Corporate Reporting (UK) Syllabus rationale

(P2) June 2013 to June This is a narrative explaining how the syllabus is
structured and how the main capabilities are linked.
2014 The rationale also explains in further detail what the
examination intends to assess and why.

This syllabus and study guide is designed to help Detailed syllabus

with planning study and to provide detailed
information on what could be assessed in This shows the breakdown of the main capabilities
any examination session. (sections) of the syllabus into subject areas. This is
the blueprint for the detailed study guide.
THE STRUCTURE OF THE SYLLABUS AND
STUDY GUIDE Approach to examining the syllabus

Relational diagram of paper with other papers This section briefly explains the structure of the
examination and how it is assessed.
This diagram shows direct and indirect links
between this paper and other papers preceding or Study Guide
following it. Some papers are directly underpinned
by other papers such as Advanced Performance This is the main document that students, tuition
Management by Performance Management. These providers and publishers should use as the basis of
links are shown as solid line arrows. Other papers their studies, instruction and materials.
only have indirect relationships with each other Examinations will be based on the detail of the
such as links existing between the accounting and study guide which comprehensively identifies what
auditing papers. The links between these are shown could be assessed in any examination session.
as dotted line arrows. This diagram indicates where The study guide is a precise reflection and
you are expected to have underpinning knowledge breakdown of the syllabus. It is divided into sections
and where it would be useful to review previous based on the main capabilities identified in the
learning before undertaking study. syllabus. These sections are divided into subject
areas which relate to the sub-capabilities included
Overall aim of the syllabus in the detailed syllabus. Subject areas are broken
down into sub-headings which describe the detailed
This explains briefly the overall objective of the outcomes that could be assessed in examinations.
paper and indicates in the broadest sense the These outcomes are described using verbs
capabilities to be developed within the paper. indicating what exams may require students to
demonstrate, and the broad intellectual level at
Main capabilities which these may need to be demonstrated
(*see intellectual levels below).
This paper’s aim is broken down into several main
capabilities which divide the syllabus and study Learning Materials
guide into discrete sections.
ACCA's Approved Learning Partner - content (ALP-
Relational diagram of the main capabilities c) is the programme through which ACCA approves
learning materials from high quality content
This diagram illustrates the flows and links between providers designed to support study towards ACCA’s
the main capabilities (sections) of the syllabus and qualifications.
should be used as an aid to planning teaching and
learning in a structured way. ACCA has one Platinum Approved Learning Partner
content which is BPP Learning Media. In addition,
there are a number of Gold Approved Learning
Partners - content.

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 For information about ACCA's requirement to broaden, as well as deepen
Approved Learning Partners - content, please go capabilities. It is also possible that occasionally
ACCA's Content Provider Directory. some higher level capabilities may be assessed at
lower levels.
The Directory also lists materials by Subscribers,
these materials have not been quality assured by LEARNING HOURS AND EDUCATION
ACCA but may be helpful if used in conjunction with RECOGNITION
approved learning materials. You will also
find details of Examiner suggested Additional The ACCA qualification does not prescribe or
Reading which may be a useful supplement to recommend any particular number of learning hours
approved learning materials. for examinations because study and learning
patterns and styles vary greatly between people and
organisations. This also recognises the wide
ACCA's Content Provider Directory can be found diversity of personal, professional and educational
here– circumstances in which ACCA students find
http://www.accaglobal.com/learningproviders/alpc/c themselves.
ontent_provider_directory/search/.
As a member of the International Federation of
Relevant articles will also be published in Student Accountants, ACCA seeks to enhance the education
Accountant. recognition of its qualification on both national and
international education frameworks, and with
INTELLECTUAL LEVELS educational authorities and partners globally. In
doing so, ACCA aims to ensure that its qualifications
The syllabus is designed to progressively broaden are recognized and valued by governments,
and deepen the knowledge, skills and professional regulatory authorities and employers across all
values demonstrated by the student on their way sectors. To this end, ACCA qualifications are
through the qualification. currently recognized on the education frameworks in
several countries. Please refer to your national
The specific capabilities within the detailed education framework regulator for further
syllabuses and study guides are assessed at one of information.
three intellectual or cognitive levels:
Each syllabus contains between 23 and 35 main
Level 1: Knowledge and comprehension subject area headings depending on the nature of
Level 2: Application and analysis the subject and how these areas have been broken
Level 3: Synthesis and evaluation down.

Very broadly, these intellectual levels relate to the GUIDE TO EXAM STRUCTURE
three cognitive levels at which the Knowledge
module, the Skills module and the Professional level The structure of examinations varies within and
are assessed. between modules and levels.

Each subject area in the detailed study guide The Fundamentals level examinations contain
included in this document is given a 1, 2, or 100% compulsory questions to encourage
3 superscript, denoting intellectual level, marked at candidates to study across the breadth of each
the end of each relevant line. This gives an syllabus.
indication of the intellectual depth at which an area
could be assessed within the examination. However, The Knowledge module is assessed by equivalent
while level 1 broadly equates with the Knowledge two-hour paper based and computer based
module, level 2 equates to the Skills module and examinations.
level 3 to the Professional level, some lower level
skills can continue to be assessed as the student The Skills module examinations are all paper based
progresses through each module and level. This three-hour papers. The structure of papers varies
reflects that at each stage of study there will be a from ten questions in the Corporate and Business

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Law (F4) paper to four 25 mark questions in GUIDE TO EXAMINATION ASSESSMENT
Financial Management (F9). Individual questions
within all Skills module papers will attract between ACCA reserves the right to examine anything
10 and 30 marks. contained within the study guide at any examination
session. This includes knowledge, techniques,
The Professional level papers are all three-hour principles, theories, and concepts as specified.
paper based examinations, all containing two
sections. Section A is compulsory, but there will be For the financial accounting, audit and assurance,
some choice offered in Section B. law and tax papers except where indicated
otherwise, ACCA will publish examinable
For all three hour examination papers, ACCA has documents once a year to indicate exactly
introduced 15 minutes reading and planning time. what regulations and legislation could potentially be
assessed within identified examination sessions..
This additional time is allowed at the beginning of
each three-hour examination to allow candidates to For paper based examinations regulation issued or
read the questions and to begin planning their legislation passed on or before 30th September
answers before they start writing in their answer annually, will be assessed from June 1st of the
books. This time should be used to ensure that all following year to May 31st of the year after. .
the information and exam requirements are properly Please refer to the examinable documents for the
read and understood. paper (where relevant) for further information.

During reading and planning time candidates may

Regulation issued or legislation passed in
only annotate their question paper. They may not
accordance with the above dates may be
write anything in their answer booklets until told to
examinable even if the effective date is in the future.
do so by the invigilator.
The term issued or passed relates to when
The Essentials module papers all have a Section A regulation or legislation has been formally approved.
containing a major case study question with all
requirements totalling 50 marks relating to this The term effective relates to when regulation or
case. Section B gives students a choice of two from legislation must be applied to an entity transactions
three 25 mark questions. and business practices.

Section A of both the P4 and P5 Options papers The study guide offers more detailed guidance on
contain one 50 mark compulsory question, and the depth and level at which the examinable
Section B will offer a choice of two from three documents will be examined. The study guide
questions each worth 25 marks each. should therefore be read in conjunction with the
examinable documents list.
Section A of each of the P6 and P7 Options papers
contains 60 compulsory marks from two questions;
question 1 attracting 35 marks, and question 2
attracting 25 marks. Section B of both these
Options papers will offer a choice of two from three
questions, with each question attracting 20 marks.

All Professional level exams contain four

professional marks.

The pass mark for all ACCA Qualification

examination papers is 50%.

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© ACCA 2013 All rights reserved.
 Syllabus MAIN CAPABILITIES

On successful completion of this paper candidates

should be able to:
CR AAA
(P2) (P7)
A Discuss the professional and ethical duties of
the accountant
B Evaluate the financial reporting framework
FR (F7) C Advise on and report the financial
performance of entities
D Prepare the financial statements of groups of
entities in accordance with relevant
FA (F3) accounting standards
E Explain reporting issues relating to
specialised entities
AIM F Discuss the implications of changes in
accounting regulation on financial reporting
To apply knowledge, skills and exercise professional G Appraise the financial performance and
judgement in the application and evaluation of position of entities
financial reporting principles and practices in a H Evaluate current developments
range of business contexts and situations.

RELATIONAL DIAGRAM OF MAIN CAPABILITIES

The professional and The financial Current developments

ethical duty of the reporting framework (B) (H)
accountant (A)

Reporting
the financial
performance of entities (C)

Financial statements of
groups of entities (D)

Specialised
entities (E)

Implications of changes in
accounting regulation on
financial reporting (F)

The appraisal of financial

performance and position of
entities (G)

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© ACCA 2013 All rights reserved.
RATIONALE DETAILED SYLLABUS

The syllabus for paper P2, Corporate Reporting, A The professional and ethical duty of the
assumes knowledge acquired at the Fundamentals accountant
level including the core technical capabilities to
prepare and analyse financial reports for single and 1. Professional behaviour and compliance with
combined entities. accounting standards

The Paper P2 syllabus takes the subject into greater 2. Ethical requirements of corporate reporting and
depth and contextualises the role of the accountant the consequences of unethical behaviour
as a professional steward and adviser/analyst by
initially exploring the wider professional duties and 3. Social responsibility
responsibilities of the accountant to the stakeholders
of an organisation. B The legal and financial reporting framework

The syllabus examines the financial reporting 1. The applications, strengths and weaknesses of
framework within which the accountant operates an accounting framework
and examines detailed financial reporting
requirements for entities leading to the preparation 2. Critical evaluation of principles and practices
of group financial reports in accordance with
generally accepted accounting practice and relevant 3. The legal requirements relating to the
standards. preparation of single entity financial reporting
statements
The syllabus then deals with the nature of reporting
for specialised entities including not-for-profit and C Reporting the financial performance of entities
small and medium-sized enterprises. including key differences between IFRS and UK
GAAP
The final sections of the syllabus explore – in more
depth – the role of the accountant as financial 1. Performance reporting
analyst and adviser through the assessment of
financial performance and position of entities, and 2. Non-current assets
the accountant’s role in assessing and advising on
the implications of accounting regulation on 3. Financial instruments
corporate reporting.
4. Leases
Finally, the syllabus covers the evaluation of current
developments and their implications for financial 5. Segment reporting
reporting.
For the purpose of this exam, International Financial 6. Employee benefits
Reporting Standards (IFRS) are the main accounting
standards examined in the preparation of financial 7. Taxation
information. The key differences between UK GAAP
and International Financial Reporting Standards are 8. Provisions, contingencies and events after the
looked at on a subject by subject basis. reporting date

9. Related parties

10. Share-based payment

11. Reporting requirements of small and medium-

sized entities (SMEs)

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© ACCA 2013 All rights reserved.
 D Financial statements of groups of entities
including key differences between IFRS and UK
GAAP

1. Group accounting including cash flow

statements

2. Continuing and discontinued interests

3. Changes in group structures

4. Foreign transactions and entities

E Specialised entities and specialised

transactions

1. Financial reporting in specialised, not-for-profit

and public sector entities

2. Entity schemes of arrangement and

reconstructions

F Implications of changes in accounting

regulation on financial reporting

1. The effect of changes in accounting standards

on accounting systems

2. Proposed changes to accounting standards

G The appraisal of financial performance and

position of entities

1. The creation of suitable accounting policies

2. Analysis and interpretation of financial

information and measurement of performance

H Current developments

1. Environmental and social reporting

2. Convergence between national and

international reporting standards

3. Current reporting issues

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© ACCA 2013 All rights reserved.
APPROACH TO EXAMINING THE SYLLABUS

The syllabus is assessed by a three-hour paper-

based examination. It examines professional
competences within the corporate reporting
environment.

Students will be examined on concepts, theories,

and principles, and on their ability to question and
comment on proposed accounting treatments.

Students should be capable of relating professional

issues to relevant concepts and practical situations.
The evaluation of alternative accounting practices
and the identification and prioritisation of issues will
be a key element of the paper. Professional and
ethical judgement will need to be exercised,
together with the integration of technical knowledge
when addressing corporate reporting issues in a
business context.

Global issues will be addressed via the current

issues questions on the paper. Students will be
required to adopt either a stakeholder or an external
focus in answering questions and to demonstrate
personal skills such as problem solving, dealing with
information and decision making.
The paper also deals with specific professional
knowledge appropriate to the preparation and
presentation of consolidated and other financial
statements from accounting data to conform with
accounting standards.

The paper will comprise two sections.

Section A Compulsory question 50 marks

Section B 2 from 3 questions of
25 marks each 50 marks
100 marks

Section A will consist of one scenario-based

question worth 50 marks. It will deal with the
preparation of consolidated financial statements
including group cash flow statements and with
issues in financial reporting.

Students will be required to answer two out of three

questions in Section B, which will normally
comprise two questions which will be scenario or
case-study based and one essay question which
may have some computational element. Section B
could deal with any aspects of the syllabus.

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© ACCA 2013 All rights reserved.
 Study Guide 2. Critical evaluation of principles and practices

a) Identify the relationship between accounting

A THE PROFESSIONAL AND ETHICAL DUTIES theory and practice.[2]
OF THE ACCOUNTANT
b) Critically evaluate accounting principles and
1. Professional behaviour and compliance with practices used in corporate reporting.[3]
accounting standards
3. Legal requirements relating to the preparation
a) Appraise and discuss the ethical and of single entity financial statements
professional issues in advising on corporate
reporting.[3] a) Recognise and apply the laws, regulations,
accounting standards and other requirements
b) Assess the relevance and importance of ethical to the preparation of statutory financial
and professional issues in complying with statements of an entity, including the
accounting standards.[3] circumstances where an entity is required to
prepare and present statutory financial
2. Ethical requirements of corporate reporting and statements.[2]
the consequences of unethical behaviour
C REPORTING THE FINANCIAL PERFORMANCE
a) Appraise the potential ethical implications of OF ENTITIES
professional and managerial decisions in the
preparation of corporate reports.[3] 1. Performance reporting

b) Assess the consequences of not upholding a) Prepare reports relating to corporate

ethical principles in the preparation of performance for external stakeholders.[3]
corporate reports.[3]
b) Discuss the issues relating to the recognition of
3. Social Responsibility revenue

a) Discuss the increased demand for transparency c) Evaluate proposed changes to reporting
in corporate reports, and the emergence of financial performance.[3]
non-financial reporting standards.[3]
2. Non-current assets
b) Discuss the progress towards a framework for
environmental and sustainability reporting.[3] a) Apply and discuss the timing of the recognition
of non-current assets and the determination of
B THE FINANCIAL REPORTING FRAMEWORK their carrying amounts including impairments
and revaluations.[3]
1. The applications, strengths and weaknesses of
an accounting framework b) Apply and discuss the treatment of non-current
assets held for sale.[3]
a) Evaluate the “balance sheet” and “fair value”
models adopted by standard setters.[3] c) Apply and discuss the accounting treatment of
investment properties including classification,
b) Discuss the use of an accounting framework in recognition and measurement issues.[3]
underpinning the production of accounting
standards.[3] d) Apply and discuss the accounting treatment of
intangible assets including the criteria for
c) Assess the success of such a framework in recognition and measurement subsequent to
introducing rigorous and consistent accounting acquisition and classification.[3]
standards.[3]

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© ACCA 2013 All rights reserved.
3) Discuss and apply the key differences between 6. Employee Benefits
UK GAAP and IFRS in accounting and non-
current assets including revaluation, a) Apply and discuss the accounting treatment of
impairment and investment property. [3] short term and long term benefits.[3]

3. Financial Instruments b) Apply and discuss the accounting treatment of

defined contribution and defined benefit
a) Apply and discuss the recognition and de- plans.[3]
recognition of financial assets and financial
liabilities.[2] c) Account for gains and losses on settlements
and curtailments.[2]
b) Apply and discuss the classification of financial
assets and financial liabilities and their d) Account for the “Asset Ceiling” test and the
measurement.[2] reporting of actuarial gains and losses.[2]

c) Apply and discuss the treatment of gains and e) Discuss the key differences between UK GAAP
losses arising on financial assets and financial and IFRS in accounting for Employee Benefits.
liabilities.[2] [3]

d) Apply and discuss the treatment of 7. Taxation

impairments of financial assets.[2]
a) Apply and discuss the recognition and
e) Account for derivative financial instruments, measurement of deferred tax liabilities and
and simple embedded derivatives.[2] deferred tax assets.[3]

f) Outline the principles of hedge accounting and b) Determine the recognition of tax expense or
account for fair value hedges and cash flow income and its inclusion in the financial
hedges including hedge effectiveness.[2] statements.[3]

4. Leases c) Discuss and apply the key differences between

UK GAAP and IFRS in accounting for taxation.
[3]
a) Apply and discuss the classification of leases
and accounting for leases by lessors and
lessees.[3] 8. Provisions, contingencies and events after the
reporting date
b) Account for and discuss sale and leaseback
transactions.[3] a) Apply and discuss the recognition, de-
recognition and measurement of provisions,
c) Discuss and apply the key differences between contingent liabilities and contingent assets
UK GAAP and IFRS in accounting for leases. [3] including environmental provisions.[3]

5. Segment Reporting b) Calculate and discuss restructuring

provisions.[3]
a) Determine the nature and extent of reportable
segments.[3] c) Apply and discuss the accounting for events
after the reporting date.[3]
b) Specify and discuss the nature of segment
information to be disclosed.[3] d) Determine and report going concern issues
arising after the reporting date.[3]
c) Discuss and apply the key differences between
UK GAAP and IFRS in accounting for
segments. [3]

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© ACCA 2013 All rights reserved.
 9. Related parties D FINANCIAL STATEMENTS OF GROUPS OF
ENTITIES
a) Determine the parties considered to be related
to an entity.[3] 1. Group accounting including cash flow
statements
b) Identify the implications of related party
relationships and the need for disclosure.[3] a) Apply the method of accounting for business
combinations including complex group
c) Discuss and apply the key differences between structures.[3]
UK GAAP and IFRS in accounting for related
parties. [3] b) Apply the principles in determining the cost of
a business combination.[3]
10. Share based payment
c) Apply the recognition and measurement criteria
a) Apply and discuss the recognition and for identifiable acquired assets and liabilities
measurement criteria for share-based payment and goodwill including step acquisitions.[3]
transactions.[3]
d) Apply and discuss the criteria used to identify a
b) Account for modifications, cancellations and subsidiary and an associate.[3]
settlements of share based payment
transactions.[2] e) Determine and apply appropriate procedures to
be used in preparing group financial
11. Reporting requirements of small and medium- statements.[3]
sized entities (SMEs)
f) Identify and outline (using relevant legislation,
a) Outline the principal considerations in accounting standards and other applicable
developing a set of accounting standards for regulation):
SMEs.[3] - the circumstances in which a group is
required to prepare consolidated financial
b) Discuss solutions to the problem of differential statements.[2]
financial reporting.[3] - the circumstances when a group may claim
and exemption from the preparation of
c) Discuss the reasons why the IFRS for SME’s consolidated financial statements.[2]
does not address certain topics. [3] - why directors may not wish to consolidate a
subsidiary and where this is permitted.[2]
d) Discuss the accounting treatments not
allowable under the IFRS for SME’s including g) Apply the equity method of accounting for
the revaluation model for certain assets , [3] associates.[3]

e) Discuss and apply the simplifications h) Outline and apply the key definitions and
introduced by the IFRS for SME’s including accounting methods which relate to interests in
accounting for goodwill and intangible assets, joint arrangements.[3]
financial instruments, defined benefit schemes,
exchange differences and associates and joint i) Prepare and discuss group cash flow
ventures. [3] statements.[3]

f) Discuss the key differences in principle j) Discuss and apply the key differences between
between IFRS and UK GAAP. [2] UK GAAP and IFRS in accounting for business
combinations

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© ACCA 2013 All rights reserved.
2. Continuing and discontinued interests c) Outline the appropriate accounting treatment
and relevant disclosures required relating to
a) Prepare group financial statements where schemes of arrangement and reconstructions.[2]
activities have been discontinued, or have been
acquired or disposed of in the period.[3] F IMPLICATIONS OF CHANGES IN
ACCOUNTING REGULATION ON FINANCIAL
b) Apply and discuss the treatment of a subsidiary REPORTING
which has been acquired exclusively with a
view to subsequent disposal.[3] 1. The effect of changes in accounting standards
on accounting systems
3. Changes in group structures
a) Apply and discuss the accounting implications
a) Discuss the reasons behind a group of the first time adoption of a body of new
reorganisation.[3] accounting standards.[3]

b) Evaluate and assess the principal terms of a 2. Proposed changes to accounting standards
proposed group reorganisation.[3]
a) Identify issues and deficiencies which have led
4. Foreign transactions and entities to a proposed change to an accounting
standard.[2]
a) Outline and apply the translation of foreign
currency amounts and transactions into the G THE APPRAISAL OF FINANCIAL
functional currency and the presentational PERFORMANCE AND POSITION OF ENTITIES
currency.[3]
1. The creation of suitable accounting policies
b) Account for the consolidation of foreign
operations and their disposal.[2] a) Develop accounting policies for an entity which
meet the entity’s reporting requirements.[3]
E SPECIALISED ENTITIES AND SPECIALISED
TRANSACTIONS b) Identify accounting treatments adopted in
financial statements and assess their suitability
1. Financial reporting in specialised, not-for-profit and acceptability.[3]
and public sector entities
2. Analysis and interpretation of financial
a) Apply knowledge from the syllabus to information and measurement of performance
straightforward transactions and events arising
in specialised, not-for-profit, and public sector a) Select and calculate relevant indicators of
entities.[3] financial and non-financial performance.[3]

2. Entity schemes of arrangement and b) Identify and evaluate significant features and
reconstructions issues in financial statements.[3]

a) Identify when an entity may no longer be c) Highlight inconsistencies in financial

viewed as a going concern or uncertainty exists information through analysis and application of
surrounding the going concern status.[2] knowledge.[3]

b) Identify and outline the circumstances in which d) Make inferences from the analysis of
a scheme of arrangement or reconstruction information taking into account the limitation
would be an appropriate alternative to a of the information, the analytical methods used
company liquidation.[2] and the business environment in which the
entity operates.[3]

H CURRENT DEVELOPMENTS

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 1. Environmental and social reporting

a) Appraise the impact of environmental, social,

and ethical factors on performance
measurement.[3]

b) Evaluate current reporting requirements in the

area.[3]

c) Discuss why entities might include disclosures

relating to the environment and society.[3]

2. Convergence between national and

international reporting standards

a) Evaluate the implications of worldwide

convergence with International Financial
Reporting Standards.[3]

b) Discuss the influence of national regulators on

international financial reporting.[2]

3. Current reporting issues

a) Discuss current issues in corporate reporting.[3]

NOTE OF SIGNIFICANT CHANGES TO STUDY

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© ACCA 2013 All rights reserved.
GUIDE PAPER P2 UK

ACCA periodically reviews its qualification syllabuses so that they fully meet the needs of stakeholders such as
employers, students, regulatory and advisory bodies and learning providers

Table 1 – Additions to P2 UK

There have not been any additions to the 2013 study guide. However there have been minor amendments to
the wording of some of the study guide outcomes corresponding to changes within examinable documents.

Table 2 – Deletions to P2 UK

There have not been any deletions to the 2013 study guide. However there have been minor amendments to the
wording of some of the study guide outcomes corresponding to changes within examinable documents.

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© ACCA 2013 All rights reserved.