Summary CIMA F1 Financial Reporting & Taxation: Condensed Revision Notes
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Course
Chartered Institute of Management Accountants
Institution
Chartered Institute Of Management Accountants
CIMA F1 Summary Notes: This condensed guide covers key concepts from the CIMA F1 Financial Reporting and Taxation syllabus, including financial statements, IFRS standards, and taxation principles. It provides clear explanations, crucial formulas, and essential examples to aid in exam preparation. D...
F1 revision
Tax on trading income: Accounting profit – income exempt from tax or taxed under other rules + disallowable
expenses + accounting depreciation – tax depreciation
Capital tax: net proceeds – cost of original asset – cost to buy – enhancement costs – indexation allowance
Corporate governance
Responsibilities of directors
Appropriate composition of the board of directors
Necessity for good internal control
Necessity of an audit committee
Relationships with external auditors
Rules based approach
Clarity in terms of what the entity must do
Standardisation for all companies
Binding requirements
Level playing field
Sanctions is a greater deterrent to transgression
Confidence in regulatory compliance
Loopholes can be found & exploited
No suggestion you should want to play by the rules
Flexibility is lost for companies of varying sizes
Checklist approach
Increased costs for businesses & regulators
Legal costs to close loopholes
No room to improve or go beyond the minimum
Box ticking exercise
Principles approach
Leadership:
Effective board with collective responsibility
clear division of responsibilities between chairman & CEO
no individual possesses unfettered powers of decision
NEDs should constructively challenge & develop proposals on strategy
Effectiveness
Balance of skills, experience & knowledge
Formal, rigorous & transparent procedure for director appointment
Inductions & refreshes for directors’ knowledge & skills
Supplied with quality & timely information
Formal & rigorous annual evaluation
Submitted for re-election at regular intervals
Accountability
Fair & balanced assessment of entity’s position
Board determines nature & extend of risks
Sound risk management
Formal & transparent corporate reporting
Remuneration
Sufficient, but not excessive
Structured to be linked to some corporate & some individual performance
No director involved in their own remuneration
Qualitative characteristics of useful financial info
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