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ICAP CAF CAF-1: Financial Accounting and Reporting Syllabus
Every chapter and topic of CAF-1: Financial Accounting and Reporting examined in ICAP CAF — 7 chapters, 19 topics, plus 63 flashcards written against it.
CAF-1: Financial Accounting and Reporting syllabus — full chapter and topic list
Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for CAF-1: Financial Accounting and Reporting in ICAP CAF, not a summary of it.
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Conceptual and Regulatory Framework
2 topics- Conceptual framework for financial reporting
- Regulatory system and standard setting
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Statement of Financial Position and Profit or Loss
4 topics- IAS 1 Presentation of Financial Statements
- Preparation of statement of financial position
- Preparation of statement of profit or loss
- Financial statements for non-profit organizations
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Statement of Changes in Equity and Cash Flows
3 topics- Statement of changes in equity
- IAS 7 Statement of Cash Flows
- IAS 8 Accounting policies, estimates and errors
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Interpretation of Financial Statements
3 topics- Ratio analysis and benchmarking
- Assessment of performance and financial position
- Window dressing of financial statements
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Property, Plant and Equipment
3 topics- IAS 16 recognition and measurement
- IAS 23 Borrowing Costs
- IAS 36 Impairment of Assets
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Investment Property and Government Grants
2 topics- IAS 40 Investment Property
- IAS 20 Government grants and assistance
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Agriculture
2 topics- IAS 41 biological assets and agricultural produce
- Government grants related to biological assets
CAF-1: Financial Accounting and Reporting flashcards for ICAP CAF
24 of 63 cards from the CAF-1: Financial Accounting and Reporting deck — real questions with worked answers.
What is the objective of general purpose financial reporting under the IASB Conceptual Framework?
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 equity, providing loans).
Name the two fundamental qualitative characteristics of useful financial information in the Conceptual Framework.
Relevance and faithful representation.
List the four enhancing qualitative characteristics of useful financial information.
Comparability, verifiability, timeliness and understandability.
Per the Conceptual Framework, for information to be a faithful representation it should ideally have which three attributes?
It should be complete, neutral and free from error.
Define an 'asset' as per the 2018 Conceptual Framework.
A present economic resource controlled by the entity as a result of past events. An economic resource is a right that has the potential to produce economic benefits.
Define a 'liability' as per the 2018 Conceptual Framework.
A present obligation of the entity to transfer an economic resource as a result of past events.
What are the two recognition criteria implied by the Conceptual Framework for recognising an element?
Recognition is appropriate if it provides users with relevant information and a faithful representation of the item (and the benefits of doing so outweigh the costs).
Name the four measurement bases discussed in the Conceptual Framework.
Historical cost, and three current value bases: fair value, value in use (for assets)/fulfilment value (for liabilities), and current cost.
Which body issues IFRS Standards and which body issues IFRS Interpretations?
The International Accounting Standards Board (IASB) issues IFRS/IAS; the IFRS Interpretations Committee (IFRIC) issues interpretations. Both operate under the IFRS Foundation, overseen by the Monitoring Board.
In Pakistan, which body adopts and notifies IFRS for application, and under which law are companies required to prepare financial statements?
The Institute of Chartered Accountants of Pakistan (ICAP) recommends adoption and the SECP notifies IFRS; companies prepare financial statements under the Companies Act, 2017.
Under IAS 1, what is a complete set of financial statements?
Statement of financial position; statement of profit or loss and other comprehensive income; statement of changes in equity; statement of cash flows; notes (accounting policies and explanatory info); and comparative information. (Plus an opening SOFP when a retrospective restatement occurs.)
What are the underlying assumptions/principles emphasised by IAS 1 in preparing financial statements?
Going concern, accrual basis of accounting, materiality and aggregation, offsetting (generally not permitted), frequency of reporting, comparative information, and consistency of presentation.
Under IAS 1, when is an asset classified as current?
When it is expected to be realised/sold/consumed in the normal operating cycle, is held primarily for trading, is expected to be realised within 12 months after the reporting period, or is cash/cash equivalent (not restricted).
Under IAS 1, when is a liability classified as current?
When expected to be settled in the normal operating cycle, held primarily for trading, due to be settled within 12 months after the reporting period, or the entity has no unconditional right to defer settlement beyond 12 months.
What is the difference between profit or loss and other comprehensive income (OCI)?
Profit or loss includes all income/expense items not required to be recognised in OCI. OCI comprises items not recognised in P&L as required/permitted by IFRS, e.g. revaluation surplus (IAS 16), remeasurements of defined benefit plans, and certain FX/financial instrument gains.
Give two examples of OCI items that may be reclassified to profit or loss and two that may not.
May be reclassified: exchange differences on foreign operations, cash flow hedge gains/losses. Not reclassified: revaluation surplus on PPE (IAS 16), remeasurements of defined benefit plans, gains on equity investments designated at FVOCI.
What is the basic format/order of a statement of financial position presenting net assets?
Non-current assets + current assets = total assets; total assets less total liabilities = net assets; net assets equals equity (share capital + reserves + retained earnings).
In a single statement of profit or loss by function, list the typical line items down to profit for the year.
Revenue, less cost of sales = gross profit; less distribution costs and administrative expenses; +/- other income/expenses; = operating profit; less finance costs; = profit before tax; less income tax expense; = profit for the year.
What is the difference between presenting expenses 'by nature' and 'by function'?
By nature groups expenses by type (e.g. raw materials, employee benefits, depreciation). By function groups expenses by purpose (e.g. cost of sales, distribution, administrative). If by function, IAS 1 requires additional disclosure of nature (e.g. depreciation, employee costs).
What is the equivalent of 'capital' and 'profit or loss' for a non-profit organisation's financial statements?
Capital is called the 'accumulated fund' (or general fund); the profit or loss equivalent is the 'surplus or deficit' shown in the income and expenditure account.
What is the difference between a Receipts and Payments Account and an Income and Expenditure Account for an NPO?
Receipts and Payments is a cash summary (like a cash book, includes capital and revenue, ignores accruals). Income and Expenditure is prepared on accruals basis, includes only revenue items, and shows surplus/deficit (like a P&L).
For an NPO, how is a subscription-based source treated: how do you compute subscription income for the period?
Subscription income = subscriptions received in cash, add closing subscriptions in arrears, less opening arrears, add opening advance subscriptions, less closing advance subscriptions (adjusting cash to accruals basis).
What columns/components make up a Statement of Changes in Equity?
Columns for each equity component (share capital, share premium, revaluation surplus, other reserves, retained earnings, total). Rows: opening balance, prior period adjustments/restated balance, total comprehensive income (profit + OCI), share issues, dividends, transfers between reserves, closing balance.
Where are dividends paid and share issues reported in the financial statements?
Dividends declared/paid and shares issued are transactions with owners and are reported in the Statement of Changes in Equity (not in profit or loss).
See more CAF-1: Financial Accounting and Reporting flashcards →
Planning CAF-1: Financial Accounting and Reporting for ICAP CAF
CAF-1: Financial Accounting and Reporting is about 11% of the ICAP CAF syllabus by topic count — 19 of 173 topics, spread over 7 chapters. At roughly 45 minutes per topic plus 12 minutes per sub-topic, a first pass runs to about 15 hours.
The heaviest chapters are Statement of Financial Position and Profit or Loss (4 topics), Statement of Changes in Equity and Cash Flows (3 topics), Interpretation of Financial Statements (3 topics) . Front-load those while your energy is high; the short chapters are better revision filler later.
Work top-down: read the chapter, then tick topics off individually rather than marking the whole chapter done. Sub-topics are where silent gaps hide.
CAF-1: Financial Accounting and Reporting (ICAP CAF) FAQ
What is in the ICAP CAF CAF-1: Financial Accounting and Reporting syllabus?
CAF-1: Financial Accounting and Reporting is split into 7 chapters — Conceptual and Regulatory Framework, Statement of Financial Position and Profit or Loss, Statement of Changes in Equity and Cash Flows, Interpretation of Financial Statements, Property, Plant and Equipment and Investment Property and Government Grants, and 1 more, containing 19 topics and 0 sub-topics in total.
How is CAF-1: Financial Accounting and Reporting structured in the ICAP CAF syllabus?
7 chapters. CAF-1: Financial Accounting and Reporting accounts for about 11% of the topics in the whole ICAP CAF syllabus (19 of 173).
How long should I spend on CAF-1: Financial Accounting and Reporting for ICAP CAF?
Budget around 15 hours for a first pass through CAF-1: Financial Accounting and Reporting — about 45 minutes per topic plus 12 minutes per sub-topic across its 19 topics. Add revision cycles on top.
Are there flashcards for ICAP CAF CAF-1: Financial Accounting and Reporting?
Yes — a 63-card CAF-1: Financial Accounting and Reporting deck. Sample cards are printed on this page, and the full deck is free in the Examius app with spaced repetition scheduling.