ICAP CA Corporate Reporting Syllabus

Corporate Reporting syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Corporate Reporting in ICAP CA, not a summary of it.

1. 1

   Consolidated Financial Statements

   3 topics

   • IFRS 10 Consolidated financial statements
   • IFRS 3 Business combinations and goodwill
   • Consolidated statement of cash flows
2. 2

   Investments in Associates and Joint Arrangements

   3 topics

   • IAS 28 Investments in associates
   • IFRS 11 Joint arrangements
   • Equity method of accounting
3. 3

   Financial Instruments

   3 topics

   • IFRS 9 classification and measurement
   • IAS 32 Presentation
   • IFRS 7 Disclosures
4. 4

   Employee Benefits and Share-Based Payment

   2 topics

   • IAS 19 Employee benefits
   • IFRS 2 Share-based payment
5. 5

   Specialised Reporting Areas

   4 topics

   • IAS 21 Effects of changes in foreign exchange rates
   • IFRS 5 Non-current assets held for sale and discontinued operations
   • IFRS 8 Operating segments
   • IAS 33 Earnings per share
6. 6

   Interpretation and Analysis

   2 topics

   • Ratio analysis and performance evaluation
   • Limitations of financial statements
7. 7

   Ethics in Corporate Reporting

   2 topics

   • ICAP Code of Ethics for accountants
   • Professional and ethical reporting judgements

Corporate Reporting flashcards for ICAP CA

21 of 52 cards from the Corporate Reporting deck — real questions with worked answers.

1. Under IFRS 10, what single basis determines whether one entity controls another (and must consolidate it)?

   Control. An investor controls an investee when it has all three: (1) power over the investee, (2) exposure/rights to variable returns from its involvement, and (3) the ability to use its power to affect those returns.

2. IFRS 10 defines 'power' over an investee as what?

   Existing rights that give the current ability to direct the relevant activities (the activities that significantly affect the investee's returns), typically arising from voting rights or contractual arrangements.

3. In consolidation under IFRS 10, what is the basic treatment of intra-group balances and transactions?

   They are eliminated in full — intra-group receivables/payables, sales/purchases, and unrealised profit in closing inventory or non-current assets are all removed on consolidation.

4. What are the two methods permitted by IFRS 3 to measure non-controlling interest (NCI) at the acquisition date?

   (1) Fair value (full goodwill method), or (2) the NCI's proportionate share of the acquiree's identifiable net assets (partial goodwill method). The choice is made transaction by transaction.

5. State the IFRS 3 formula for goodwill arising on a business combination.

   Goodwill = Consideration transferred + NCI (at FV or proportionate share) + FV of any previously held equity interest − FV of identifiable net assets acquired.

6. How is a bargain purchase (negative goodwill) treated under IFRS 3?

   After reassessing the identification and measurement of net assets and consideration, any remaining excess of net assets acquired over consideration is recognised immediately as a gain in profit or loss.

7. Under IFRS 3, how are acquisition-related costs (e.g. legal, advisory fees) accounted for?

   They are expensed in the period incurred and are NOT part of the cost of the business combination (except costs to issue debt/equity, which follow IFRS 9 / IAS 32).

8. How is contingent consideration measured and subsequently accounted for under IFRS 3?

   Measured at fair value at acquisition date and included in consideration. If classified as equity it is not remeasured; if a financial liability it is remeasured to fair value through profit or loss.

9. What is the IFRS 3 'measurement period' and how long can it last?

   The period after acquisition during which provisional amounts may be adjusted for new information about facts existing at the acquisition date. It cannot exceed one year from the acquisition date.

10. In a consolidated statement of cash flows, how is a dividend received from an associate (equity method) presented?

    As a cash inflow, usually under investing activities (or operating, by policy). The share of associate's profit is a non-cash item removed when reconciling profit to operating cash flows.

11. How is the cash effect of acquiring a subsidiary shown in the consolidated statement of cash flows?

    Under investing activities as 'cash paid to acquire subsidiary, net of cash and cash equivalents acquired' — i.e. consideration paid in cash less the cash balances of the subsidiary acquired.

12. In a consolidated cash flow statement, how are dividends paid to non-controlling interests presented?

    As a cash outflow under financing activities, separately from dividends paid to owners of the parent.

13. Under IAS 28, what is 'significant influence' and what shareholding is presumed to give it?

    The power to participate in the financial and operating policy decisions of the investee, but not control or joint control. It is presumed (rebuttably) when the investor holds 20% or more of the voting power.

14. Under the equity method (IAS 28), how is the investment in an associate measured after initial recognition?

    At cost plus the investor's share of post-acquisition profits/losses and other comprehensive income, less dividends received from the associate, adjusted for impairment.

15. How are unrealised profits on transactions between an investor and its associate treated under IAS 28?

    Eliminated only to the extent of the investor's interest in the associate (its percentage share), unlike the full elimination required for subsidiaries.

16. Under IAS 28, what happens when an investor's share of an associate's losses equals or exceeds its interest?

    The investor stops recognising further losses; the carrying amount is reduced to nil. Additional losses are recognised only to the extent the investor has incurred legal/constructive obligations or made payments on the associate's behalf.

17. IFRS 11 classifies joint arrangements into which two types, and on what basis?

    Joint operations and joint ventures, classified based on the rights and obligations of the parties — determined by the structure, legal form, contractual terms, and other facts.

18. How does a joint venturer account for its interest in a joint venture under IFRS 11?

    Using the equity method in accordance with IAS 28 (in consolidated financial statements).

19. How does a joint operator account for its interest in a joint operation under IFRS 11?

    It recognises its own assets, liabilities, revenue and expenses, plus its share of any jointly held assets, jointly incurred liabilities, and jointly earned revenue/incurred expenses.

20. Under IFRS 11, what is the key difference between a joint operation and a joint venture?

    In a joint operation the parties have rights to the assets and obligations for the liabilities; in a joint venture the parties have rights only to the net assets of the arrangement.

21. Under IFRS 9, what are the three classification categories for financial assets?

    (1) Amortised cost, (2) Fair value through other comprehensive income (FVOCI), and (3) Fair value through profit or loss (FVTPL).

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