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SYLLABUS
FINANCIAL ACCOUNTING 3, ZIMBABWE
In Financial Accounting 2, students are required to show familiarity with and competence in certain topics,
mostly related to company accounts. With the admission of the Istitute into the Zimbabwe public
Accountants and Auditors Board, IAC graduates in Accounting should show that they are par with the
graduates of other Institutes represented on the Board. Financial Accounting 3, as the last paper in this
specialisation, will require an in-depth knowledge of accounting polices and procedures as outlined in
relavant legislation and international accounting standards.Financial Accounting 3 is the Final qualifying
examination for those who wish to apply for practising certificates in this field.
THIS IS A FOUR HOUR PAPER
OBJECTIVES
After completing this course, students should be able to:

Demonstrate their ability to prepare consolidated financial tatements where subsidiaries are
wholly and partially owned

Properly interpret the requirements of the Companies Act and Financial Regulations with regard
to consolidated financial statements

Demonstrate their ability to prepare and interpret financial reportsfor the benefit of the Bord of
Directors, management and shareholders

Act as advisers in mergers, acquisations, deceased estates and other situations requiring
specialist accounting knowledge

Show an appreciation of current and emerging issues in Financial Accounting
SYLLABUS/COURSE OUTLINE
SECTION 1 THE REGULATORY FRAMEWORK


(10%)
(i) International
- The objectives of the international Accounting Standards Board
-Framework for the preparation and presentation of finacial statements
-The development of international accounting standards
-Benchmark and allowed alternative treatments
-Interpretation of accounting standards and othr pronouncements
(ii) Local
-The functions of the Zimbabwe Public Accountants and Auditors Board
-The development of local accounting starndards
-The status of internationalaccounting accounting standards in Zimbabwe
SECTION 2 CORPORATE GOVERNANCE
(5%)
-Defination and role
-Roles of executive and non-executive directors
-Responsibilities of audit committees
-Responsibilities of mangement, shareholders and other stakeholders
-Code of best practice
SECTION 3 CONSOLIDATED FINANCIAL STATEMENTS 1
(15%)
-Components of consolidated financial statements
:the income statement
:the balance sheet
:the cash flow statement
:the statement of changes in equity
:accounting polices and notes to the financial statements
-Consolidation of partly-owned subsidiaries at and after date of acquisation
-Treatment of goodwill in subsidiaries
-Intercompany transactions:indebtedness and unrealised profit in stocks
SECTION 4 CONSOLIDATED FINANCIAL STATEMENTS 2
(10%)
-Accounting for associates
-Proposed dividends and dividends paid out of pre-acquisation profits
-Preference share capital in the subsidiary
-Depreciation of non-current assets
-Piecemeal acquisations and decontrol of subsidiaries and associates
SECTION 5 MERGERS AND ACQYUISATIONS (IAS 22)
(10%)
-Characteristics of merger accounting and comparisons with acquisation accounting
-Adjustments in respect of share capital, expenses and dividends
-Recognition of identifiable assets and liabilities acquired
-Determination of fair values of identifiable assets and liabilities acqiured
-Recognition and measurement of goodwill and negetive goodwill arising on
acquisation of subsidiary
SECTION 6 VALUATION OF SHARES AND OTHER BUSINESS
INTERESTS (10%)
-Rationable for the valuation of company securities
-Different approaches to valuation
:earnings basis
:assets basis
:dividend models
-Valuation of individual securities
:ordinary shares
:preference shares
:debentures
-Valuation from the perspective of an investor without control
-Share exchange terms
SECTION 7 CAPITAL RE-ORGANISATIONS AND RECONSTRUCTIONS (10%)
-Circumstances giving rise to re-organistions and reconstructions
- Power of company to purchase own shares
-Voluntary and involuntary winding up
-Liability of members in respect of reduced shares
-Consolidation of share capital, reduction of share capital and conversion of shares
into stock
-Preparation of consolidated financial statements after re-organisation or
reconstruction
SECTION 8 NET PROFIT OR LOSS FOR THE PERIOD, FUNDAMENTAL ERRORS
AND CHANGES IN ACCOUNTIN POLICES (IAS 8) (5%)
-Dertermination of net profit or loss for a specific period
-Distinction between ordinary activities, unusual items and extraordinary items
-Defination and significance of fundamental errors
-Distinction between changes in accounting polices and changes in accounting
estimates
-Disclosure requirements
SECTION 9 ADVANCE INTERPRETATION OF FINANCIAL STATEMENTS
(10%)
-Revision of earlier material
-Common size statemengts
-Pyramid of ratios
-Investment ratios
-Prediction of company faliure
SECTION 10 CURRENT AND EMERGING ISSUES IN ACCOUNTING (5%)
-Headline earnings
-Interim reporting (IAS 34)
-Segment reporting (IAS 14)
-Value added tax
-Deceased estates
-Creative accounting
-Social responsibility accounting
-Forensic accounting
SECTION 11 KEY INTERNATIONAL ACCOUNTING STANDARDS (10%)
In addition to the standards indicated above, the following standards will be
specially
examinable:
IAS 12 Income Taxes
IAS 16 Property, Plant and Equipment
IAS 17 Leases
IAS 18 Revenue
IAS 21 The Effects of Changes in Foreign Exchange rates
IAS 28 Accounting for Investments in Associates
IAS 29 Financial Reporting in Hyper-inflationary Economies
IAS 31 Financial Reporting of Interests in Joint Ventures
IAS 32 Financial Instruments: Disclosure and Presantation
IAS 33 Earnings per Share
IAS 36 Impairment of Assets
IAS 37 Provisions, Contigent Liabilities and Contigent Assets
IAS 32
Financial Instruments: Recognition and Measurement
Questions on these standards will be in form of theory and/or calculations
APPENDIX THE ZIMBABWE STOCK EXCHANGE
-Responsibilities of listed companies and other requirements
PRESCRIBED MATERIAL
-IAC Study pack (to be published in the near future)
RECOMMENDED MATERIAL
(i) Advanced Corporate Reporting
ACCA Study Text (Paper 3.6) BPP Publishing 2002
(ii) Accounting Standards - Questions & Solutions by C.S. Binnekade, S.F.
Booysen et al. Jutz & Co. Ltd.2001
(iii) Groups Statements (latest edition) by Cilliers, Rossouw and Faul: Butterworth
(iv) Carter's Advanced Accounts (latest edition) by Garbutt: Pitman
(v) Principles of Consolidated Financial Statements (latest edition ) by Lane: Juta &
Co
ESSENTIAL REFERENCE MATERIAL
(i) International Accounting Standards (Latest edition) IASB
(ii) Companies Act (Chapter 24:03)
(iii) Companies (Financial Statements) Regulations 1996
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