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Friends all of you are going to be a Chartered Accountant and a CA is supposed to be very much familiar with this subject at least. We are studying this subject from 11th standard and this is a subject in which you can secure the highest.

As we are going to be chartered accountant, so financial reporting is the best thing we have to study and understand as it is going to be part of our day to day life after becoming a Chartered Accountant. Moreover institute  also expects expert knowledge at this particular point of time.

This paper is most scoring paper in Group one of CA Final exam. This is not at all a tough paper.

We are so called "munimji".

“CA ko Accounts nahi aayega to aur kya aayega”

I would like would like to give some guidance on CA final Accounts Paper based on my experience.

Some students have a concept that Financial Reporting is all about Holding Company Accounts and Amalgamation. But there a slight difference if you have analyzed this paper properly. According to me there are lot of small topics which are easier and can be prepared with 100% accuracy in a short span of time. Rather than devoting one month on preparing Holding Company Acts (and getting it half-correct in exam hall) students can easily cover small topics in a week (and score 40-50 marks with full accuracy). Later on they can prepare for holding and amalgamation.

So here are the topics in order of preference :-

1. Value Added Statements -

Economic Value Added, Market Value Added, Shareholders’ Value Added

2. Share Based Payments - Sums on ESOP, ESPS etc (It can be covered From ICAI Study mat)

3. Miscellaneous Topics - Financial Reporting by Mutual funds, Non-banking finance companies, Merchant bankers, Stock and commodity market intermediaries + Human Resource Accounting

4. Valuation of Goodwill, Shares, Business, Brands etc ( V.IMP)

5. Corporate Restructuring - sums on capital reduction, demerger, buy back etc

6. Accounting for Financial Instruments+(AS 30,31,32)-Sums on forex, derivative, call /put options etc

7. Amalgamation

8. Consolidated Financial Statements (Holding Company)

Accounting Standards:

While starting, you can go to practical topics like corporate restructuring i.e. merger, amalgamations, internal restructure, takeover, sale, spin off etc, consolidated financial statements, share-based payments etc. But never ignore or try to underweight Accounting Standards, these cover 20-30 percentage of exam paper in paper 1 “financial Reporting” as well as paper 3 “Auditing and Assurance”.

Each and every Accounting Standard is important. You should understand it conceptually. Never try to categorize some standards as most important is that only you are going to go for exam and skip rest of AS. Accounting standards play a vital role in this paper. Weightage of Accounting Standards usually remains 25-30 marks. But, For your convenience, I am providing you the ABC analysis of Accounting Standards, mentioned hereunder:-

Category A

AS 15,16, 17, 18, 19, 20, 22, 25, 26, 28

Category B

AS 2, 11, 12, 13, 24, 29, 30, 31, 32

Category C

AS 1, 3, 4, 5, 6, 7, 9, 10


a) First of all revise the Accounting standards mentioned in Category A thereafter focus on some small topics like Value Added Statement, NBFC, Share based Accounting. Thereafter, you would gain confidence on the subject. Then accomplish the topics Valuation of goodwill, Amalgamation, Corporate Restructuring and Accounting standards mentioned in Category B and C.

b) After then pick up the Holding Chapter and spread it over a week, say if you have 70 questions in the chapter solve only 10 questions in a day and at last complete the rest of the remaining syllabus.

c) Accounting Standards can be prepared on daily basis like ONE AS everyday (Longer time for tough AS Like AS 22,15,19 etc is needed) along with practical case studies on AS. Don't give so much stress on IPCC level AS.

d) Financial Reporting- the question paper is purely practical. Therefore, you have to practice solving a good number of questions on each topic. Try to solve each problem on your own (by yourself), in spite of just audit solution from notebook or study material. So, Do practice on regular basis. Don't refer to solution from your notebook or any where else.

" Practice does not make perfect. Only perfect practice makes perfect."

e) Consolidated Financial Statement and Amalgamation are definite questions for 16 marks each. (One question will be easy and the other one hard). So, Be Focused on Consolidated Financial Statements, Amalgamation and Restructuring, Share Based Payments, valuations. These chapters together will fetch you at least 48 marks.

f) To Score high in this paper, Keep these points in your mind while preparing for this paper.

1) Use of proper and prescribed format for presentation of accounts. Don’t try to skip, preparation of Balance Sheet in revised schedule format with notes. State currency in subjects such as costing and accounts and draw columns with double lines when time permits

2) Adequate Working Notes in supporting to your answers and State the assumptions clearly

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

4) Go through each and every topic thoroughly and understand conceptual points supporting each topic.

5) Try to solve as many questions as you can and also go through Practice Manual, Revision test papers, Suggested answers, Mock Test papers. (to the extent possible and available).

6) Don’t underweigh topics like Value Added Statements, Human Resource Accounting, Mutual funds, NBFC etc.

7) You should test your preparation by attempting some previous exam paper, revisions test papers, mock test papers under ultimate exam condition or environment. Later on check the result of your effort and make necessary correction/modification to your study preparations.

8)  I personally recommend you to attempt Revision test papers, Suggested answers, Mock test papers at least one in a day. You will find a variety of questions and thus, you will never get disappointed in the exam hall.

9) If you have failed more than three times, I prefer you to replace your all the old books with new books preferably, new authors.

10) Impress the valuator with the Starting answers. It should represent your caliber to give a good answer in all respects: content, neatness and presentation.

"First Impression is The Last Impression"

11) Avoid overwriting. Where they become inevitable, strike off and write again. Clarity is more important than neatness

12) Always leave left hand page for showing workings, assumptions and notes. Workings are a must for the answer to be valid and should be fairly elaborate. Present them parallel to the question concerned. Use last page of the booklet for rough work.

13) If there is a question for which you do know the answer but do not have the time to write it fully, write a synopsis for the answer. This should be done, if required, only at the end of the answer sheet.

14) Provide Total columns where applicable in accounts and costing, Similarly state narrations to journal entries in the case of accountancy.

15) If the balance sheet is not tallying in the case of accounts, apply the principle of double entry by ticking off the entries. Any figure taken from a tallied statement should appear only once, and the rest, twice on opposite sides. Finally check totals. If still they do not tally, write totals as they come and do try to deceive the valuator.

Do not try to deceive the valuator in any subject. They are likely to be smarter than you, in which case the penalty will be high.

16) Try to mange two pens i.e. Blue and Black ink only in exam hall. Use black ink pen only for underling the key words of answers, for making columns and headings.

17) While you write your exams, as a part of strategy, attempt consolidation at the end, after you attempt all the other questions, as consolidation may take around 45-60 minutes. Best suggestion, if you can attempt other questions, then you can leave consolidation as a choice. Most students are not able to clear this paper as they spend too much time attending consolidation and then accuse of lack of time/ or say that paper is long.

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.

You have to complete all the topics in the subject as it is final and no one can predict what will come and what will not. But up to certain extent we can modify our ways of studying and decide what to read on priority basis and what to read at last and achieve the heights of success.

Believe me, if you would study in this way, you would be able to secure good marks in the subject.

Further, if you need any kind of help, please ping me through mail or facebook.

I am working on my next article on Preparation Strategy for SFM, LAW, AUDIT of CA Final Gr-I.


Thanks and Regards
CA Pankaj K Agrawal
Email_id: caagrawalpankaj@gmail.com
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CA Pankaj Kr Agrawal
(@Helping Hand)
Category Exams   Report

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