FINANCIAL ACCOUNTING AND REPORTING SYLLABUS

UPDATE FOR 2014

By the examiners
In the last quarter of 2013 the first of the new Professional Level examinations were sat by
candidates, which included the new Financial Accounting and Reporting paper (FAR). The FAR
paper is a three hour exam and contains either four or five written test questions: the September
2013 exam contained five questions and the December 2013 contained four questions. This
flexibility continues throughout 2014.
There have been no specific changes to the FAR syllabus itself between 2013 and 2014, with both
the format of the paper and question styles remaining the same. Instead, the changes in 2014 are
to take account of technical changes driven by the publication of new standards.
The syllabus weightings for 2014 continue to be:
Accounting and reporting concepts and ethics
Single entity financial statements
60%
Consolidated financial statements
30%

10%

The FAR paper consists of broadly five different question types. Of these five, there will always be
one question covering the preparation of single entity financial statements, one covering the
preparation of consolidated financial statements, and an explanation of the application of IFRS to
specified scenarios style of question. The remaining one or two questions will be in the style of a
mixed or single topic question requiring calculations and/or extracts with or without an explanation
of the financial reporting treatment, or the preparation of a statement of cash flows, either single
entity (extracts or the completion of) or consolidated.
As mentioned above the technical changes made to the FAR syllabus in 2014 are to take account
of the four new standards published in May 2011. The standards, although published in 2011, have
an effective date of annual periods beginning on or after 1 January 2013, and hence didnt affect
the FAR syllabus until 2014.
The first of the new standards is IFRS 10 Consolidated Financial Statements and replaces IAS 27
Consolidated and Separate Financial Statements, which has now become IAS 27 Separate
Financial Statements. The main change sees IFRS 10 introduce a new definition of control;
however for the purpose of the FAR exam consolidation techniques and application remain
unchanged.
The second new standard is IFRS 11 Joint Arrangements and this supersedes IAS 31 Interests in
Joint Ventures. The scope of IAS 28 Interests in Associates was also extended to include joint
ventures and was consequently renamed IAS 28 Interests in Associates and Joint Ventures. IAS
31 focused on the legal form of the arrangement between the parties, but IFRS 11 instead requires
consideration of the rights and obligations of the arrangements between the parties. For the
purpose of the FAR exam, the arrangement will be set out clearly with a focus on the existence of
a contractual agreement which results in the parties having joint control over the shared activities.
Therefore, the only practical change is that equity accounting should now be applied for all joint
ventures.
ICAEW 2014

The third new standard is IFRS 12 Disclosure of Interests in Other Entities. This is a new standard
that covers enhanced disclosure requirements for entities that are subject to an assessment of
control under IFRS 10, such as joint arrangements, associates and special purpose entities.
The final new standard is IFRS 13 Fair Value Measurement which provides guidance as to how the
concept of fair value should be applied in practice. The standard does not extend the use of fair
value accounting.
For more information on FAR candidates should review the subject syllabus documents and
learning materials in detail.
More details on the Professional Level examinations can be found on the ICAEW student
resources page.

ICAEW 2014