years, residual value 1,000,000 DA, straight-line depreciation, year-end 31 December. Depreciable base = 10,000,000 − 1,000,000 = 9,000,000 DA. Annual charge = 9,000,000 ÷ 5 = 1,800,000 DA. Year N charge = 1,800,000 × 6/12 = 900,000 DA. Closing carrying amount = 10,000,000 − 900,000 = 9,100,000 DA. Three separate steps - base after residual value, proration for time in service, carrying amount - and each is commonly skipped.
Traps
- Depreciating the residual value.
- Capitalising VAT that is recoverable.
- Treating a provision for a future operating loss as a liability.
- Confusing amortissement (allocation of cost over time) with dépréciation (impairment).
- Omitting the TVCP and the annexe from the statement set, or omitting the comparatives.