Corporate Reporting (UK) Syllabus rationale

(P2) September 2017 to This is a narrative explaining how the syllabus is

June 2018 structured and how the main capabilities are linked.
The rationale also explains in further detail what the
examination intends to assess and why.
This syllabus and study guide is designed to help
with planning study and to provide detailed Detailed syllabus
information on what could be assessed in
any examination session. This shows the breakdown of the main capabilities
(sections) of the syllabus into subject areas. This is
THE STRUCTURE OF THE SYLLABUS AND the blueprint for the detailed study guide.
STUDY GUIDE
Approach to examining the syllabus
Relational diagram of paper with other papers
This section briefly explains the structure of the
This diagram shows direct and indirect links examination and how it is assessed.
between this paper and other papers preceding or
following it. Some papers are directly underpinned Study Guide
by other papers such as Advanced Performance
Management by Performance Management. These This is the main document that students, learning
links are shown as solid line arrows. Other papers and content providers should use as the basis of
only have indirect relationships with each other their studies, instruction and materials.
such as links existing between the accounting and Examinations will be based on the detail of the
auditing papers. The links between these are shown study guide which comprehensively identifies what
as dotted line arrows. This diagram indicates where could be assessed in any examination session.
you are expected to have underpinning knowledge The study guide is a precise reflection and
and where it would be useful to review previous breakdown of the syllabus. It is divided into sections
learning before undertaking study. based on the main capabilities identified in the
syllabus. These sections are divided into subject
Overall aim of the syllabus areas which relate to the sub-capabilities included
in the detailed syllabus. Subject areas are broken
This explains briefly the overall objective of the down into sub-headings which describe the detailed
paper and indicates in the broadest sense the outcomes that could be assessed in examinations.
capabilities to be developed within the paper. These outcomes are described using verbs
indicating what exams may require students to
Main capabilities demonstrate, and the broad intellectual level at
which these may need to be demonstrated
This paper’s aim is broken down into several main (*see intellectual levels below).
capabilities which divide the syllabus and study
guide into discrete sections. INTELLECTUAL LEVELS

Relational diagram of the main capabilities The syllabus is designed to progressively broaden
and deepen the knowledge, skills and professional
This diagram illustrates the flows and links between values demonstrated by the student on their way
the main capabilities (sections) of the syllabus and through the qualification.
should be used as an aid to planning teaching and
learning in a structured way. The specific capabilities within the detailed
syllabuses and study guides are assessed at one of
three intellectual or cognitive levels:

Level 1: Knowledge and comprehension

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 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 Corporate and Business Law (F4)
progresses through each module and level. This paper is a two- hour objective test examination
reflects that at each stage of study there will be a which is also available as a computer based exams
requirement to broaden, as well as deepen for English and Global variants, as well as paper
capabilities. It is also possible that occasionally based for all variants.
some higher level capabilities may be assessed at
lower levels. The skills module examinations F5-F9 contain a mix
of objectives and longer type questions with a
LEARNING HOURS AND EDUCATION duration of three hours for 100 marks.* These are
RECOGNITION available as computer-based and paper-based
exams. In the computer-based exams there may be
The ACCA qualification does not prescribe or instances where we have extra content for the
recommend any particular number of learning hours purposes of ongoing quality assurance and security.
for examinations because study and learning
patterns and styles vary greatly between people and * For paper-based exams there is an extra 15
organisations. This also recognises the wide minutes to reflect the manual effort required.
diversity of personal, professional and educational
circumstances in which ACCA students find The Professional level papers are all of three hours
themselves. 15 minutes duration and, all contain two sections.
Section A is compulsory, but there will be
As a member of the International Federation of some choice offered in Section B.
Accountants, ACCA seeks to enhance the education
recognition of its qualification on both national and ACCA has removed the restriction relating to reading
international education frameworks, and with and planning time, so that while the time
educational authorities and partners globally. In considered necessary to complete these exams
doing so, ACCA aims to ensure that its qualifications remains at 3 hours, candidates may use the
are recognized and valued by governments, additional 15 minutes as they choose. ACCA
regulatory authorities and employers across all encourages students to take time to read questions
sectors. To this end, ACCA qualifications are carefully and to plan answers but once the exam
currently recognized on the education frameworks in time has started, there are no additional restrictions
several countries. Please refer to your national as to when candidates may start writing in their
education framework regulator for further answer books.
information.
Time should be taken to ensure that all the
Each syllabus contains between 23 and 35 main information and exam requirements are properly
subject area headings depending on the nature of read and understood.

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The Essentials module papers all have a Section A
containing a major case study question with all
requirements totalling 50 marks relating to this
case. Section B gives students a choice of two from
three 25 mark questions.

Section A of both the P4 and P5 Options papers

contain one 50 mark compulsory question, and
Section B will offer a choice of two from three
questions each worth 25 marks each.

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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 GUIDE TO EXAMINATION ASSESSMENT

ACCA reserves the right to examine anything

contained within the study guide at any examination
session. This includes knowledge, techniques,
principles, theories, and concepts as specified.

For the financial accounting, audit and assurance,

law and tax papers except where indicated
otherwise, ACCA will publish examinable
documents once a year to indicate exactly
what regulations and legislation could potentially be
assessed within identified examination sessions..

For paper based examinations regulation issued or

legislation passed on or before 31st August annually,
will be examinable from 1st September of the
following year to 31st August t of the year after that.
Please refer to the examinable documents for the
paper (where relevant) for further information.

Regulation issued or legislation passed in

accordance with the above dates may be
examinable even if the effective date is in the future.
The term issued or passed relates to when
regulation or legislation has been formally approved.

The term effective relates to when regulation or

legislation must be applied to an entity transactions
and business practices.

The study guide offers more detailed guidance on

the depth and level at which the examinable
documents will be examined. The study guide
should therefore be read in conjunction with the
examinable documents list.

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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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 RATIONALE

The syllabus for paper P2, Corporate Reporting,

assumes knowledge acquired at the Fundamentals
level including the core technical capabilities to
prepare and analyse financial reports for single and
combined entities.

The Paper P2 syllabus takes the subject into greater

depth and contextualises the role of the accountant
as a professional steward and adviser/analyst by
initially exploring the wider professional duties and
responsibilities of the accountant to the stakeholders
of an organisation.

The syllabus examines the financial reporting

framework within which the accountant operates
and examines detailed financial reporting
requirements for entities leading to the preparation
of group financial reports in accordance with
generally accepted accounting practice and relevant
standards.

The syllabus then deals with the nature of reporting

for specialised entities including not-for-profit and
small and medium-sized enterprises.

The final sections of the syllabus explore – in more

depth – the role of the accountant as financial
analyst and adviser through the assessment of
financial performance and position of entities, and
the accountant’s role in assessing and advising on
the implications of accounting regulation on
corporate reporting.

Finally, the syllabus covers the evaluation of current

developments and their implications for financial
reporting.

For the purpose of this exam, International Financial

Reporting Standards (IFRS) are the main accounting
standards examined in the preparation of financial
information. The key differences between UK GAAP
and International Financial Reporting Standards are
looked at on a subject by subject basis.

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DETAILED SYLLABUS D Financial statements of groups of entities

A The professional and ethical duty of the 1. Group accounting including cash flow
accountant statements

1. Professional behaviour and compliance with 2. Continuing and discontinued interests

accounting standards
3. Changes in group structures
2. Ethical requirements of corporate reporting and
the consequences of unethical behaviour 4. Foreign transactions and entities

3. Social responsibility E Specialised entities and specialised

transactions
B The legal and financial reporting framework
1. Financial reporting in specialised, not-for-profit
1. The applications, strengths and weaknesses of and public sector entities
an accounting framework
2. Entity schemes of arrangement and
2. Critical evaluation of principles and practices reconstructions

3. The legal requirements relating to the F Implications of changes in accounting

preparation of single entity financial reporting regulation on financial reporting
statements
1. The effect of changes in accounting standards
C Reporting the financial performance of entities on accounting systems

1. Performance reporting 2. Proposed changes to accounting standards

2. Non-current assets G The appraisal of financial performance and

position of entities
3. Financial instruments
1. The creation of suitable accounting policies
4. Leases
2. Analysis and interpretation of financial
5. Segment reporting information and measurement of performance

6. Employee benefits H Current developments

7. Taxation 1. Environmental and social reporting

8. Provisions, contingencies and events after the 2. Convergence between national and
reporting date international reporting standards

9. Related parties 3. Current reporting issues

10. Share-based payment

11. Reporting requirements of small and medium-

sized entities (SMEs) including key differences
between the requirements of the IFRS for
SMEs and UK GAAP

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 APPROACH TO EXAMINING THE SYLLABUS accounting standards will feature prominently in this
section on initial introduction
The syllabus is assessed by a three-hour 15 minutes
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. New

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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 and apply the criteria that must be met
3. Social Responsibility before an entity can apply the revenue
recognition model to a contract.[3]
a) Discuss the increased demand for transparency
in corporate reports, and the emergence of c) Discuss and apply the five-step model which
non-financial reporting standards.[3] relates to revenue earned from a contract with
a customer [3]
b) Discuss the progress towards a framework for
integrated reporting.[3] 2. Non-current assets

B THE FINANCIAL REPORTING FRAMEWORK a) Apply and discuss the timing of the recognition
of non-current assets and the determination of
1. The applications, strengths and weaknesses of their carrying amounts including impairments
an accounting framework and revaluations.[3]

a) Evaluate the “valuation models adopted by b) Apply and discuss the treatment of non-current
standard setters.[3] assets held for sale.[3]

b) Discuss the use of an accounting framework in c) Apply and discuss the accounting treatment of
underpinning the production of accounting investment properties including classification,
standards.[3] recognition and measurement issues.[3]

c) Assess the success of such a framework in d) Apply and discuss the accounting treatment of
introducing rigorous and consistent accounting intangible assets including the criteria for
standards.[3] recognition and measurement subsequent to
acquisition and classification.[3]

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 3. Financial Instruments 6. Employee Benefits

a) Apply and discuss the recognition and de- a) Apply and discuss the accounting treatment of
recognition of financial assets and financial short term and long term benefits and defined
liabilities.[2] contribution and defined benefit plans .[3]

b) Apply and discuss the classification of financial b) Account for gains and losses on settlements
assets and financial liabilities and their and curtailments.[2]
measurement.[2]
c) Account for the “Asset Ceiling” test and the
c) Apply and discuss the treatment of gains and reporting of actuarial gains and losses.[2]
losses arising on financial assets and financial
liabilities.[2] 7. Taxation

d) Apply and discuss the treatment of the a) Apply and discuss the recognition and
expected loss impairment model.[2] measurement of deferred tax liabilities and
deferred tax assets.[3]
e) Account for derivative financial instruments,
and simple embedded derivatives.[2] b) Determine the recognition of tax expense or
income and its inclusion in the financial
f) Outline the principles of hedge accounting and statements.[3]
account for fair value hedges and cash flow
hedges including hedge effectiveness.[2] 8. Provisions, contingencies and events after the
reporting date
4. Leases
a) Apply and discuss the recognition, de-
a) Discuss and apply the accounting treatment for recognition and measurement of provisions,
leases by lessees including the measurement of contingent liabilities and contingent assets
the right of use asset and liability including environmental provisions and
b. Discuss and apply the accounting for leases by restructuring provisions.[3]
lessors
c Discuss and apply the circumstances where b) Apply and discuss the accounting for events
there may be re-measurement of the lease after the reporting date.[3]
liability
d. Discuss and apply the reasons behind the c) Determine and report going concern issues
separation of the components of a lease arising after the reporting date.[3]
contract into lease and non-lease elements
e Discuss the recognition exemptions under the 9. Related parties
current leasing standard
a) Determine the parties considered to be related
to an entity.[3]
f) Account for and discuss sale and leaseback
transactions.[3] b) Identify the implications of related party
relationships and the need for disclosure.[3]
5. Segment Reporting
10. Share based payment
a) Determine the nature and extent of reportable
segments.[3] a) Apply and discuss the recognition and
measurement criteria for share-based payment
b) Specify and discuss the nature of segment transactions.[3]
information to be disclosed.[3]

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b) Account for modifications, cancellations and consolidated financial statements.[2]
settlements of share based payment - why directors may not wish to consolidate a
transactions.[2] subsidiary and where this is permitted.[2]

11. Reporting requirements of small and medium- g) Apply the equity method of accounting for
sized entities (SMEs) associates.[3]

a) Discuss the accounting treatments not h) Outline and apply the key definitions and
allowable under the IFRS for SME’s including accounting methods which relate to interests in
the revaluation model for certain assets , [3] joint arrangements.[3]

b) Discuss and apply the simplifications i) Prepare and discuss group cash flow
introduced by the IFRS for SME’s including statements.[3]
accounting for goodwill and intangible assets,
financial instruments, defined benefit schemes, 2. Continuing and discontinued interests
exchange differences and associates and joint
ventures. [3] a) Prepare group financial statements where
activities have been discontinued, or have been
c) Discuss the key differences between the IFRS acquired or disposed of in the period.[3]
for SMEs and UK GAAP. [2]
b) Apply and discuss the treatment of a subsidiary
D FINANCIAL STATEMENTS OF GROUPS OF which has been acquired exclusively with a
ENTITIES view to subsequent disposal.[3]

1. Group accounting including cash flow 3. Changes in group structures

statements
a) Discuss the reasons behind a group
a) Apply the method of accounting for business reorganisation.[3]
combinations including complex group
structures.[3] b) Evaluate and assess the principal terms of a
proposed group reorganisation.[3]
b) Apply the principles in determining the cost of
a business combination.[3] 4. Foreign transactions and entities

c) Apply the recognition and measurement criteria a) Outline and apply the translation of foreign
for identifiable acquired assets and liabilities currency amounts and transactions into the
and goodwill including step acquisitions.[3] functional currency and the presentational
currency.[3]
d) Apply and discuss the criteria used to identify a
subsidiary and an associate.[3] b) Account for the consolidation of foreign
operations and their disposal.[2]
e) Determine and apply appropriate procedures to
be used in preparing group financial E SPECIALISED ENTITIES AND SPECIALISED
statements.[3] TRANSACTIONS

f) Identify and outline (using relevant legislation, 1. Financial reporting in specialised, not-for-profit
accounting standards and other applicable and public sector entities
regulation):
- the circumstances in which a group is a) Apply knowledge from the syllabus to
required to prepare consolidated financial straightforward transactions and events arising
statements.[2] in specialised, not-for-profit, and public sector
- the circumstances when a group may claim entities.[3]
and exemption from the preparation of

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 2. Entity schemes of arrangement and c) Highlight inconsistencies in financial
reconstructions information through analysis and application of
knowledge.[3]
a) Identify when an entity may no longer be
viewed as a going concern or uncertainty exists d) Make inferences from the analysis of
surrounding the going concern status.[2] information taking into account the limitation
of the information, the analytical methods used
b) Identify and outline the circumstances in which and the business environment in which the
a scheme of arrangement or reconstruction entity operates.[3]
would be an appropriate alternative to a
company liquidation.[2] H CURRENT DEVELOPMENTS

c) Outline the appropriate accounting treatment 1. Environmental and social reporting

relating to schemes of arrangement and
reconstructions.[2] a) Appraise the impact of environmental, social,
and ethical factors on performance
F IMPLICATIONS OF CHANGES IN measurement.[3]
ACCOUNTING REGULATION ON FINANCIAL
REPORTING b) Evaluate current reporting requirements in the
area including the development of integrated
1. The effect of changes in accounting standards reporting.[3]
on accounting systems
c) Discuss why entities might include disclosures
a) Apply and discuss the accounting implications relating to the environment and society.[3]
of the first time adoption of a body of new
accounting standards.[3] 2. Convergence between national and
international reporting standards
2. Proposed changes to accounting standards
a) Evaluate the implications of worldwide
a) Identify issues and deficiencies which have led convergence with International Financial
to a proposed change to an accounting Reporting Standards.[3]
standard.[2]
b) Discuss the influence of national regulators on
G THE APPRAISAL OF FINANCIAL international financial reporting.[2]
PERFORMANCE AND POSITION OF ENTITIES
3. Current reporting issues
1. The creation of suitable accounting policies
a) Discuss current issues in corporate reporting,
a) Develop accounting policies for an entity which including:
meet the entity’s reporting requirements.[3] i. recent IFRSs
ii. practice and regulatory issues
b) Identify accounting treatments adopted in iii. proposed changes to IFRS
financial statements and assess their suitability iv. problems with extant standards [3]
and acceptability.[3]

2. Analysis and interpretation of financial

information and measurement of performance

a) Select and calculate relevant indicators of

financial and non-financial performance.[3]

b) Identify and evaluate significant features and

issues in financial statements.[3]

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NOTE OF SIGNIFICANT CHANGES TO STUDY
GUIDE PAPER P2 UK

RATIONALE FOR CHANGES

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

The main areas that have been added to the syllabus are shown in Table 1 below:

Table 1 - Additions to P2 (UK)

Section and subject area Syllabus content
B4 Leases New learning outcomes (a)-(e) have been inserted to
reflect the issue of IFRS 16 Leases. There has been
no change to learning outcome B4(f) [formally B4 (b)]

The main areas that have been deleted from the syllabus are shown in Table 2 below:
Table 2 – Deletions from P2 (UK)
Section and subject area Syllabus content
B4 Leases Apply and discuss the classification of leases and
accounting for leases by lessors and lessees.

There have been no other amends to the P2 (UK) syllabus

The syllabus must be read in conjunction with the Examinable Documents list.

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