Friends all of you are going to be a
Chartered Accountant and a CA is supposed to be very much familiar with this
subject at least. We are studying this subject from 11th standard and this is a
subject in which you can secure the highest.
As
we are going to be chartered accountant, so financial reporting is the best
thing we have to study and understand as it is going to be part of our day to
day life after being Chartered Accountant. Moreover institute is also expecting
expert knowledge at this particular point of time.
This paper is most scoring paper in
Group one of CA Final exam. This is not at all tough paper.
We are so called "munimji".
“CA ko Accounts nahi aayega to aur kya
aayega”
I
would like would like to give some guidance on CA final Accounts Paper based on
my experience.
Some students have been made a concept
that Financial Reporting is all about Holding Company Accounts and
Amalgamation. But there a slight difference if you have analyzed this paper
properly. According to me there are lot of small topics which are easier and
can be prepared with 100% accuracy in short span of time. Rather than devoting one
month on preparing Holding Company Acts (and getting it half correct in exam
hall) students can easily cover small topics in a week (and score 40-50 marks
with full accuracy). Later on they can prepare for holding and amalgamation.
So
here is the topic wise in order of preference :-
1. Value Added Statements -
Economic Value Added, Market Value
Added, Shareholders’ Value Added
|
2. Share Based Payments - Sums on ESOP, ESPS etc (It can
be covered From ICAI Study mat)
|
3. Miscellaneous Topics - Financial Reporting by Mutual
funds, Non-banking finance companies, Merchant bankers, Stock and commodity
market intermediaries + Human Resource Accounting
|
4. Valuation of Goodwill, Shares, Business, Brands etc (
V.IMP)
|
5. Corporate Restructuring - sums on capital reduction,
demerger, buy back etc
|
6. Accounting for Financial Instruments+(AS 30,31,32)-Sums
on forex, derivative, call /put options etc
|
7. Amalgamation
|
8. Consolidated Financial Statements (Holding Company)
|
Accounting
Standards:-
While starting, you can go to practical
topic like corporate restructuring i.e. merger, amalgamations, internal
restructure, take over, sale, spin off etc, consolidated financial statements,
share based payments etc. But never ignore or try to underweight Accounting Standards,
these cover 20-30 percentage of exam paper in paper 1 “financial Reporting” as
well as paper 3 “Auditing and Assurance”.
Each and every Accounting Standard is
important. You should understand it conceptually. Never try to categorize some
standards as most important that’s only you are going to do for exam and skip
rest of AS. Accounting standards play a vital role in this paper. Weightage of
Accounting Standards usually remains 25-30 marks. But, For your convenience, I
am providing you the ABC analysis of Accounting Standards are mentioned
hereunder:-
Category A
|
AS 15,16, 17, 18, 19, 20, 22, 25, 26, 28
|
Category B
|
AS 2, 11, 12, 13, 24, 29, 30, 31, 32
|
Category C
|
AS 1, 3, 4, 5, 6, 7, 9, 10
|
HOW TO STUDY and OTHER KEY POINTS
a) First of all revise the Accounting
standards mentioned in Category A thereafter focus on some small topics like
Value Added Statement, NBFC, Share based Accounting. Thereafter you would gain confidence
on the subject. Then accomplish the topics Valuation of goodwill, Amalgamation,
Corporate Restructuring and Accounting standards mentioned in Category B and C.
b) After then pick the Holding Chapter
and spread it over a week, say if you have 70 questions in the chapter solve
only 10 questions in a day and at last complete the rest of the remaining
syllabus.
c) Accounting Standards can be prepared
on daily basis like ONE AS everyday (Longer time for tough AS Like AS 22,15,19
etc) along with practical case studies on AS. Don't give so much stress on IPCC
level AS.
d) Financial Reporting, the question
paper is purely practical. Therefore, you have to practice solving a good number
of questions on each topic. Try to solve each problem on your own (by
yourself), in spite of just audit solution from notebook or study material. So,
Do practice on regular basis. Don't refer to solution from your notebook or any
where else.
" Practice does
not make perfect. Only perfect practice makes perfect."
e) Consolidated Financial Statement and
Amalgamation are definite questions for 16 marks each. (One question will be
easy and the other one hard). So, Be Focused Consolidated Financial Statements,
Amalgamation and Restructuring, Share Based Payments, valuations. These
chapters together will fetch you at least 48 marks.
f)
To
Score high in this paper, Keep these points in your mind while preparing for
this paper.
1) Use
of proper and prescribed format for presentation of accounts. Don’t try to
skip, preparation of Balance Sheet in revised schedule format with notes. State currency in
subjects such as costing and accounts and draw columns with double lines when
time permits
2) Adequate
Working Notes in supporting to your answers and State the assumption clearly
3) Answer
the questions with due emphasis on the provisions of Accounting Standards.
4) Go
through each and every topic thoroughly and understand conceptual points
supporting each topic.
5) Try
to solve as many questions as you can and also go through Practice Manual,
Revision test papers, Suggested answers, Mock Test papers. (to the extent
possible and available).
6) Don’t
underweight topics like Value Added Statements, Human Resource Accounting,
Mutual funds, NBFC etc.
7) You
should test your preparation by attempting some previous exam paper, revisions
test papers, mock test papers under ultimate exam condition or environment. Later
on check the result of your effort and make necessary correction/modification
to your study preparations.
8) I
personally recommend you to attempt Revision test papers, Suggested answers,
Mock test papers at least one in a day. you will find variety of questions and
you will never get disappointed in exam hall.
9)
If you failed more than three
times, I prefer you to replace your all the old books with new books preferably new authors.
10)
Impress the valuator with the Starting
answers. It should represent you caliber to give a good answer in all respects:
content, neatness and presentation.
" First Impression is The Last Impression"
11) Avoid overwriting.
Where they become inevitable, strike off and write again. Clarity is more
important than neatness
12)
Always leave left hand
page for showing workings, assumptions and notes. Workings are a must
for the answer to be valid and should be fairly elaborate. Present
them parallel to the question concerned. Use last page of the booklet
for rough work.
13) If
there is a question for which you do know the answer but do not have
the time to write it fully, write a synopsis for the answer. This should
be done, if required, only at the end of the answer sheet.
14) Provide Total
columns where applicable in accounts and costing, Similarly state
narrations to journal entries in the case of accountancy.
15) If
the balance sheet is not tallying in the case of accounts, apply the
principle of double entry by ticking off the entries. Any figure taken from a
tallied statement should appear only once, and the rest, twice on opposite
sides. Finally check totals. If still they do not tally, write totals as they
come and do try to deceive the valuator.
Do not try
to deceive the valuator in any subject. They are likely to be smarter than
you, in which case the penalty will be high.
16) Try
to mange two pens i.e. Blue and Black ink only in exam hall. Use black ink pen
only for underling the key words of answers, for making columns and headings.
17) While
you write your exams, as a part of strategy, attempt consolidation at the end,
after you attempt all the other questions, as consolidation may take around
45-60 minutes. Best suggestion, if you can attempt other questions, then you
can leave consolidation as a choice. Most students are not able to clear this
paper as they spend too much time attending consolidation and then accuse lack
of time/ say that paper is long.
Your professional approach and qualitative effort is the key
to pass CA examination. To be a successful chartered accountant you should be
able to analyze and develop an understanding of published financial statements
and annual reports of companies. This exercise will enable you to know, how the
various accounting concepts, conventions, rules, principles and standards are
applied in real life situations.
You have to complete all the topics in
the subject as it is final and no one can’t predict what will come and what
will not. But up to certain extent we can modify our way of studying and decide
what to read on priority basis and what to read at last and achieve the heights
of success.
Believe me, if you would study in this
way, would be able to secure good marks in the subject.
Further, if you will need any kind of help,
please ping me thru mail or facebook.
I am working on next article on Preparation
Strategy for SFM, LAW, AUDIT of CA Final Gr-I.
TO BE CONTINUED.
(Author can be reached at caagrawalpankaj@gmail.com)
Thanks and
Regards
CA Pankaj K
Agrawal
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