An introduction to Financial Statements of Limited Companies
The unit is concerned with the drafting, analysis and interpretation of financial statements of limited companies. This builds on the Foundation and Advanced levels, where the emphasis of the financial accounting units is on identifying and recording transactions in accounts and ledgers following the principles of double-entry bookkeeping, and drafting the statements of unincorporated organisations from the accounts and records prepared.
On successful completion of this unit, a student could be expected to be able to draft the financial statements of single limited companies and groups of companies with little supervision. A student could also analyse and interpret the statements by means of ratio analysis for the purposes of assisting outside user groups in their decision making, thereby fulfilling a useful role within an accounting team.
The unit provides students with the skills and knowledge for drafting the statements of single limited businesses and consolidated statements for groups of businesses. It ensures that students will have a proficient level of knowledge and understanding of international accounting standards, which they will be able to apply when drafting the financial statements, and will have a sound appreciation of the regulatory and conceptual frameworks that underpin the preparation of statements.
Finally, the unit will equip students with the tools and techniques that will enable them to analyse and interpret financial statements effectively.
This is a mandatory unit. It builds on the skills and knowledge acquired in the two Foundation level units, Bookkeeping Transactions and Bookkeeping Controls, and the two Advanced level units, Advanced Bookkeeping and Final Accounts Preparation.
Learning outcomes for Financial Statements of Limited Companies
1. Demonstrate an understanding of the reporting frameworks and ethical principles that underpin
financial reporting
2. Demonstrate an understanding of the key features of a published set of financial statements
3. Draft statutory statements
4. Draft consolidated financial statements
5. Interpret financial statements using ratio analysis
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