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How to prepare for CA Final Exams | FINANCIAL REPORTING

Final Course



Accounting is one of the core subjects in the Chartered Accountancy course. The significance of the subject can be judged from the fact that at every level of CA course we have a paper on Accounting and that too the first paper. At Final level the name of the paper is ‘Financial Reporting’. The aim of the paper on ‘Financial Reporting’ is to gain comprehensive understanding of all aspects relating to financial reporting practices and you are expected to have an advanced knowledge of reporting practices and valuation principles used in analyzing these financial reports.

Know your syllabus –

As a first step, you should acquaint yourself with the syllabus of financial reporting so that you can plan your studies accordingly. The study material of ‘Financial Reporting’ is divided in ten chapters/topics based on the syllabus. The topics covered under this paper have been grouped for the sake of your understanding as follows

Be familiar with the Knowledge inputs provided by the BoS

Once you are aware of the syllabus, the next step is to assimilate the knowledge inputs provided by the Board of Studies.

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The following knowledge inputs of BoS will help in-depth understanding of the subject:

  • Study Material (Volume I and II)
  • Practice Manual (Volume III)
  • Compilation
  • Suggested Answers
  • Revision Test Papers
  • Mock Test Papers
  • Students’ Journal for academic updates.

Now, after knowing the various knowledge inputs provided by the Board of Studies.

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Planning – Time Management

you should plan your studies.You are advised to plan your studies taking into consideration the time available vis-à-vis the course contents. Ideally, you should plan in a manner that you keep time for two rounds of revision after your study.

Financial Reporting, the question paper is purely practical. Therefore, you have to practice solving a good number of questions on each topic. Considering the practical nature of the paper, start your studies from the day you receive the course material. At the final level, sure you have to undergo articleship training simultaneously, therefore, it is suggested that you should study at least twelve to fifteen hours a week. By doing so, you will be able to mange first round of complete study and two rounds of revision well before time. Your first round of study should be completed well in advance, that is, at least three months before your exam. Keep some time leverage as assimilation of the chapters may take more time than expected or planned.

Your second round of study i.e. your first revision should be over before one month of your exam. Your second revision should be in the last month before exam so that you will be in the position to remember all the concepts. Doing three rounds of study will help in boosting your confidence level in the subject, and will make you mentally prepared to appear in the examination.

Use of BoS Knowledge inputs in a systematic pattern


As you are aware that the syllabus of Financial Reporting covers Accounting Standards and Guidance Notes on one hand and other topics on the other hand, so your planning should also be divided in two parts namely-

  •  1.Accounting Standards and Guidance Notes
  • 2. Other chapters of the course curriculum.

Every day when you start your study, first revise the concepts which you have read the previous day and then start to learn new concepts. Remember, out of sight, out of mind. Ideally your first revision should be within 24 hours of initial study, the second within the next one week

Step 1 Study material

Start your study with the study material. In study material concepts of the topic and the accounting treatment on various transactions has been explained in detail with adequate illustrations. Analyse the underlying concepts and try to understand the logic behind every accounting treatment given therein. Keep questioning yourself until  you are absolutely clear on the topic. Solve the illustrations after understanding the topic.

For example, in the  chapter of consolidated financial statements, first the concepts of consolidation and the consolidation  procedures have been explained, then small illustrations based on each procedure like, analysis of reserves and surplus of subsidiary, cost of control, minority interest, treatment of dividend etc. have been given after explaining the concept and its accounting treatment. After explaining all the concepts, questions carrying more than one adjustment are given for your practice.

 Step 2 Practice Manual

After solving the illustrations given in the study material, solve the questions given in the practice manual. Practice Manual is highly useful for the students appearing in the examination as it includes questions from past examinations which would facilitate in thorough understanding of the chapters explained in the study material. In accounting paper, it is very necessary that one should practice a good number of questions dealing with different adjustments. Practice Manual will serve this purpose. Your first round of study should cover both Study Material and Practice Manual.


Step 3 Suggested answers

Your second round of study i.e. your first revision should cover practice of suggested answers of recent two to three examinations. Suggested answers of past few examinations give you an idea of what type of questions are asked in the examination and how to solve and present the solution for such questions in the examination. Solving the question paper in the examination situation will help you, not only in time management but will also give you the confidence to attempt different types of questions in the examination.

Step 4 Revision Test Papers (RTP)

After you complete revision of whole syllabus atleast once, you should solve the questions given in the RTP. For every examination, Board of Studies comes out with a Revision Test Paper. Revision Test Paper is issued for every attempt containing a fresh set of questions which will help you to evaluate your preparation level.

RTP of Financial Reporting is divided into two parts namely

Part I: Recent amendments, notifications and announcements which are relevant for that particular examination and is not given in the study material or was not applicable in the immediate past examination. You will be able to know all such relevant information applicable for the exam at one place.

Part II carries questions and answers for your practice. In Financial Reporting, questions on each topic are given with full solution to enable you to get an insight on how to present the solutions in an orderly manner. In Financial Reporting paper, RTP of past few attempts can also be referred subject to amendments for which you have to refer the latest Study Material and RTP.


Step 5 Mock Test Papers

After second revision of the complete syllabus, you may assess your level of preparation by taking mock tests conducted by various branches at their end. Also Mock test papers are hosted on the institute’s website which you may download and solve within a time period of three hours.

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Important points to be kept in mind

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

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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.

Tips for examination

Besides the general tips given in the first part of this booklet, certain tips mainly concerning the accounting paper are

1.Use of proper formats

Certain statutes prescribe specific formats for presentation of the accounts. You should take care of the same at the time of solving the questions in the exam. Accounts presented in the prescribed manner will help you in scoring due marks.

2.Adequate Working Notes

In accounts, your solution is generally divided in two parts viz- main solution and working notes. Working notes form part of your solution and carries marks. Therefore, it is advised that calculations made on your calculator should also be written in your answer sheet as working note, wherever required, neatly and precisely. Also your working note should be cross referenced with the figure used in the main solution so thatexaminer can easily understand that how you have arrived at the particular figure.

3.Answer the questions with due emphasis on the provisions of Accounting Standards

Support your answers/conclusions with proper reasoning. Answers for questions based on accounting standards should be supported with provisions of that accounting standard rather than a mere common sense or guess work. It is not required to quote paragraph number of Accounting standard but you are expected to quote accounting standard number along with the name of the standard. However, if you state, paragraph number of accounting standard, then it will add value to the solution and will also help create a good impression in the mind of the examiner. You should quote number of accounting standard or name only when you are sure. It is better not to quote than to misquote the accounting standard number.

4.State the assumption clearly

In case a question leaves room for making an assumption and there is a possibility of more than one assumption, it is important to clearly state the assumption you have taken and solve the question accordingly. For example, in case of valuation of goodwill, if question does not clearly state as whether to take closing capital employed or average capital employed and there is scope of calculating both, then clearly mention your assumption in the answer-sheet.


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.


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Also Read:

CA IPCC Syllabus CA IPCC Registration CA IPCC Exam Dates
CA IPCC Papers & Mock Tests CA IPCC Study Plan CA IPCC Suggested Answer
CA IPCC Revision Test Papers CA IPCC Study Material CA IPCC Important Date



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