CA (Chartered Accountancy) Intermediate: Advanced Accounting Syllabus

Intermediate: Advanced Accounting syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Intermediate: Advanced Accounting in CA (Chartered Accountancy), not a summary of it.

1. 1

   Accounting Standards Framework

   4 topics

   • Process of Formulation and Convergence with IFRS
   • AS 1, AS 2 and AS 3
     • Disclosure of accounting policies and inventory valuation
     • Cash flow statements
   • AS 10, AS 11 and AS 12
     • Property, plant and equipment
     • Foreign exchange and government grants
   • AS 13, AS 16 and AS 17
     • Investments, borrowing costs and segment reporting
2. 2

   Revenue, Income Taxes and Other Standards

   4 topics

   • AS 7, AS 9 and AS 19
     • Construction contracts and revenue recognition
     • Accounting for leases
   • AS 20, AS 22 and AS 24
     • Earnings per share and deferred taxes
   • AS 4, AS 5 and AS 18
     • Events after balance sheet date and related party disclosures
   • AS 14, AS 26, AS 28 and AS 29
     • Amalgamation, intangible assets and impairment
     • Provisions, contingent liabilities and contingent assets
3. 3

   Company Accounts

   5 topics

   • Preparation of Financial Statements under Schedule III
   • Managerial Remuneration and Profit Determination
   • Buy-back of Securities and Bonus Issue
   • Internal Reconstruction
   • Liquidation of Companies
4. 4

   Group Accounts and Specialised Entities

   4 topics

   • Consolidated Financial Statements (AS 21)
     • Minority interest and goodwill on consolidation
   • Amalgamation of Companies
     • Pooling of interests and purchase method
   • Accounting for Branches including Foreign Branches
   • Investment Accounts and Insurance Claims

Intermediate: Advanced Accounting flashcards for CA (Chartered Accountancy)

19 of 93 cards from the Intermediate: Advanced Accounting deck — real questions with worked answers.

1. What is the objective of convergence with IFRS in India, and what is the resulting set of standards called?

   Convergence means aligning Indian Accounting Standards with IFRS to achieve global comparability and transparency, rather than wholesale adoption. The converged standards are called Ind AS (Indian Accounting Standards), notified under the Companies (Indian Accounting Standards) Rules, 2015.

2. Who formulates Accounting Standards in India and what is the role of NFRA?

   The Accounting Standards Board (ASB) of the ICAI formulates standards. They are recommended to NACAS/NFRA (National Financial Reporting Authority), which advises the Central Government, and are then notified by the Ministry of Corporate Affairs under the Companies Act, 2013.

3. What does AS 1 'Disclosure of Accounting Policies' identify as the three fundamental accounting assumptions?

   Going Concern, Consistency, and Accrual. If they are followed, no specific disclosure is required; if any is not followed, the fact must be disclosed.

4. Under AS 1, what are the major considerations governing the selection of accounting policies?

   Prudence, Substance over Form, and Materiality.

5. Under AS 2 'Valuation of Inventories', at what value should inventories be carried in the balance sheet?

   At the lower of cost and net realisable value (NRV).

6. Define Net Realisable Value (NRV) under AS 2.

   NRV is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

7. Which cost formulas does AS 2 permit for assigning cost to inventory, and which is prohibited?

   Permitted: Specific Identification (for non-interchangeable items), FIFO, and Weighted Average Cost. LIFO is not permitted under AS 2.

8. Under AS 2, what items are specifically excluded from the cost of inventories?

   Abnormal waste of materials/labour, storage costs (unless necessary in the production process), administrative overheads not contributing to bringing inventories to present location/condition, and selling and distribution costs.

9. What three classifications of activities does AS 3 'Cash Flow Statements' require?

   Operating activities, Investing activities, and Financing activities.

10. Under AS 3, what two methods can be used to report cash flows from operating activities?

    The Direct method (gross receipts and payments disclosed) and the Indirect method (net profit/loss adjusted for non-cash items and changes in working capital).

11. Under AS 3, how are interest and dividends classified for a financial enterprise versus other enterprises?

    For a financial enterprise, interest and dividends paid/received are classified as operating activities. For other enterprises, interest and dividends received are investing, while interest and dividends paid are financing activities.

12. Under AS 10 'Property, Plant and Equipment', what is the recognition criterion for an item of PPE?

    An item is recognised as PPE only if it is probable that future economic benefits associated with the item will flow to the enterprise, and the cost of the item can be measured reliably.

13. List the main components of the cost of an item of PPE under AS 10.

    Purchase price (including import duties and non-refundable taxes, net of trade discounts/rebates), directly attributable costs of bringing the asset to working condition, and the initial estimate of dismantling, removal and site restoration costs (decommissioning).

14. Under AS 10, what are the two measurement models permitted after initial recognition?

    The Cost model (cost less accumulated depreciation and impairment losses) and the Revaluation model (fair value at revaluation date less subsequent accumulated depreciation and impairment).

15. Under AS 11, define a 'monetary item' and give the rule for translating monetary items at the balance sheet date.

    Monetary items are money held and assets/liabilities to be received or paid in fixed/determinable amounts of money (e.g., cash, receivables, payables). They are reported at the closing rate at each balance sheet date.

16. Under AS 11, how are non-monetary items carried at historical cost translated?

    Non-monetary items carried at historical cost are reported using the exchange rate at the date of the transaction (they are not retranslated at the closing rate).

17. Under AS 11, how are exchange differences arising on the settlement or restatement of monetary items generally treated?

    They are recognised as income or expense in the period in which they arise (charged to the Statement of Profit and Loss).

18. Under AS 11, what is the difference between an integral foreign operation and a non-integral foreign operation for translation?

    An integral foreign operation is translated as if the enterprise's own transactions (same rules as the reporting enterprise). A non-integral foreign operation's assets and liabilities are translated at the closing rate, income/expenses at transaction (or average) rates, and resulting differences accumulate in a Foreign Currency Translation Reserve until disposal.

19. Under AS 12 'Government Grants', what are the two broad approaches to accounting for government grants?

    The Capital approach (grant credited to shareholders'/capital reserve) and the Income approach (grant taken to income over relevant periods). AS 12 generally favours the income approach, matching grants with related costs.

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