REK CB accrual basis by alicejenny

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									                                                                                       School for Entrepreneurship and Business Development / School for Accounting




INSTRUCTIONAL OFFERING                                          FINANCIAL ACCOUNTING 2 (REK20CB)
SUBJECT CODE                                                    040109322
EXAMINATION                                                     1X3 HOURS
CREDITS                                                         35
NQF LEVEL                                                       6
TYPE OF LEARNING                                                CORE

UNIT          SPECIFIC OUTCOME                                  ASSESSMENT CRITERIA                                              CREDITS      NOTIONAL      WEEKS
                                                                                                                                              HOURS
1. Company    After studying this unit you should be able to:   Learners demonstrate their competence by:                        5            50            5
   accounts
                     Identify the terminology particular to         Terms relevant to companies outlined/defined
                      companies
                     Record transactions related:                   Recording the following transactions in the books of the
                      - dividends                                     business:
                      - income tax                                     - dividends declared and paid
                      - issue of shares                                - income tax paid and provided
                      - redemption of preference                         including STC
                         shares                                        - issue of shares
                      - raising and repayments of loans                - conversion of shares
                      - issue and redemption of                        - capitalisation-shares issued
                        debentures                                     - writing off of expenses to share
                                                                         premium and stated capital
                                                                       - redemption of preference
                                                                         shares
                                                                       - Issue and redemption of
                                                                         debentures

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                                                                                               School for Entrepreneurship and Business Development / School for Accounting




2. Presentati     After studying this unit you should be able to:    Learners demonstrate their competency by:                          3             30            3
   on        of
   financial
   statement
   s
                        discuss the objective and scope of the             outlining the objectives of AC101,
                         Statement,
                        discuss     the    purpose   of financial          state the purpose of AC101,
                         statements,
                        identify and discuss the components of              identifying and discussing the components of financial
                         financial statements,                                statements,
                        define the following:                               defining:
                   impracticable                                     -   impracticable
                  - International Financial Reporting Standards      -   International Financial Reporting Standards (IFRSs)
                    (IFRSs)                                          -   Material, and
                  - Material, and                                    -   Notes
                  - Notes
                        discuss fair presentation and compliance           describing fair presentation and compliance,
                         with Statements of GAAP
                        discuss the following concepts:                     describing:
                  - going concern,                                   -   going concern,
                  - Accrual basis of accounting,                     -   Accrual basis of accounting,
                  - Consistency of presentation                      -   Consistency of presentation
                  - Materiality and aggregation,                     -   Materiality and aggregation,
                  - offsetting, and                                  -   offsetting, and
                  - Comparative information                          -   Comparative information


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                                                                                            School for Entrepreneurship and Business Development / School for Accounting




                    explain the following:                              explaining:
               - Identification of financial statements, and        - Identification of financial statements, and
               - reporting period                                   - reporting period
                    discuss the current/non-current distinction         differentiating between current and non current assets and
                     in the balance sheet,                                liabilities.
                    differentiate between an income statement           preparing an income statement according to nature and
                     prepared according to nature and one                 according to function,
                     prepared according to function,
                    discuss the ways in which changes in                accounting for changes in equity,
                     equity may be accounted for,
                    discuss the key sources of estimation               discussing the key sources of estimation uncertainty
                     uncertainty,
                     prepare a balance sheet, an income                 preparing the income statement, balance sheet and
                      statement, a statement of changes in                statement of changes in equity according to the
                      equity in terms of the Fourth Schedule, the         requirements AC101 and fourth schedule,
                      minimum requirements of the Companies
                      Act and the basic requirements of AC101,
                      and the additional notes as required by
                      the Fourth Schedule
                     integrate the requirements of IAS I                integrating AC101 with all topics
                      (AC101) with all topics.
3. Property,   After studying this topic you should be able to:     Learners demonstrate their competence by:                          2           20            2
   plant and
   equipment
   (AC123)


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                                                                                              School for Entrepreneurship and Business Development / School for Accounting




                        Account for the allowed alternative               Preparing all the entries for PPE in the financial
                         treatment for the determination of the             statements according to the revaluation model
                         carrying amount of PPE (after the initial
                         recognition of an asset) (The revaluation
                         model)
                        Ignore tax implications
4. Cash flow      After studying this unit you should be able to:     Learners demonstrate their competence by:                           3          30            3
   statements.
   (AC118)

                        Introduce the terminology used in cash            Outlining or defining all the terminology used in cash flow
                         flow statements                                    statements
                        State the objectives of a cash flow               Describing the objectives of cash flow statements
                         statement.
                        Prepare a cash flow statement according           Preparing the cash flow statement according to the direct
                         to the direct method.                              and indirect methods
                        Prepare a cash flow statement according
                         to the indirect method.
                        Illustrate   the    minimum     disclosure        Preparing all the notes to the cash flow statement
                         requirements for cash flow statements
5. Close          After studying this unit you should be able to:     Learners demonstrate their competence by:                           2          20            2
   Corporations
                       Describe the characteristics of a close            Describing the characteristics of a close corporation.
                        corporation.
                       List the requirements for the formation of         Describing how to form a close corporation.
                        a close corporation.


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                                                                                             School for Entrepreneurship and Business Development / School for Accounting




                   1. Compare a Close Corporation with a                 Differentiate between close corporations, companies and
                      company.                                            partnership.
                   2. Describe the information contained in the          Naming the information that should appear in the founding
                      founding statement of a close corporation.          statement.
                   3. Prepare the financial statements of a close        Preparing the financial statements of a Close Corporation.
                      corporation to comply with the Close
                      Corporations ACT and GAAP.
6.    Impairment      After you have studied this study unit, you   After studying this unit, you should be able to:                   3            30            3
     of assets        should be able to do the following:
     (AC128)           define the objective and scope of              Explain the objective and scope of AC128;
                          statement IAS 36 (AC128);                    Define the following terms:
                       define the definitions;                         Active market, recoverable amount, value in use, fair value,
                       apply the prescribed indications to             impairment loss
                          assess whether an asset may be               Identify an asset that may be impaired;
                          impaired;                                    Calculate the recoverable amount;
                       determine the recoverable amount               Calculate the impairment loss;
                          through measurement of the value use         Reverse the impairment loss;
                          and the fair value less costs to sell;       Disclose impairment losses and the reversal thereof in the
                       recognize and measure impairment                financial statements.
                          losses;
                       Disclose impairment losses and the
                          reversal of impairment losses in the
                          financial statements.
                       (IGNORE             CASH-GENERATING
                          UNITS)



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                                                                                                School for Entrepreneurship and Business Development / School for Accounting




     7. Intangible   After studying this topic, you should be able     After studying this unit you should be able to:                         4       40            4
        assets       to:
        (AC129)       set out the objectives of IAS 38                       Explain the objectives of AC129 and the scope for
8.                       (AC129) Intangible assets and the                     applying it;
                         scope for applying it;                             Define the following terms:
                      understand and be able to interpret the             Intangible asset, active market, amortization, an asset,
                         definitions applicable to intangible              carrying amount, cost, depreciable amount, development,
                         assets;                                           research, fair value, useful life, monetary assets, residual
                      explain       the     criteria   for     the        value.
                         reconditioning and initial measurement             Determine if an asset should be recognized as an
                         of an intangible asset in a separate                  intangible asset;
                         acquisition, acquisition as part of a              Calculate the initial cost of the asset acquired separately,
                         business combination, acquisition by                  as part of a business combination, by way of a
                         way of a government grant, exchange                   government grant or assets acquired in exchange for
                         of assets, internally generated goodwill              monetary or non-monetary assets; internally generated
                         and internally generated intangible                   goodwill and internally generated intangible assets.
                         assets;                                            Determine when expenditure should be recognized as an
                      explain when expenditure should be                      expense or as an intangible asset.
                         recognized as an expense and how                   Measure intangible assets subsequent to initial
                         subsequent expenditure should be                      measurement according to the cost model and the
                         recognized;                                           revaluation model.
                      explain how to measure intangible                    Determine whether the useful life of an intangible asset
                         assets      subsequent       to     initial           is finite or indefinite and amortize intangible assets with a
                         reconditioning according to the cost                  finite useful life.
                         model and the revaluation model;                   Determine when an intangible asset should be
                      explain how intangible assets with a                    derecognized.

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                                                                                          School for Entrepreneurship and Business Development / School for Accounting




                       finite useful life, should be amortized,           Disclose all information relating to research costs,
                       with reference to the amortization                  development cost, amortization and impairment in the
                       period and method, and the residual                 financial statements.
                       value and the review of all this;
                      explain how intangible assets with an
                       indefinite useful life shall be measure
                       subsequent to initial recognition;
                      derecognize intangible assets on
                       retirement and disposals;
                      explain and apply in the presentation
                       and     disclosure     requirements   of
                       intangible assets by presenting and
                       disclosing them correctly in a set of
                       financial statements;
                      Integrate intangible assets with other
                       Statements of Generally Accepted
                       Accounting Practice.
                      Ignore tax implications
8. Investment   After you have studied this topic you             After completion of this unit you should be able to:                  3            30           3
   property     should be able to do the following:
   (AC135)           Define investment property                         Explain what investment property is;
                     Classify property as investment                    Determine when an item is investment property;
                        property                                         Determine when investment property should be
                     Account for investment property                     recognized as an asset;
                        according to the cost model and fair             Calculate the initial cost of investment property;
                        value model                                      Measure investment property after initial recognition
                     Account for transfers to and from
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                                                                                   School for Entrepreneurship and Business Development / School for Accounting




                  investment property                             by using the cost model and the fair value model;
                 Disclose investment property in the            Account for transfers to and from investment
                  financial statements                            property;
               Ignore tax implications                          Disclose investment property in financial statements.
9. Foreign    After studying this topic, learners           After completion of this unit you should be able to:                 3            30           3
   exchange   should be able to:
   (AC112)     set out the objectives of the IAS 21           Explain what this statement prescribes;
                  (AC 112) The effects of changes in           Define the following:
                  foreign exchange rates and the                functional currency, foreign currency, presentation
                  scope for applying that;                      currency, closing rate, exchange differences, fair value,
               understand the definitions relating             exchange rate, spot exchange rate, foreign operation,
                  to foreign exchange and interpret it          monetary items.
                  in practical examples;                       Account for foreign exchange transactions in the
               account        for   (recognize      and        journal.
                  measure)       foreign     exchanges         Present and disclose foreign exchange transactions in
                  transactions in the functional                the financial statements.
                  currency of the reporting entity;
               To distinguish between monetary
                  and non-monetary items,
               To apply the correct translation rate
                  to monetary and non- monetary
                  items
               To recognize the related exchange
                  differences in either profit or loss or
                  in equity,
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                                                                                     School for Entrepreneurship and Business Development / School for Accounting




                    translate the results and financial
                    position of a reporting entity into a
                    different presentation currency;
                     present and disclose the above-
                        mentioned; and
                     Apply the contents of this statement
                        in discussion type questions.
                     Ignore tax implications
                     Ignore hedge accounting

10. Provisions, After studying this unit you should be able   After completion of this unit you should be able to:                 3            30           3
    contingenc to:                                                  Identify the following:
    ies     and      Understand and be able to                   - events after balance sheet date, adjusting events,
    events              distinguish the difference between        non-adjusting events, provisions, contingent liabilities,
    occurring           contingencies and events after the        contingent assets;
    after    the        balance sheet date                          Account for events after balance sheet date,
    balance          Account for contingencies and                  contingencies and provisions;
    sheet date          events after the balance sheet date         Disclose events after balance sheet date,
    (AC107           Disclose contingencies and events              contingencies and provisions in the financial
    and                 after the balance sheet date in the          statements.
    AC130)              financial statements




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                                                                                        School for Entrepreneurship and Business Development / School for Accounting




11. Analysis     After studying this unit you should be able     After completion of this unit you should be able to:                 4            40           4
    and          to:
    interpretati                                                      Select appropriate figures from financial statements
    on        of      Compute and advise from the                     in order to calculate ratios relevant to:
    financial          financial statements on ratios                    - profitability,
    statements         relevant to profitability, liquidity,             - liquidity
                       activity and solvency                             - solvency
                      Determine and compare trends over              Evaluate and interpret these ratios: -compare the
                       time in the business and with those in          trends over time and with that of other businesses in
                       other business                                  the same industry.
                      Evaluate the profitability, liquidity,         Advise on ways to improve the business.
                       level of activity and state of solvency
                       of a business
                      Evaluate the overall state of the
                       affairs of a business




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