Financial Reporting & Tax Accounting Fundamentals

1. Introduction

2. Introduction to basic accounting concepts

2.1 Explain the accounting equation

2.2 Apply knowledge of double-entry book keeping to prepare journals

2.3 Explain the role of the Trial Balance

2.4 Explain the types of Trial Balance errors

2.5 Describe the basic principles which govern financial reporting

2.6 Explain the concepts for financial reporting

3. Introduction to basic accounting practice

3.1 Define and explain the role of the books of first entry

3.2 Define and explain the role of the ledgers

4. Sources of accounting rules and guidance

4.1 Describe statute and the stock exchange as a source of rules and guidance

4.2 Describe how GAAP (IFRS & FRS) are a source of rules and guidance

4.3 Examine how these rules apply to a set of financial reports

5. Accounting for specific items – 1

5.1 Capital v revenue expenditure

5.2 Accounting for VAT and payroll

5.3 Write off bad debts and creation of allowance for receivables

5.4 Prepayment and accruals

5.5 Inventories

5.6 Property, plant and equipment

5.7 Leases

6. Accounting for various entities

6.1 Describe the different types of entities that prepare accounts

6.2 Sole trader

6.3 Partnership

6.4 Company

6.5 Transfer (Sale) of partnership to a limited company

6.6 Branch

Summary

7. Statement of cash flows and notes and disclosures included in a set of financial statements

7.1 Explain the requirement to prepare a statement of cash flows

7.2 Prepare a basic statement of cash flows for a company

7.3 Describe the main notes and disclosures that form part of financial statements

Summary

8. Accounting for specific items – 2

8.1 Income tax and corporation tax

8.2 Impairments

8.3 Investments

8.4 Intangible assets

8.5 Research and development

8.6 Retirement benefits/pensions

8.7 Equity and financial liabilities

8.8 Reserves

8.9 Describe the concept of functional currency and the circumstance in which non-euro functional currency is appropriate

8.10 Outline what foreign exchange rate is used to translate different types of accounts for year end balances

9. Accounting for and reporting tax charge and provisions; tax disclosures relevant for IFRS

9.1 Outline the requirements for accounting for current tax in the statement of profit or loss and other comprehensive income and statement of financial position

9.2 Outline the requirements of International Financial Reporting Interpretations Committee (IFRIC) 23 Uncertainty over Income Tax Treatments

9.3 Explain the purpose of a tax account and the main differences between the account balance and the tax payment

9.4 Calculate the current tax expense (or income) for the statement of profit or loss and other comprehensive income

9.5 Calculate the impact on the tax account of payments of corporation tax and of tax withheld on income and expenses

9.6 Calculate the accounting adjustments required for adjustment of prior year tax liabilities on submission of tax returns and on settlement of Revenue audits

9.7 Calculate the current tax provision for the statement of financial position

9.8 Awareness of deferred tax

9.9 Outline the tax disclosures that are relevant to the statement of profit or loss and other comprehensive income

9.10 Outline the tax disclosures that are relevant to the statement of financial position

9.11 Outline the tax disclosures that are relevant to the statement of cash flows

9.12 Explain the purpose of an effective tax rate reconciliation

9.13 Set out the requirements of the accounting standards (under FRS and IFRS) relevant to the reporting of current tax

9.14 Reconcile the current expected tax charge with the current tax expense or income (IFRS methodology – IAS 12)

10. Interpreting financial reports

10.1 Outline the circumstances when an entity or company needs to be valued

10.2 Apply the three basic methods of valuing an entity

10.3 Explain what is meant by EBITDA

10.4 Explain the purpose of carrying out ratio analysis and analyse a set of financial reports using ratio analysis

10.5 Calculate and interpret commonly used ratios

11. The implications of financing decisions

11.1 Outline the main sources of finance available to entities

11.2 Compare the financial implications of the different sources of finance

11.3 Outline the financial implications of investment decisions

12. Distributable reserves of a company

12.1 Identify the different forms of distribution and apply the legal rules that determine the distributable reserves of a private company

12.2 Describe the accounting treatment of different types of distribution

12.3 Judge if the distribution restrictions for public limited companies apply

12.4 Explain how preference share distributions work

12.5 Explain the financial implications of a company’s dividend policy

12.6 Describe the restrictions on the distributions of profits and assets

Glossary