General Objective

The purpose of this paper is to enable the candidate to account for more complex transactions, prepare as well as analyze financial statements in the private and public sectors.

Learning outcomes

A candidate who passes this paper should be able to:

(a) Account for various assets and liabilities

(b) Prepare financial statements including published financial statements for various types of organizations

(c) Account for specialized transactions

(d) Prepare group financial statements

(e) Analyze and interpret financial statements

(f) Apply International Financial Reporting Standards (IFRSs) and International Public Sector Accounting Standards (IPSASs) in preparing non-complex financial statements.



1.Accounting for Assets and Liabilities

(Assets and liabilities as covered in Financial Accounting (Foundation Level) are also relevant here)

1.1 Investment Property

1.2 Assets used in Exploring for and Evaluation of mineral resources

1.3 Non-current assets held for sale

1.4 Financial Assets and Financial Liabilities (Recognition, Classification, Initial measurement, subsequent measurement, reclassifications and de-recognition)

1.5 Leases (Exclude Sale and Leaseback and dealers in leasing assets)

1.6 Current and Deferred tax

1.7 Government grants

1.8 Provisions, contingent liabilities and assets


  1. Accounting for Specialized Transactions

2.1 Revenue recognition (Basic application of revenue recognition principles to Hire Purchase, Consignment sales, construction contracts and joint arrangements)

2.2 Effects of changes in exchange rates

(Only foreign currency denominated transactions)

2.3 Borrowing Costs


3.Preparation of Financial Statements for different entities/Transactions

3.1 Conversion of a partnership into a company

3.2 Professional firms (Accountants, Lawyers, doctors and engineers)

3.2 Agricultural activities and farming

3.3 Pension plans

3.4 Cooperative Societies


  1. Preparation of Published Financial Statements

4.1 Presentation of Financial Statements (Statement of Profit or Loss, other comprehensive incomes, Statement of Financial Position and Statement of cash flows)

4.2 Accounting Policies, Changes in Accounting Estimates and Errors

4.3 Events after the Reporting Period

4.4 Discontinued Operations


  1. Accounting and Financial Statements for Interests in Other Entities

5.1 Subsidiaries (Basic Consolidated Financial Statements with one subsidiary – excluding disposals and statement of cash flows)

5.2 Associates and Joint ventures

5.3 Accounting treatment of investments in subsidiaries, associates and jointly controlled entities in the financial statement of the investor (Separate financial statements)

5.3 Branches (Only autonomous and local branches)


  1. Public Sector Accounting Standards

6.1 Presentation of Financial Statements

6.2 Accounting Policies, Changes in Accounting Estimates and Errors

6.3 Effects of Changes in Foreign Exchange Rates

6.4 Revenue from exchange transactions and revenue from non exchange transactions

6.5 Property, plant and equipment,  investment property and intangible assets

6.6 Provisions, contingent liabilities and contingent assets

6.7 Presentation of budget information in Financial Statements



  1. Analyzing Financial Statements

7.1 Analyzing financial statements using ratios covered in Financial Accounting

7.2 Analyzing Financial Statements using common size approach for the statement of profit or loss and statement of financial position



  1. John McKeith and Bill Collins 2013, Financial Accounting and Reporting, McGraw-Hill Education
  2. Barry Elliott and Jamie Elliott 2008, Financial Accounting and Reporting, 12 Ed, Prentice Hall
  3. Derry Cotter, Advanced Financial Reporting, A Complete Guide to IFRS, Financial Times/ Prentice Hall



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