ACCA F7, Financial Reporting, is the seventh paper in the compulsory Foundation level of the ACCA exams. The aim of Paper F7 is to test the knowledge and skills required to understand and apply accounting standards in the preparation of financial statements. Students are also expected to know how to analyze and interpret the financial statements, by discussing the results of a company.
The ACCA F7 is a requirement for the advanced and elective Professional level Paper P2, which is Corporate Reporting. The ACCA F7 will test students on conceptual framework for accounting and regulatory framework for financial reporting that conform to International Financial Reporting Standards (IFRS).
ACCA F7: Syllabus.
ACCA F7 is a step above Paper F3, Financial Accounting, and a stepping-stone towards Paper P2, Corporate Reporting, and Paper P3, Business Analysis. The topics in the syllabus of ACCA F7 are related to accounting standards, though not all standards will be covered and tested. Students will be expected to understand and apply the fundamental standards when producing and preparing financial statements. The syllabus also touches upon the theoretical and conceptual issues as part of accounting standards and generally accepted accounting principles (GAAP), and the regulatory issues as part of financial reporting. It is also important to develop an understanding of the importance of IASB as part of the regulatory framework. All of the conceptual information is available in the IASB’s Framework for the Preparation and Presentation of Financial Statements. Students are expected to learn the concepts of group accounting, where consolidated financial statements of all entities will need to be prepared.
Some accounting standards have already been examined in Paper F3, but will be reexamined in ACCA F7 to test a deeper understanding of the standards. Finally, students will be required to assess and interpret published financial statements, including cash flow statements, income statements and balance sheets. They will be required to calculate ratios, explain the results and provide implications for the business.
ACCA F7: Format.
The format of the ACCA F7 will consist of five compulsory questions. Students will be expected to study all the topics thoroughly, which will help them attain a good grade and ease the understanding of Paper P3. Individual questions may require students to apply knowledge from various different topics and subject areas.
The ACCA F7 exam will be divided into five questions. Question 1 will be a 25-marks question, which will be mostly computational with some discussion required, testing consolidated financial statements including pre- and post-acquisition profits and goodwill. Question 2 of the ACCA F7 will also be a 25-marks question, where trial balance will be given and students will be required to prepare financial statements. Students may also be required to do some calculations for financial lease, revaluation, issues of shares or earnings per share. Question 3 will also be a 25-marks question, providing a scenario and requiring the student to prepare cash flow statements, calculate certain ratios and discuss the performance of the business. Questions 4 and 5 of the ACCA F7 will test the remainder of the syllabus and will make up the remaining 25 marks of the exam. The accounting concepts and their frameworks will be tested, with practical examples of their applications.
ACCA F7: Summary.
As the level progresses, ACCA F7 students will be required to show a deeper understanding of accounting standards and concepts, including their applications to real-time scenarios. They will be required to understand the theory thoroughly and apply the knowledge in assessing and preparing financial statements. With some hard work and dedication, students can easily do well in the ACCA F7.