Financial Accounting and Reporting
The Financial Accounting and Reporting domain tests how well you apply Cambodian Financial Reporting Standards (CIFRS), which the National Accounting Council (NAC) issues based on IFRS. Public interest entities (PIEs) - listed companies, banks, insurers and similar - use full CIFRS; other enterprises generally use CIFRS for SMEs unless they elect or are required otherwise. The exam emphasises recognition, measurement, presentation and disclosure, plus first-time adoption and consolidation.
Core rules
- CIFRS 15 revenue: apply the five-step model - identify the contract, identify performance obligations, determine the transaction price, allocate it, and recognise revenue when control transfers.
- Variable consideration is included only to the extent it is highly probable that a significant reversal will not occur.
- CIFRS 16 leases: a lessee recognises a right-of-use asset and a lease liability at the present value of lease payments, unless the short-term or low-value exemption applies.
- CIFRS 10 control: power over the investee, exposure to variable returns, and ability to use power to affect those returns.
- CIFRS 1 first-time adoption: apply retrospectively, with mandatory exceptions and optional exemptions such as deemed cost.
Worked example
A garment exporter sells goods FOB for $100,000. A 2% rebate applies if annual purchases exceed a threshold; the entity estimates a 60% chance. Expected rebate = $100,000 × 2% × 60% = $1,200. Transaction price = $98,800. Revenue is recognised when control passes at shipment, not when the rebate is settled.
Traps
Recognising revenue before control transfers; ignoring the constraint on variable consideration; measuring the lease liability undiscounted; consolidating an investee without assessing all three control elements; and forgetting deferred tax on consolidation adjustments.