Financial Reporting and Analysis
What is really being tested
Advanced reporting questions move from a transaction to the primary statements, then ask you to interpret. You must command: IAS 1 presentation and the going-concern/accrual/materiality principles; IFRS 15 revenue; IFRS 16 leases; IFRS 9 classification and expected credit losses; IAS 36 impairment; IFRS 10 control and consolidation; IAS 12 deferred tax; IAS 33 earnings per share; and ratio/DuPont analysis.
Concepts to hold firmly
Revenue: the five-step model - identify the contract, identify distinct performance obligations, determine the transaction price, allocate on relative standalone selling prices, recognise over time or at a point. Leases: a lease liability at the present value of unavoidable payments, with a right-of-use asset; recognise the remeasurement triggers. Impairment: goodwill is allocated to cash-generating units that benefit from synergies; test annually; write off goodwill first, then allocate the remainder pro rata to other assets, never below recoverable amount reversal ceilings. Groups: control is power plus exposure to variable returns plus the ability to use power to affect returns.
Traps that appear in questions
Redeemable preference shares and puttable instruments are liabilities under IAS 32, not equity. A dividend declared after the reporting date is non-adjusting. Deferred tax on a revaluation surplus goes to OCI, not profit. Bonus issues and share splits restate prior-year EPS; a rights issue uses the adjustment factor. Contract assets versus receivables is a timing distinction, not a revenue one. EBITDA is not a cash flow.
Rule of thumb
A discount or variable consideration is allocated across all performance obligations on relative standalone selling prices - not dumped onto the residual obligation. Allocate first, recognise second.