C2 - Student Guidance Notes

Student Guidance Notes

September 2004

Guide C02

Guidance notes for students planning to sit C02 Fundamentals of Financial Accounting of the new 2006 CIMA Certificate in Business Accounting syllabus This guide outlines the issues relating to transition from C02 Financial Accounting Fundamentals of the 2000 syllabus to CO2 Fundamentals of Financial Accounting of the new 2006 CIMA Certificate in Business Accounting syllabus. The first section of this guide compares the two syllabuses, highlighting the differences between them. The second part of this guide focuses on the assessment strategy for the new C02 Fundamentals of Financial Accounting exam. The third part of this guide lists additional (or changed) learning outcomes in the new syllabus. If you have any further queries relating to this guide, please contact the CIMA Contact Centre: Telephone+ 44 (0)20 8849 2251 Email: [email protected]

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Syllabus Comparison New syllabus

Old syllabus

C02 Fundamentals of Financial Accounting A. Conceptual and Regulatory Framework - 20%

C02 Financial Accounting Fundamentals 2 (i) Conceptual and Regulatory Framework 20%

B. Accounting Systems - 20%

2(ii) Accounting Systems 20%

Unchanged.

C. Control of Accounting Systems 15%

2(iii) Control of Accounting Systems 15%

Again the only change reflects the new terms seen in IFRS and IAS.

D. Preparation of Accounts for Single Entities - 45%

2(iv) Preparation of Accounts 45%

No material changes in learning outcomes but now has the specific inclusion of impairment and statement of changes in equity.

Comparison and Comments

No material changes in learning outcomes but the terminology has been updated to reflect that used in International Reporting Standards (IFRS) (and IAS).

Aims These are expanded to require the student to: • •

Prepare and interpret accounts for a single entity Interpret simple ratios.

In both cases the intention is clearly to require the student to demonstrate understanding and not simply prepare accounts and ratios.

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Assessment There will be a computer based assessment (CBA) of 2 hours duration, comprising 50 compulsory questions, each with one or more parts. The current paper requires a CBA of 90 minutes duration with 40 questions with one or more parts. A variety of objective test question types and styles will be used within the assessment. As well as the conventional multiple choice format other possible styles include: • • • • • • • • • •

filling in the blank in a sentence listing items in rank order stating a definition (in not more than __ words) identifying a key issue, for example advantage/ disadvantage (in not more than __ words) calculating one specific figure, for example profit for a period. completing a blank or partially completed prescribed format using terms and/or numbers, for example an overhead cost table identifying points on a graph or diagram, for example a break even point identifying a specific term describing action/valuation seen in a scenario, for example the conditions for a recession matching items together or with a description, for example “are the following cash or non-cash items” interpreting numerical or graphical data.

For further information about computer based assessment please visit the website at www.cimaglobal.com/cba

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Learning Outcomes Additional (or changed) learning outcomes The following learning outcomes were either not included in the corresponding “old” syllabus or have experienced a change: • identify the various user groups which need accounting information and the qualitative characteristics of financial statements; • identify the underlying assumptions, policies and changes in accounting estimates; • explain and distinguish capital and revenue, cash and profit, income and expenditure, assets and liabilities • identify the basic methods of valuing assets on current cost, fair value and value in use bases, and their impact on profit measures and balance sheet values; • explain the meaning of fair presentation • explain the difference between bad debts and allowances for receivables; • prepare accounts for bad debts and allowances for receivables; • prepare accounts using each method of depreciation and for impairment values; • prepare income statements, statement of changes in equity and balance sheets from trial balance • interpret basic ratios;

Transition Arrangements Exams based on the CIMA Certificate in Business Accounting 2006 Syllabus, will be available at CIMA approved CBA centres from 2 October 2006. Exams based on the CIMA Certificate in Business Accounting 2000 Syllabus, will be available at CIMA approved CBA centres until the 1 March 2007. Exams based on the 2000 and 2006 Syllabus will be available concurrently between the 2 October 2006 and the 1 March 2007.

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Conclusion The paper shows little change in content other that it has been updated to include terms now used in International Reporting Standards (IFRS) (and IAS). The aims have been adjusted to emphasise the interpretation of both accounts for single entities and ratios. The assessment however is longer (90 minutes to 2 hours) and has an increased number of questions to be answered (40 to 50).

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