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Weeks
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Topics Covered
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Detail
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1
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Partnership accounts
Admission and amalgamation
Dissolution, liquidation of Partnership
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- Define a partnership and state its
essential elements
- Understand goodwill
- Prepare
Profit and Loss Appropriation Account
Capital account
Current account
- Process the necessary adjustments on
the admission of a new partner, namely:
- Revaluation of assets and liabilities
of the firm
- Treatment of goodwill
- Application of new profit sharing ratio
- Prepare the nominal accounts, profit
and loss account and statement of financial position upon amalgamation
of two partnerships
- Make journal entries in the case of
the dissolution of a partnership to record:
- Transfer and sale of assets and
liabilities to third parties and partners
- Payment of realization expenses
- Closing of the realization account and
settlement of partners’ capital account.
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2
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Retirement, death of Partner
Introduction to the company Accounts :The
issue of shares and debentures
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- Process the necessary adjustments on
the death or retirement of a partner:
- adjustments relating to goodwill,
accumulated reserves and undistributed profits
- revaluation account
- adjustment and treatment of partners’
capital
- application of new profit sharing ratio
- explain the terminology relating to
the issue of shares and debentures
- describe the steps in the process of
issuing of shares and debentures
- record the accounting entries relating
to the issue of shares and debentures
- make the necessary entries in the ledger
accounts when shares are forfeited
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3
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Companies purchasing and
redeeming their own shares
and
debentures
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- explain, in the context of shares and
debentures, the difference between the terms ‘purchasing’ and
‘redeeming’
- describe the alternative ways in which a
company may purchase or redeem its own shares and debentures
- explain the difference between the
purchase/redemption opportunities available to private companies, and
those available to other companies
- record the accounting entries relating
to the purchase and the redemption of
shares and debentures
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4
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Limited companies taking over other
businesses
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- explain how goodwill may arise on the
purchase of a business
- explain the difference between
goodwill and negative goodwill
- record the accounting entries relating to a
limited company taking over another business
- describe the difference in the accounting
treatment of takeovers by limited companies of sole traders,
partnerships and limited companies
- describe the two methods whereby a limited
company may take over another limited company
- deal with pre-incorporation profits and
losses
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5
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Taxation in company financial
Statements
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- explain why profit as per the profit and
loss account is normally different from assessable profit for
corporation tax calculations
- explain how income tax on interest
affects companies and individuals
- describe how the ‘imputation system’
operates
- describe how and why deferred tax is
relevant to capital allowances
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6
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Provisions,
reserves and liabilities
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- explain the difference between a
provision and a liability
- explain the difference between revenue
reserves and capital reserves
- describe how capital reserves may be
used
- describe what normally comprises
distributable profits
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7
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The financial statements of limited companies:
profit and loss accounts, related statements and notes
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- state how the Companies Act defines
company size
- explain the alternative presentation formats
available under the Companies Acts that must be used when preparing profit
and loss accounts for external reporting purposes
- explain how to present financial
information under the most commonly used Companies Act format
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8
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The financial statements of limited companies:
profit and loss accounts, related statements and notes
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- describe the differences between the most
commonly used statutory financial
- statement format and the formats
generally adopted for internal use
- describe the
requirements that relate to the profit and loss account
concerning: continuing operations, acquisitions , discontinued
operations, sale or termination
of an operation , reorganization and restructuring costs ,
- profits and losses on disposal of fixed
assets,
- exceptional and extraordinary items and
- prior period adjustments
- describe the format of the statement
of total recognised gains and losses
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9
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The financial statements of limited companies:
balance sheets
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- describe the most commonly used format
available under the Companies Acts that may be used when preparing
balance sheets for external reporting purposes
- present information under the most commonly
used of the Companies Acts formats
- describe the differences between the
statutory format and formats generally adopted for internal use
- describe the additional notes to published
financial statements that are required by the Companies Acts
- describe the requirement to include a
directors’ report with the published
financial statements
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10
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Cash
flow statements
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- explain the purpose of cash flow
information
- explain the difference between cash
flow and profit
- prepare a cash flow statement for a
company following the format Of IAS 7
- Prepare and differentiate between
direct and indirect method
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11
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Group financial statements:
an
introduction
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- explain the difference between a
parent undertaking and a subsidiary undertaking explain the importance
of the control concept
- describe the circumstances under which a
parent/subsidiary relationship is recognized
- describe the conditions whereby companies
are exempt from preparing consolidated financial statements
- describe the conditions under which a
subsidiary company should not be included in the consolidated financial
statements
- explain why it is important to produce
consolidated financial statements
- describe some of the alternative methods
whereby control can be acquired by one company over another
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12
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Consolidation of balance sheets: basic
mechanics (I)
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- explain the principle of cancellation that
is adopted when preparing consolidated financial statements
- explain why goodwill may arise on
consolidation
- calculate goodwill and include it in the
consolidated balance sheet
- explain what is meant by the term ‘minority
interest’
- explain how the existence of reserves at the
time of acquisition affects the preparation of consolidated financial
statements
- explain the implications when the date of
acquisition and the group balance sheet date do not coincide
- explain that the calculation of goodwill is
performed as at the date of acquisition
- describe the difference in treatment between
pre- and post-acquisition reserves of subsidiary undertakings
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13
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Intercompany dealings:
indebtedness and unrealized profit in
stocks , acquisition of shares in subsidiaries
at different dates & Intra-group dividends
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- explain how to treat intra-group
indebtedness upon consolidation
- explain how to treat unrealized intragroup
profits upon consolidation
- calculate goodwill when an interest in a
subsidiary undertaking was acquired in
- blocks over a period of time
- calculate goodwill when a subsidiary
undertaking was acquired part-way through its accounting period
- explain how to treat intra-group
dividends
- explain how to treat dividends from a newly
acquired subsidiary undertaking that were proposed prior to the
acquisition date
- explain how to treat dividends proposed by
subsidiary undertakings at the
- balance sheet date
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14
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Consolidated balance sheets: sundry matters
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- calculate goodwill on the purchase of
preference shares
- treat unrealised profits and losses on
intra-group asset sales
- describe the effect of ‘fair value’ on the
calculation of goodwill and on the preparation of the consolidated
financial statements
- explain how a company that is the subsidiary
of another is also a subsidiary of its parent’s own parent undertaking
- consolidate groups that include subsidiaries
of subsidiaries
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15
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Consolidated profit and
loss accounts
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- prepare consolidated profit and loss
accounts for groups with wholly-owned subsidiaries
- prepare consolidated profit and loss
accounts for groups with wholly-owned subsidiaries
- explain when merger accounting should
be used
- explain the difference between the
acquisition and the merger methods of preparing consolidated financial
statements
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16
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Ratio
and trend Analysis
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- describe various groups of accounting
ratios, where they would be used, why they would be of interest, and to
whom they would be of interest
- calculate a number of commonly used
accounting ratios
- describe some of the difficulties that may
arise in the calculation and interpretation of accounting ratios
- describe the dangers of overtrading and how
ratio analysis can be used to detect it
- explain the importance of trend
analysis when analysing financial statements
- explain that there is no such thing as a
generally ‘good’ or ‘bad’ value for any ratio
- describe the need to compare like with like
if attempting to assess the quality of the result found from ratio
analysis
- explain the pyramid of ratios that can be
used in order to enhance the view obtained from ratio analysis
- explain that different groups of users of
financial statements have access to different sources of information
that may help in developing an understanding of and explanation for the
results of ratio analysis
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Riaz Academy
