DFS Revision

Esme

I have been revising using past papers and taught myself the layout of the balance sheet and not statement of financial position, being stuipd and not realising that it had all changed

Are the contents and figures of these two documents exactly the same? Is it purely just the layout that is different?

I've just worried myself so much!!

Steve Collings

Hi,

From June 2010 DFS will be examined using IAS 1 (revised), so the format is:

ASSETS
Non-current assets

Current assets

TOTAL ASSETS

EQUITY & LIABILITIES
Share capital
Revaluation reserve (if applicable)
Retained earnings

Non-controlling interests

NON-CURRENT LIABILITIES
Long-term loan

CURRENT LIABILITIES
Trade and other payables
Income tax expense

TOTAL EQUITY AND LIABILITIES

So all your assets (debits) are on the top and all your liabilities (credits) are on thebottom. All your contents and figures are still the same.

Kind regards
Steve

Esme

Thank you Steve, panic over!

CrazySexyCool

Just out of curiosity, does anyone know why this was changed? Was there some major flaw in how it was set out before or did someone with too much time on their hands decide to make things difficult? After all, if it ain't broke..............

Steve Collings

I, personally, think the 'upside down' approach (equity on top of liabiliites) is a load of rubbish. In fact it's stupid. They should have kept things as they were without messing around. As people have said 'if it ain't broke, don't fix it!'

It's simply the same information, just mixed around a bit (it's like cheese on toast, but now we have toast on cheese). But if you are being examined that way, so be it.

Bonkers.

Julia

I agree with Steve. We have had to teach the new format for the June sittings but don't forget you get proformas in the exam.

The revision to IAS 1 is quite silly but AAT do have to examine under it even though in real life it is perhaps different.

Esme

I think it's a bit harsh for those of us who have learnt the balance sheet layout the other way for the past two levels of AAT, they could have let us get through the last exam! Fair enough starting people at foundation level off with the new format.

jow774

Totally agree esme. Although its only minor changes when you have learnt the other way, it seems twice as hard to understand totally new terminology and layout for everything.

rach12

Help

Hi I am new to the forum, and I am also struggling with revision, the home study book I am using isn't making much sense, I was going to go for the past paper approach but I'm not sure now. I also thought the the answer booklet would have proformas in it....... I'm getting really worried, so much to learn and very little time.

taskey

rach, we are all in the same boat. i have read the bpp home study book but it is still making no sense to me. if you read some of the posts by steve collings, he is the guru. he also has a website with lots of articles on.

http://www.accountancystudents.co.uk/news/headlines/C5/

try that link for a list of articles to read.

i myself am planning on doing past papers this weekend and brushing up on the knowledge from that

Tracy

taskey

oh and welcome to the forum lol

Tracy

jewels.p

Tracy do you ever stop wiggling your bum? :laugh:

NO BUSINESS CASE

Steve C in your expert opinion how would you tackle the SFP question as per part 1 of DFS? Would it be a case of attacking the question for the SFP as:-

Fill in Assets, Fill in Liablities and then come back to fill in equity that will obviously hopefully balance to Assets-Liablilities?!?

I have looked at these questions so often lately but trying to think logically about it now I have gone completely blank!!

taskey

jewels.p wrote: »

Tracy do you ever stop wiggling your bum? :laugh:

are you trying to say i need a new avatar? plus all the movement burns calories lol

Tracy

jewels.p

taskey wrote: »

are you trying to say i need a new avatar? plus all the movement burns calories lol

Tracy

Not with the size of that bum it doesn't! lol

Steve Collings

NO BUSINESS CASE wrote: »

Steve C in your expert opinion how would you tackle the SFP question as per part 1 of DFS? Would it be a case of attacking the question for the SFP as:-

Fill in Assets, Fill in Liablities and then come back to fill in equity that will obviously hopefully balance to Assets-Liablilities?!?

I have looked at these questions so often lately but trying to think logically about it now I have gone completely blank!!

Hi,

I think the key to dealing with either single entity or consolidated financial statement preparation is to have a methodical plan of attack. Going in with a scattergun style approach isn't going to be beneficial. This is what I advise students on my revision days:

1. Make the best of the 15 minutes' reading time. With Q1 of DFS you're more than likely going to get a single entity statement of comp income and a SoFP to do. An initial trial balance will more than likely be given to you with notes underneath detailing various adjustments that are needed to be incorporated within the TB and which are to be done by way of journal to demonstrate your double-entry knowledge. From the adjusted TB you will be expected to draft the primary statements (income statement and SoFP) on your answer script.

2. As you deal with the adjustments, amend the figures on the inital trial balance and include additional line items (such as closing inventory - which is more than likely going to be one of the notes to the initial TB). By amending the figures in the TB on the question paper, it will make it easier for you to draft the primary statements.

3. When preparing the primary statements, do it whichever way you feel comfortable. When I prepare the suggested answers I deal with the income statement first then I deal with the SoFP. I always prepare the SoFP in order (non-current assets, current assets, equity, current liabilities and non-current liabilities).

4. Don't forget when you are doing the equity section of the SoFP, don't forget the dividends in the TB (lots of students do!!) The dividends are not shown on the face of the income statement and so you will have to take these into account when calculating your retained earnings figure to be included (retained earnings per TB + profit after tax less dividends).

5. Everybody has their own way of attacking computational questions (such as the primary statements and consolidated primary statements). I show students my way of doing them, but I do emphasise in class (and all my ex-students will verify this) that if they have their own, equally effective way of arriving at the numbers, then use their way. At this stage in the revision process, it would be inappropriate to change methods just because I might calculate the numbers using a different layout or plan of attack.

I think the IAS 1 (revised) has come as a bit of shock to J10 candidates and I am not a fan of the revised version as I am a firm believer of 'if it ain't broke don't fix it'. However, regardless of that, realistically it is only a presentational issue. It is the same information being conveyed but in a different way. My advice would be to draft a proforma in the IAS 1 (revised) format, and practise past papers using that proforma so you are more used to it in the exam.

Hope that helps.

Regards,

Steve

jow774

I'll say its come as a shock, I did FRA about 18 months ago and it has really changed in that time, stocks to inventories, debtors to trade receiveables (Ive probably got that wrong etc etc the list goes on. I know they are small changes and we should pick them up but it doesnt half make it a difficult.

Sorry, moan over.