Paper 1 :
About Financial Reporting
Financial reporting is the essence of accounting in any kind of organisation. It essentially covers various areas on the disclosure of financial information to the various stakeholders about the financial performance and financial position of the organisation. This financial information forms the basis for many economic decisions like investing, lending, providing credit etc.
Being an aspirant of the Chartered Accountancy profession, achieving expertise in the field of various reporting standards is a necessity as well as a great opportunity.You would have studied fundamentals of accounts in CA foundation level, accounting and advanced accounting at intermediate level. These were aimed at providing working knowledge of these concepts. At the CA Final level, you are expected to obtain proficiency in various financial reporting standards, Indian as well as international.You are also expected to develop skills and knowledge to solve complex areas in the field of financial reporting by practically applying various accounting policies.
The topics covered in the Financial Reporting paper at the CA final Level is,
- Accounting standards which were not covered in intermediate level are covered here such as AS 15, AS 23, AS 27, etc.
- Guidance notes on topics such as derivatives, Preparation of carve out financial statement etc. However, the main focus at the CA Final level is on Indian Accounting standards (Ind AS) because of its relevance in the context of Convergence to International reporting standards(IFRS).
- About 70-80% of the chapters covered at the CA final level is Ind AS covering various elements of financial statements.
- The remaining part of the paper covers emerging trends in the field of accounting and financial reporting such as carbon credits, accounting for e-commerce, integrated reporting, etc.
The best approach to study the Financial Reporting paper is,
- Start early: Considering the volume of syllabus of the paper, it is highly recommended to start your preparation much earlier to exams (at least 14-16 months before).
- 3 Cs Concepts, Consistency and continuity: There is big difference between knowledge and application. Try to understand every topic from its substance and concepts and not just about remembering it. Also, it is better to study for a few hours daily rather than studying for many hours during the last few days.
- Study content: There are many books available in the market as well as various books recommended by ICAI. However, from the point of view of exam and to conceptually understand the entire syllabus, study materials given by ICAI is highly recommended. Cover the ICAI syllabus in detail and don’t indulge in any selective coverage of syllabus.
- Practice, Practice and practice: Financial reporting being a application paper, more practice is required than just reading the theory. Also, try to understand the concepts from different points of view. It is more effective to solve one problem in 10 different ways than solving 10 problems of same kind.
- Updates: Recently Financial reporting has become a very dynamic subject. This is like a treadmill. To stay where you are, you must keep running. Keep visiting the ICAI website for notifications and amendments applicable for your exam.