The topics we will discuss to help you revise for your ACCA Financial Reporting (ACCA FR) exam include:

• The core topics of the exam
• How the exam is structured
• The benefits of studying ACCA FR
• Challenges
• Example question and answer
• Additional resources.

The ACCA FR exam is a compulsory unit within the ACCA Applied Skills level and represents a significant milestone in your ACCA journey. It establishes the groundwork for advanced accounting skills crucial throughout your career while effectively bridging the gap between fundamental financial accounting and the more intricate principles encountered in the Strategic Professional level exams.

Mastering the FR unit provides a robust foundation for future careers in audit, industry, or financial consultancy.

What are the exam topics?

The ACCA Financial Reporting (FR) exam builds on the content covered in the ACCA FA module, adding further complexity to topics seen in the FA exam and adding some new ones.

You should expect to build on your prior knowledge of financial reporting in areas like:

• Revenue
• Property, plant, and equipment
• Intangible assets
• Inventory
• Group accounting

You will also learn about some accounting standards you may not have seen before, such as:

• Foreign currency
• Financial instruments
• Earnings per share
• Leases

How is the ACCA FR exam structured?

The ACCA FR exam is marked out of 100 and consists of three sections.

Covering a range of topics, for Section A you should expect each question to be independent from the next.

The three scenarios in Section B will be followed by five objective-test style questions (15 questions in total). The three scenarios will contain the information you need to answer each question.

For Section C, one of your constructed response questions will require the preparation of one or more financial statements for an individual entity or a group. The other question will focus on analysis and interpretation, usually requiring ratio calculations and written analysis.

Section A and Section B question types are limited to question styles such as multiple-choice, selecting an option from a list, and filling in the blanks, Section C will give you a blank canvas. The preparation of financial statements is completed on a spreadsheet, while the interpretation question uses a word-processing area. Both are built into the exam software.

How does the ACCA FR exam subject help my career and/or studies?

Many roles within both practice and industry require a sound knowledge of accounting standards and financial statement preparation, which is exactly what the ACCA FR subject delivers.

If you work in practice, particularly in accounts preparation or in an audit role, you will hugely benefit from this subject as you’ll be able to confidently handle all areas of accounting which you may have previously passed over to someone more experienced.

If you work in industry, the content links directly to any financial accounting roles, including those eyeing up a future financial controller or financial director role. You will also be better equipped to deal with consolidated accounting, making you a more attractive candidate for roles that require this skill.

Common challenges and tips for the ACCA FR exam

Financial statements preparation question

The step-up from the ACCA FA exam can be daunting for some learners. We commonly see this during Section C when you are asked to prepare one or more financial statements from scratch, as it can seem really tough.

The old saying, ‘practice makes perfect,’ is the key here. I advise my learners that by the time they get into the exam, they should be able to draft the headings for each of the financial statements without thinking. You really do find that the format, as well as the adjustments for each scenario, become ‘automatic’ after a while.

I also find that learners who plan for these questions often perform better. Rather than thinking you have 36 minutes to complete a question, try to break it down into stages. For example:

• Five minutes - Read the requirement, draft the statement, and standard workings.
• Five minutes or less - Bring in the numbers from the trial balance in the question.
• Two to three minutes - Scan the adjustments and identify the easiest ones to do first and then leave the harder ones until last.
• Remaining time - Execute your plan.

Taking the above approach can help to ensure that you collect all of the easier marks and you don’t miss out by racing to the trickier parts of the question.

Complex topic areas

Some of the new topic areas can be tricky as a single issue can lead to an adjustment that involves multiple debit and credit record (Dr/Cr) entries all in one go, making it easier to get these incorrect.

Understanding why each part of these adjustments is required really helps. If you understand the ‘why,’ then you’re much more likely to get it right in the exam. You’ll also be able to cope with any unusual context or wording the examiner may put into the exam question on the day.

If you only try to learn the Dr/Cr entries by heart, you may not have a deeper understanding, so you will find it difficult to apply this knowledge and correctly interpret the question on exam day.

A broad syllabus

There’s no hiding it - the ACCA FR subject has a broader syllabus than ACCA FA, and learners can find this to be challenging. Some of the topics have fairly niche rules to them, and learners worry about being caught out by this on exam day.

My recommendation is simple:

1. If you’re confident with the core elements on each topic area, then the few marks available for the ‘fringe’ areas shouldn’t cause you to fail the exam.
2. The best thing you can do is practice questions. The wider the range of questions you’ve seen, the more likely you will be able to handle what the exam throws at you.

Example question and answer: Constructed response questions (Section C)

Focusing on the analysis and interpretation of section C in this exam, my first piece of advice would be to be flexible in your approach, as the question could focus on either individual or consolidated statements. It may also involve cash flow rather than a Statement of Profit or Loss (SPL) or Statement of Financial Position (SFP).

Typically, you will need to calculate some ratios (so knowing the formulae is key), and then write about one or more areas (typically the performance and position of the company, if it’s based around the SPL and SFP).

This may involve a scenario like:

• Comparing the same company over two years (highlighting what has improved or declined).
• Comparing two companies (looking at which is performing better/in a better financial position).
• Cash flows are likely to require an explanation of the key cash inflows/outflows behind an overall increase/decrease in cash.
• A group-based analysis question may require comparison of a group with and without a certain subsidiary.

My advice for these questions would be:

• State the obvious! Plenty of marks are available just for picking out significant movements in the numbers (eg, a significant change in revenue) and justifying it based on the scenario - not all of your points need to be based around the fancy ratios you calculated.
• This being said, ensure you cover all your ratios as well as the key changes in the numbers.
• Format: Be concise and use white space to your advantage:
  • Think ‘one mark per mini-paragraph,’ which may only be a single sentence (eg, a movement/change, and an explanation of why it happened, drawn from the scenario).
  • Leave some white space between each point (insert a line between each) to clearly break up your answer. This will also give you a good idea of how many points you’ve made and how many marks you’re likely to get.
  • Conclude with a brief summary - this may include a recommendation, decision, or overall assessment. Support this with a couple of key points from earlier in your answer.

Additional support and resources

If you’re not already studying ACCA Financial Reporting with us at Kaplan, give yourself the best chance to pass the exam with our ACCA FR course. With four study methods, you’ll find a course that’s perfect for you.

When studying with Kaplan, you will have access to the Academic Support team via the ‘contact a tutor’ option on your MyKaplan. They are available seven days a week and can support you with any tricky topics via live chat, email, or by requesting a call back.

And if you have any additional learning needs, get in touch with our inclusion team, who can support you.

Practising exam-standard questions in timed conditions is essential when preparing for your real exam. Be encouraged to practice questions in the ACCA practice platform when possible.

Alternatively, Kaplan Publishing, an ACCA Content Partner, also offers ACCA Study Texts, Exam Kits, and Pocket Notes - which cover the full syllabus and help you feel exam-confident.