ICAP CFAP CFAP-1: Advanced Corporate Reporting Syllabus

CFAP-1: Advanced 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 CFAP-1: Advanced Corporate Reporting in ICAP CFAP, not a summary of it.

1. 1

   Financial Reporting for Groups

   7 topics

   • Consolidated Financial Statements (IFRS 10)
   • Business Combinations (IFRS 3)
   • Separate Financial Statements (IAS 27)
   • Investments in Associates and Joint Ventures (IAS 28)
   • Joint Arrangements & Disclosure of Interests (IFRS 11 & 12)
   • Effects of Changes in Foreign Exchange Rates (IAS 21)
   • Analysis and Interpretation of General Purpose Financial Reports
2. 2

   Financial Instruments

   3 topics

   • Recognition and Measurement (IFRS 9)
   • Presentation (IAS 32)
   • Disclosures (IFRS 7)
3. 3

   Revenue, Leases and Income Taxes

   3 topics

   • Revenue from Contracts with Customers (IFRS 15)
   • Leases (IFRS 16)
   • Income Taxes (IAS 12)
4. 4

   Other Essential Transactions and Ethics

   7 topics

   • Impairment of Assets (IAS 36)
   • Employee Benefits (IAS 19 & IFRIC 14)
   • Share-based Payment (IFRS 2)
   • Fair Value Measurement (IFRS 13)
   • Interim Financial Reporting (IAS 34 & IFRIC 10)
   • Related Party Disclosures (IAS 24)
   • Code of Ethics for Professional Accountants in Business
5. 5

   Sector-Specific Financial Reporting

   4 topics

   • Banks
   • Mutual Funds
   • Insurance Companies and Insurance Contracts (IFRS 17)
   • Fourth and Fifth Schedules of the Companies Act, 2017
6. 6

   Specialized and Emerging Reporting Areas

   8 topics

   • First-time Adoption of IFRS (IFRS 1)
   • Exploration for and Evaluation of Mineral Resources (IFRS 6)
   • Regulatory Deferral Accounts (IFRS 14)
   • Financial Reporting in Hyperinflationary Economies (IAS 29 & IFRIC 7)
   • IFRS for SMEs
   • Accounting and Reporting by Retirement Benefit Plans (IAS 26)
   • Islamic Accounting Standards issued by ICAP
   • Digital Assets and Cryptocurrency Guidance
7. 7

   Public Sector Financial Reporting

   3 topics

   • Conceptual Framework for Public Sector Reporting (IPSAS)
   • Presentation of Financial Statements under IPSAS
   • Financial Reporting under the Cash Basis of Accounting

CFAP-1: Advanced Corporate Reporting flashcards for ICAP CFAP

19 of 57 cards from the CFAP-1: Advanced Corporate Reporting deck — real questions with worked answers.

1. Under IFRS 10, what are the three elements of control that an investor must have over an investee?

   (1) Power over the investee (existing rights giving ability to direct relevant activities), (2) Exposure or rights to variable returns from involvement, and (3) The ability to use power to affect the amount of those returns.

2. How is goodwill calculated in a business combination under IFRS 3?

   Goodwill = Consideration transferred + Non-controlling interest + Fair value of any previously held equity interest LESS the fair value of identifiable net assets acquired.

3. Under IFRS 3, what are the two methods of measuring non-controlling interest (NCI) at acquisition?

   (1) At fair value (full goodwill method), or (2) At the NCI's proportionate share of the acquiree's identifiable net assets (partial goodwill method).

4. 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 over consideration is recognised as a gain in profit or loss on the acquisition date.

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

   They are expensed in the period incurred, not capitalised as part of the cost of the business combination (except costs of issuing debt or equity, which follow IFRS 9 / IAS 32).

6. What is the accounting treatment for contingent consideration classified as a liability under IFRS 3?

   It is measured at fair value at acquisition; subsequent changes in fair value are recognised in profit or loss (not adjusted against goodwill), unless it is classified as equity (then not remeasured).

7. Under IAS 27, how are investments in subsidiaries, associates and joint ventures accounted for in separate financial statements?

   At cost, or in accordance with IFRS 9 (fair value), or using the equity method per IAS 28 — the entity chooses a policy and applies it to each category of investment.

8. Define an associate under IAS 28.

   An entity over which the investor has significant influence — the power to participate in the financial and operating policy decisions of the investee, but NOT control or joint control.

9. What level of shareholding is presumed to give significant influence under IAS 28?

   Holding 20% or more (but less than 50%) of the voting power is presumed to give significant influence, unless clearly demonstrated otherwise. Below 20% is presumed not to, unless influence can be demonstrated.

10. Describe the equity method of accounting for an associate under IAS 28.

    The investment is initially recognised at cost and subsequently adjusted for the investor's share of post-acquisition profit or loss (in P&L), share of OCI (in OCI), and reduced by dividends received.

11. Under IAS 28, how are unrealised profits on transactions between an investor and its associate eliminated?

    The investor's share of unrealised profits/losses on upstream and downstream transactions is eliminated to the extent of the investor's interest in the associate.

12. Under IFRS 11, what are the two types of joint arrangements and how are they distinguished?

    Joint operation (parties have rights to assets and obligations for liabilities) and joint venture (parties have rights to the net assets). Classification depends on structure, legal form, contractual terms, and other facts.

13. 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 (not proportionate consolidation).

14. 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 jointly held assets, jointly incurred liabilities, joint revenue and joint expenses.

15. What is the purpose of IFRS 12?

    To require disclosure of information that enables users to evaluate the nature of, and risks associated with, interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities, and the effects of those interests on financial statements.

16. Under IAS 21, distinguish between functional currency and presentation currency.

    Functional currency is the currency of the primary economic environment in which the entity operates. Presentation currency is the currency in which the financial statements are presented (can be any currency).

17. Under IAS 21, how are monetary and non-monetary items translated at the reporting date?

    Monetary items at the closing (year-end) rate; non-monetary items at historical cost use the rate at transaction date; non-monetary items at fair value use the rate when fair value was measured.

18. Under IAS 21, how is a foreign operation's results and financial position translated into the presentation currency?

    Assets and liabilities at the closing rate; income and expenses at exchange rates at the dates of transactions (average rate as approximation); resulting exchange differences recognised in OCI.

19. Under IAS 21, what happens to the cumulative exchange differences in OCI when a foreign operation is disposed of?

    The cumulative amount of exchange differences relating to that foreign operation, accumulated in equity, is reclassified from equity to profit or loss as part of the gain or loss on disposal.

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