IMPORTANT TIPS FOR CA FINAL ACCOUNTS MAY 2015

Some Useful POINTS to SCORE more in CA Final Accounts :

1. Preparation of notes

Prepare concise notes in the first round of study itself. Your notes should be prepared in a manner, which  supplements your understanding of the concept and the illustrations you have solved. You may either make a separate copy where you write down the important concepts of the chapter or can underline the important concepts in the book itself and read those underlined portion at the time of revision. You should also shortlist the illustrations to be revised again in your second and third round of study.

Short listing of illustrations should be based on the difficulty you faced while solving the question. Besides preparation of important points of the topic (which will help you to recapitulate the whole concepts), a summary of tricky points and adjustments gathered from the practice of various good illustrations may also be prepared which will help in grasping the intricate Practical aspects. Such tricky points or adjustments should be cross linked with the concerned illustration number so that at the time of revision you not only study the accounting treatment but also refer the whole solution again. These notes may be accompanied by the proforma of relevant accounts.

For Example

When your are preparing notes for chapter 5, it is advised that you start studying with consolidation of one subsidiary and prepare notes by writing down the consolidation procedures for the same. Then solve illustrations which involve two subsidiaries and one holding. Then move to the illustration which requires consolidation of chain holding.

There are three working notes which if prepared correctly will mean that half the work has been done and then drawing a consolidated balance sheet will be an easy task for you. These working notes are:

• Analysis of profit of subsidiary into pre-acquisition and post acquisition period and the share of such profit to holding and minority interest.
• Calculation of total amount of minority interest to be shown in the balance sheet.
• Calculation of cost of control or capital reserves arising on acquisition of shares in a subsidiary company

For preparing the working note one, as stated above, you need following information:

• Percentage of shares acquired in subsidiary;
• Date of acquisition of shares that established the holding-subsidiary relationship.
• Balance of reserves and surplus as on the date of acquisition.
• Any revaluation of assets or liabilities on the date when such relationship came into existence
• Any dividend outstanding, especially on preference shares.
• Any distribution of profit in post acquisition period from pre-acquisition period either in the form of dividend or bonus shares.

In preparing the working note 2 of Minority interest, following items are required

• Percentage of share capital (nominal value) (equity and preference both)
• Share of pre-acquisition profit
• Share of post-acquisition profit
• Dividend on share capital at point (a) above.
• Likewise, you can prepare notes. These notes will help you at the time of your revision, provided you write crisply in a manner which will easily be recapitulated.

2. Use of proper and prescribed format for presentation of accounts

There are some chapters which require the solution or financial statements to be presented in particular format. You should make it a practice to adopt the prescribed formats while solving and presenting the accounts of particular topics. For example: Financial Statements of companies should be in the format prescribed in the Schedule VI to the Companies Act, 1956. The format of presentation of Value Added Statement should be kept in mind while solving the problems on that topic.

3. Recapitulation of previously read Accounting Standards and some topics

In the paper of Financial Reporting, Accounting Standards cover major portion of syllabus. So you are advised to gain in-depth knowledge of accounting standards. Here, it is worth mentioning that, out of 31 effective standards, eighteen accounting standards were covered in the Intermediate (IPC) Course syllabus also. Since, you are already aware of the provisions of those standards, you have to recapitulate the same and practice higher level questions in addition to the questions dealt with at the Intermediate (IPC) Course level. Practice of higher

level questions on these standards is necessary in order to match the advanced level of knowledge required in the Paper of Financial Reporting. For remaining standards, it is advisable to first go through the respective units of that standard in chapter one. After studying the explanation on Accounting Standards, we recommend that you go through the text of accounting standard once. By doing so, you will gain in-depth knowledge and conceptual clarity of the standards.

4. Keep yourself continuously updated

We at Board of studies endeavor to update you with the latest amendments or notifications as and when they are issued. One of the sections in the Students’ Journal is on ‘Academic Update’ which contains recent amendments in accounting also. You should be in a habit to read this continuously as it will help you in avoiding last moment pressure to acquaint yourself with all the relevant amendments. Also list of publication comprising of all relevant accounting standards and guidance notes are published well in time in the Students’ Journal and the institute’s website to apprise you with the applicability part of the same in the particular examination.

5. Keep in mind the Inter-linking of various topics

The provision of accounting standards have to be kept in mind and applied while studying the related chapter based on the particular accounting standard. If your concepts are clear relating to a particular standard, you should not face any problem in applying the same to solve problems in an inter-connected chapter. Sometimes even though the chapter may not directly relate to an accounting standard, it may contain adjustments involving application of one or more standards.

For example, while preparing Consolidated Financial Statements of parent and subsidiary, you have to apply provisions of AS 21. Similarly, for treatment of Investment in Associates and joint ventures you have to apply the provisions of AS 23 and AS 27 respectively.

The provisions of various statutes should also be kept in mind while reading the chapters. For example, in thepreparation of financial statements of Companies, it is quite possible that a particular item may be dealt in two different ways. For example – treatment of preliminary expenses has to be done on the basis of section 78 of the Companies Act, 1956 or as per AS 26, depending on other information available. For example, if there is securities premium shown in the books, then preliminary expenses should be written off against it. If securities premium is not available, then preliminary expense is to be charged to Profit and loss account of that year as per AS 26. In such a case, AS 22 will also come into the picture. As per Income tax, preliminary expenses are allowable in five years and as per AS 26 it is to be fully charged to Profit and Loss account of that year. This gives rise to Deferred Tax Liability.

We have made an attempt to explain with the help of tabular form given here under the manner in which concepts contained in the particular chapter of the study material have to be interlinked with the related provision in another chapter of the study material and read together.

Note: Chapter 8 deals with reporting by different financial institutions and chapter 10 deals with additional non-mandatory reporting like value added report or economic value added etc. These chapters are not specifically inter-related with any other chapter or any accounting standards.

It is observed in the past examination that at least one question carrying two sub-parts of 8 marks each is asked on this topic. Sometimes small questions of 4 to 5 marks are also asked from the Chapter 8.

Disclaimer: The marks mentioned above are to explain the relative importance of the topic and not to recommend selective study in any case. The above marks may change depending on the length of the questions selected and the calculations involved therein.

ADMIN : NISHANT JAIN

Share on Google Plus

About NISHANT JAIN

Well I Am Nishant Jain, Who Have Made Some Projects On CA And CS Including CA SPOT, CA CS GUIDES, And Exploring More On Techno Builds Website Soon. You Must Visit My FACEBOOK PROFILE BY CLICKING HERE