Following our continued effort to provide quality study and revision materials at an affordable price for the private students who study on their own, full time and part time students, we partnered with other team of professionals to make this possible.

This Revision kit (Questions and Answers) contains kasneb past examination past papers and their suggested answers as provided by a team of lecturers who are experts in their area of training. The book is intended to help the learner do enough practice on how to handle exam questions and this makes it easy to pass kasneb exams.



Complete copy of CPA FINANCIAL REPORTING AND ANALYSIS Revision Kit is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APP) and in HARD copy 

Phone: 0728 776 317






This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to account for more complex financial transactions and to prepare as well as analyse financial statements in the private and public sectors.



A candidate who passes this paper should be able to:

  • Account for various assets and liabilities
  • Prepare financial statements including published financial statements for various types of organisations
  • Account for specialised transactions
  • Prepare group financial statements
  • Analyse and interpret financial statements
  • Apply International Financial Reporting Standards (IFRSs) and International Public Sector Accounting Standards (IPSASs) in preparing non-complex financial



  1. Accounting for Assets and Liabilities [Assets and liabilities as covered in Financial Accounting (Foundation Level) are also relevant here]
    • Investment Property
    • Assets used in exploring for and evaluation of mineral resources
    • Non-current assets held for sale
    • Financial Assets and Financial Liabilities (Recognition, Classification, Initial measurement, subsequent measurement, reclassifications and de-recognition)
    • Leases (Exclude Sale and Leaseback and dealers in leasing assets)
    • Current and Deferred tax
    • Government grants
    • Provisions, contingent liabilities and assets


  1. Accounting for Specialized Transactions
    • Revenue recognition (Basic application of revenue recognition principles to Hire Purchase, Consignment sales, construction contracts and joint arrangements)
    • Effects of changes in exchange rates (Only foreign currency denominated transactions)
    • Borrowing Costs


  1. Preparation of Financial Statements for different entities/Transactions
    • Conversion of a partnership into a company
    • Professional firms (Accountants, Lawyers, doctors, engineers)
    • Agricultural activities and farming
    • Pension plans
    • Cooperative Societies


  1. Preparation of Published Financial Statements
    • Presentation of Financial Statements (Statement of Profit or Loss, other comprehensive incomes, Statement of Financial Position and Statement of cash flows)
    • Accounting Policies, Changes in Accounting Estimates and Errors
    • Events after the Reporting Period
    • Discontinued Operations


  1. Accounting and Financial Statements for Interests in Other Entities
    • Subsidiaries (Basic Consolidated Financial Statements with one subsidiary – excluding disposals and statement of cash flows)
    • Associates and Joint ventures
    • Accounting treatment of investments in subsidiaries, associates and jointly controlled entities in the financial statement of the investor (Separate financial statements)
    • Branches (Only autonomous and local branches)


  1. Public Sector Accounting Standards
    • Presentation of Financial Statements
    • Accounting Policies, Changes in Accounting Estimates and Errors
    • Effects of Changes in Foreign Exchange Rates
    • Revenue from  exchange   transactions  and   revenue   from   non-exchange transactions
    • Property, plant and equipment, investment property and intangible assets
    • Provisions, contingent liabilities and contingent assets
    • Presentation of budget information in Financial Statements


  1. Analysing Financial Statements
    • Analysing financial statements using ratios covered in Financial Accounting
    • Analysing Financial Statements using common size approach for the statement of profit or loss and statement of financial position







April 2023 Question One D

With reference to International Financial Reporting Standard (IFRS) – 5, Non-Current Assets Held for Sale and Discontinued Operations, describe the conditions that must be met for an asset to be classified as held for sale.      (8 marks)



Conditions to be met for an asset to be classified as held for sale

  1. The management is committed to plan to sell the asset.
  2. The asset is available for immediate use.
  3. The active programme to locate a potential buyer has been initiated.
  4. The sale is highly probable within 1 2 months from the date of the classification as held for sale



April 2023 Question Five

(a) In the context of International Accounting Standard (IAS) 12, Income Taxes:

(i)  Explain the difference between “taxable temporary differences” and “deductible temporary differences”.         (2 marks)

(ii) Suggest how the tax base for “assets”, “revenue received in advance” and “other liabilities” can be determined.          (6 marks)

(iii) A deferred tax liability is generally recognised for all taxable differences. There are however exceptions to this rule.

Summarise TWO exceptions to the above rule.   (4 marks)


(b) BXL Manufacturers Ltd., a small firm engaged in the production of fertilizer, purchased an item of equipment for Sh.12 million on 1 July 2018. The company provides depreciation on equipment on a straight-line basis at the rate of 25% per annum. During the four years from 1 July 2018 to 30 June 2022, the profit after tax and allowed wear and tear charges for tax purposes were as follows:

Corporation tax for the period of four years remained at the rate of 30%.



Compute for each of the years ended 30 June 2019, 2020, 2021 and 2022:

(i)  Taxable profit.      (4 marks)

(ii) Deferred tax.      (4 marks)


a) i) Differences between taxable and deductible temporary differences

Taxable temporary differences are T.D which gives rise to Deferred tax liability whole deductible temporary differences are T.D which gives to Deferred tax asset

ii) Determination of tax bases for:

  • Assets: Tax base for an asset is the amount allowable for tax purposes in the future i.e. amount deductible against taxable economic benefits
  • Revenue received in advance: The tax base of the recognized liability is its carrying amount.
  • Other liabilities: The tax base of a liability is its carrying amount; less any amount that will be deductible for tax purpose in respect of that liability in future period.


iii) Exemptions to the requirements to recognize a deferred tax liability, as follows

  • Liability arising from initial recognition of goodwill.
  • liability arising from temporary differences associated with investment in subsidiaries, branches and associate
  • Liabilities arising from initial recognition of an asset/liability other than in business combination.


b (i) Taxable Profits

Depreciation 25% ×12,000 = 3,000




December 2022 Question One A

In the context of financial assets and financial liabilities:

(i)  Provide an overview of what comprises a “financial asset” and a “financial liability”. (2 marks)

(ii) With reference to the measurement and recognition of financial assets, recommend guidance to preparers of financial statements who reclassify financial assets under the following categories:

  • Reclassification of a financial asset out of the amortised cost measurement category and into the face value through profit or loss measurement category. (2 marks)
  • Reclassification of a financial asset out of the amortised cost measurement category and into the fair value through other comprehensive income measurement category.  (4 marks)



i) What comprise annual asset and financial liabilities

Financial asset is any asset that is:

  • Cash
  • Any equity instrument of another entity
  • A contractual right to receive cash from another


Financial liability is a contractual obligation to deliver cash or another financial asset to another entity or a contract that will or may be settled in the entity’s own equity instruments.

ii) Guidance to preparers of financial statement on reclassification of financial asset

  1. Financial assets out of authorized cost through profit and loss
    • Measure the new value of the reclassification date
    • Recognize any gain or loss in profit or loss
  2. Financial asset out of authorized cost through O.C.T
    • Measure four value at the reclassification
    • Recognize any gain or loss in other comprehensive income
    • Do not adjust the effective interest rate and the measurement of expected credit losses as a result of reclassification.



August 2022 Question One A

A number of developing countries are engaged in exploration of minerals to boost their economic empowerment.

Your company, an international mineral exploration firm has been contracted by one of the developing countries on a mineral exploration and evaluation engagement.



Advise the Board of Management of the company on the following:

  1. The relevant International Financial Reporting Standard (IFRS) for accounting for exploration of mineral resources and the scope of the standard.       (4 marks)
  2. The key provisions of the IFRS in (a) (i) above on impairments of assets used in exploration activities.       (3 marks)
  3. Disclosure requirements in the financial statements under the IFRS.     (3 marks)



(i) The relevant international Financial Reporting Standards (IFRS) is IFR 6 -Exploration for and evaluation of mineral resources.

The scope of the standard is stated as follows:

  • An entry shall apply the IFRS to exploration and evaluation expenditure that it incurs.
  • An entry shall not apply the IFRS to exploration and evaluation expenditure that it incurred; before the exploration for and evaluation of mineral resources, such as expenditure incurred before the entry has obtained the legal right to explore the specific area; after technical feasibility and commercial viability of extracting a mineral resource are demonstrable.


ii) Key provision on requirements

IFRS 6 effectively modifies the application of IAS 3 assets 6 impairment to exploration and evaluation; assets recognized by an entity under it accounting policy.

  • Entities recognizing exploration and evaluation assets are required to perform impairment test on those assets when specific facts and circumstances outlined in the standard indicated on impairment assets are required.
  • The fact and circumstances outlined in the IRFS 6 are non-exhaustive and are applied instead of the indicators of impairment in IAS 36.
  • Impairment loss shall be treated as an expense in the income statement
  • The company shall evaluate the indicators of impairment loss of its exploration assets

iii) Disclosure requirements

An entity shall disclose;

  • It accounting policies for exploration and evaluation expenditure including the recognition of exploration and evaluation of assets ‘
  • The amount of assets and liabilities, assets, income and expenses arising from the exploration for and evaluation of mineral resources.
  • An entity shall treat exploration and evaluation assets as a separate class of assets and make discloser required by either IAS 16 or IAS 38 consistent with how the assets are classified.
  • Impairment loss
  • Carrying amount



August 2022 Question Four A

On 1 January 2019, Brakewood Limited entered into a contract to lease an item of plant and equipment from a supplier for a three-year period. The terms of the lease were that Brakewood Limited was to pay Sh.500,000 each year with the payments commencing on 31 December 2019.

Initial direct costs incurred on the lease amounted to Sh.30,000 and were paid for by Brakewood Limited. The plant and equipment had a remaining economic useful life of five years at the inception of the lease. The lease contract did not contain any purchase option for the lessee.

Brakewood Limited can borrow at a rate of 10% a year.



Analyse the accounting treatment of the above lease transactions from the inception and for the three-year period of  the lease contract.       (10 marks)



Lease contract (IFRS 16)

Accounting treatment of the above lease transactions

W1: Initial lease liability


August 2022 Question Five A

Discuss the business concept of “triple bottom line” as applied in financial reporting. (8 marks)


Business concept of Triple bottom line as used in Financial Reporting

Triple bottom line is an accounting framework that incorporates three dimensions of performance; social, environmental and financial

  • The concept behind triple bottom line is that companies should focus as much on social and environmental issues as they do on profits
  • The triple bottom line consists of three elements; profit, people and the planet.
  • TPL theory holds that of a firm looks at profit only, ignoring people and the planet, it cannot account for the full cost of doing business.
  1. Profit ; this is the traditional measure of corporate profits
  2. People; this measures how socially responsible an organization has been throughout its history
  3. Planet; this measures how environmentally responsible a firm has been.


Complete copy of CPA FINANCIAL REPORTING AND ANALYSIS Revision Kit is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APP) and in HARD copy 

Phone: 0728 776 317


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  1. Hello my name is Elvas and I would like to enquire about FR past papers with answers,,, and revision kits if available

    1. Hi there,
      We’ve them as per the sample. Get in touch with us via 0728 776 317

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