Association of Chartered Certified Accountants (ACCA) Strategic Business Reporting (SBR) Syllabus

Strategic Business Reporting (SBR) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Strategic Business Reporting (SBR) in Association of Chartered Certified Accountants (ACCA), not a summary of it.

1. 1

   Fundamental Ethical and Professional Principles

   3 topics

   • Professional and ethical duties
     • Ethical principles for the accountant
     • Conflicts of interest and ethical dilemmas
   • The Conceptual Framework
     • Measurement bases and recognition
     • Application to reporting issues
   • Judgement in financial reporting
     • Substance over form
     • Faithful representation in practice
2. 2

   Reporting Financial Performance of Entities

   5 topics

   • Revenue, provisions and events
     • IFRS 15 complex contracts
     • IAS 37 and onerous contracts
   • Non-current assets
     • Impairment and revaluation
     • Leases under IFRS 16
   • Employee benefits and share-based payment
     • IAS 19 defined benefit plans
     • IFRS 2 equity-settled schemes
   • Financial instruments
     • IFRS 9 classification, measurement and hedging
     • Expected credit losses
   • Income taxes and foreign currency
     • IAS 12 deferred tax
     • IAS 21 foreign transactions
3. 3

   Groups and Consolidated Financial Statements

   4 topics

   • Complex group structures
     • Sub-subsidiaries and indirect holdings
     • Step acquisitions and disposals
   • Changes in group structure
     • Loss of control and partial disposals
   • Foreign subsidiaries and consolidated cash flows
     • Translation of foreign operations
     • Group statement of cash flows
   • Associates and joint arrangements
     • IFRS 11 and IAS 28 application
4. 4

   Specialised Entities and Transactions

   3 topics

   • Reporting for specialised entities
     • Not-for-profit and public sector
     • Small and medium entities
   • Reporting requirements of SMEs
     • IFRS for SMEs differences
   • Other reporting issues
     • Related party disclosures (IAS 24)
     • Segment reporting (IFRS 8)
5. 5

   Interpretation, Current Issues and Developments

   3 topics

   • Analysis and interpretation for stakeholders
     • Impact of accounting choices on ratios
     • Creative accounting and earnings management
   • Current developments
     • Sustainability and integrated reporting
     • Management commentary
   • Critical appraisal of reporting
     • Discussion of proposed and revised standards

Strategic Business Reporting (SBR) flashcards for Association of Chartered Certified Accountants (ACCA)

19 of 52 cards from the Strategic Business Reporting (SBR) deck — real questions with worked answers.

1. What are the five fundamental principles of the ACCA/IESBA Code of Ethics that an accountant must comply with?

   Integrity, Objectivity, Professional competence and due care, Confidentiality, and Professional behaviour.

2. In the IESBA conceptual framework approach to ethics, what are the five categories of threat to compliance with the fundamental principles?

   Self-interest, Self-review, Advocacy, Familiarity, and Intimidation threats.

3. What is the difference between the 'compliance/rules-based' and 'principles-based' approaches to ethics, and which does the ACCA Code adopt?

   A rules-based approach prescribes specific rules for every situation; a principles-based (framework) approach sets fundamental principles and requires the accountant to identify, evaluate and address threats using professional judgement. ACCA adopts the principles-based (conceptual framework) approach.

4. According to the IASB Conceptual Framework, what is the objective of general purpose financial reporting?

   To provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity (e.g. buying, selling, holding equity/debt, providing or settling loans).

5. Name the two fundamental qualitative characteristics of useful financial information in the Conceptual Framework.

   Relevance (including materiality) and Faithful representation (complete, neutral and free from error).

6. List the four enhancing qualitative characteristics of useful financial information.

   Comparability, Verifiability, Timeliness, and Understandability.

7. Give the Conceptual Framework definitions of an asset and a liability (2018 Framework).

   An asset is a present economic resource controlled by the entity as a result of past events, where an economic resource is a right that has the potential to produce economic benefits. A liability is a present obligation of the entity to transfer an economic resource as a result of past events.

8. What are the two recognition criteria for an element in the 2018 Conceptual Framework?

   An item is recognised if recognition provides users with (1) relevant information and (2) a faithful representation of the asset/liability and any resulting income, expenses or changes in equity (subject to cost constraint).

9. Distinguish the two measurement bases identified in the Conceptual Framework.

   Historical cost (reflects the price of the transaction that gave rise to the item) and Current value, which includes fair value, value in use/fulfilment value, and current cost.

10. What does it mean to say that management exercises 'judgement' in financial reporting, and why is it inevitable under IFRS?

    Judgement is management's application of estimates, assumptions and selection of accounting policies where standards are principles-based or require estimation (e.g. useful lives, provisions, fair values). It is inevitable because IFRS cannot specify outcomes for every transaction and many measurements rely on uncertain future events.

11. Under IAS 8, what is the difference between a change in accounting policy and a change in accounting estimate, and how is each accounted for?

    A change in accounting policy is applied retrospectively (restate comparatives as if the new policy always applied). A change in accounting estimate is applied prospectively (in the current and, if relevant, future periods). If unclear, a change is treated as a change in estimate.

12. State the IAS 8 hierarchy management follows when no IFRS specifically applies to a transaction.

    (1) Apply requirements in IFRS dealing with similar/related issues; (2) use the Conceptual Framework definitions, recognition criteria and measurement concepts; and management may also consider pronouncements of other standard-setters and accepted industry practice, provided they don't conflict with (1) and (2).

13. What are the five steps of the IFRS 15 revenue recognition model?

    (1) Identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; (5) recognise revenue when (or as) each performance obligation is satisfied.

14. Under IFRS 15, when is revenue recognised over time rather than at a point in time?

    Over time if any one criterion is met: (a) the customer simultaneously receives and consumes the benefits as the entity performs; (b) the entity's performance creates/enhances an asset the customer controls; or (c) the asset has no alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

15. Under IAS 37, what three conditions must be met to recognise a provision?

    (1) A present obligation (legal or constructive) exists as a result of a past event; (2) it is probable (more likely than not) that an outflow of economic benefits will be required; and (3) a reliable estimate of the amount can be made.

16. How does IAS 37 distinguish a provision, a contingent liability, and a contingent asset?

    A provision is recognised (probable outflow, reliable estimate). A contingent liability is a possible obligation or a present obligation not recognised (outflow not probable or not reliably measurable) — disclosed only. A contingent asset is a possible asset from past events — disclosed only when an inflow is probable, recognised only when virtually certain.

17. Under IAS 10, distinguish adjusting and non-adjusting events after the reporting period.

    Adjusting events provide evidence of conditions that existed at the reporting date (adjust the financial statements). Non-adjusting events are indicative of conditions arising after the reporting date (do not adjust; disclose if material). Both are events between the reporting date and the date the financial statements are authorised for issue.

18. How is property, plant and equipment initially measured under IAS 16, and what is included in cost?

    At cost, comprising purchase price (net of trade discounts) plus import duties and non-refundable taxes, directly attributable costs of bringing the asset to working condition and location, and the initial estimate of dismantling/restoration costs (decommissioning provision).

19. Compare the cost model and revaluation model for PPE under IAS 16, including where revaluation gains and losses go.

    Cost model: carry at cost less accumulated depreciation and impairment. Revaluation model: carry at fair value at revaluation date less subsequent depreciation/impairment. Revaluation gains go to OCI (revaluation surplus) unless reversing a prior loss in P&L; revaluation losses go to P&L unless reversing a prior surplus in OCI.

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