100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary AAT Level 4 - Financial Statements for Limited Companies (FSLC) £5.49   Add to cart
Quickly navigate to
Preview
  2.  
  3. AAT
  4.  
  5. AAT
  6.  
  7. AAT

Summary

Summary AAT Level 4 - Financial Statements for Limited Companies (FSLC)
 19 views  1 purchase
  • Institution
  • AAT

Summary notes for AAT Level 4's exam: Financial Statements for Limited Companies (FSLC) Clear and condensed notes covering each aspect of the exam which were used to pass first time.

Preview 4 out of 39  pages

Document information

  • August 13, 2023
  • 39
  • 2021/2022
  • Summary

Subjects

Written for

All documents for this subject (84)

Seller

avatar-seller
caitlintownsend

Content preview

FSLC‌‌-‌‌Financial‌‌Statements‌‌for‌‌Limited‌‌Companies‌




FSLC‌‌-‌‌Financial‌‌Statements‌‌of‌‌Limited‌‌Companies‌ ‌
Chapter‌‌1‌‌-‌‌Introduction‌‌Limited‌‌Companies‌ 3‌ ‌
Uses‌‌of‌‌Financial‌‌Statements‌ 3‌ ‌
Not-for-profit‌‌Organisations‌ 3‌ ‌
Profit-making‌‌Organisations‌ 3‌ ‌
Incorporated‌‌Entities‌ 4‌ ‌
Profit‌‌or‌‌Loss‌ 4‌ ‌
Statement‌‌of‌‌Financial‌‌Position‌ 5‌ ‌
Equity‌ 6‌ ‌
Liabilities‌ 6‌ ‌
Chapter‌‌2‌‌-‌‌The‌‌Frameworks‌‌and‌‌Ethical‌‌Principles‌ 7‌ ‌
Generally‌‌Accepted‌‌Accounting‌‌Principles‌‌(GAAP)‌ 7‌ ‌
Accounting‌‌Standards‌ 7‌ ‌
National‌‌Company‌‌Law‌ 7‌ ‌
The‌‌Conceptual‌‌Framework‌ 8‌ ‌
Financial‌‌Statement‌‌Elements‌ 9‌ ‌
Ethics‌ 10‌ ‌
AAT‌‌Code‌‌of‌‌Professional‌‌Ethics‌ 10‌ ‌
Chapter‌‌3‌‌-‌‌The‌‌Statement‌‌of‌‌Financial‌‌Position‌ 11‌ ‌
IAS‌‌1‌‌-‌‌Presentation‌‌of‌‌Financial‌‌Statements‌ 11‌ ‌
Accounting‌‌Principles‌ 11‌ ‌
Statement‌‌of‌‌Financial‌‌Position‌ 12‌ ‌
Accounting‌‌Adjustments‌ 13‌ ‌
Chapter‌‌4‌‌-‌‌The‌‌Statement‌‌of‌‌Financial‌‌Performance‌ 13‌ ‌
P&L‌‌or‌‌OCI‌ 13‌ ‌
Statement‌‌of‌‌changes‌‌in‌‌equity‌ 14‌ ‌
Notes‌‌to‌‌the‌‌Financial‌‌Statements‌ 14‌ ‌
Chapter‌‌5‌‌-‌‌The‌‌Statement‌‌of‌‌Cash‌‌Flows‌ 15‌ ‌
Indirect‌‌Method‌ 15‌ ‌
Direct‌‌Method‌ 16‌ ‌
Uses‌ 17‌ ‌
Interpreting‌‌Cash‌‌Flows‌ 17‌ ‌
Chapter‌‌6‌‌-‌‌Property,‌‌Plant,‌‌and‌‌Equipment‌ 18‌ ‌
IAS‌‌16‌‌-‌‌Property,‌‌Plant,‌‌and‌‌Equipment‌ 18‌ ‌
Initial‌‌Measurement‌ 18‌ ‌
Measurement‌‌after‌‌recognition‌ 19‌ ‌
Depreciation‌ 20‌ ‌
Derecognition‌ 20‌ ‌
Note‌‌to‌‌the‌‌financial‌‌statements‌ 20‌ ‌
Chapter‌‌7‌‌-‌‌Intangible‌‌assets‌‌and‌‌inventories‌ 20‌ ‌


1‌ ‌

, FSLC‌‌-‌‌Financial‌‌Statements‌‌for‌‌Limited‌‌Companies‌


IAS‌‌38‌‌-‌‌Intangible‌‌Assets‌ 20‌ ‌
IAS‌‌36‌‌-‌‌Impairment‌‌of‌‌Assets‌ 22‌ ‌
IAS‌‌2‌‌-‌‌Inventories‌ 22‌ ‌
Chapter‌‌8‌‌-‌‌Further‌‌Accounting‌‌Standards‌ 23‌ ‌
IAS‌‌12‌‌-‌‌Income‌‌Taxes‌ 23‌ ‌
IFRS‌‌16‌‌-‌‌Leases‌ 24‌ ‌
IAS‌‌37‌‌-‌‌Provisions,‌‌Contingent‌‌Liabilities,‌‌and‌‌Contingent‌‌Assets‌ 25‌ ‌
IAS‌‌10‌‌-‌‌Events‌‌after‌‌the‌‌reporting‌‌period‌ 26‌ ‌
IFRS‌‌15‌‌-‌‌Revenue‌ 27‌ ‌
Chapter‌‌9‌‌-‌‌Group‌‌Accounts:‌‌Consolidation‌‌of‌‌SOFP‌ 28‌ ‌
Parent’s‌‌Separate‌‌Financial‌‌Statements‌ 28‌ ‌
Group‌‌Financial‌‌Statements‌ 28‌ ‌
Pre/Post-acquisition‌‌Reserves‌ 29‌ ‌
Goodwill‌ 29‌ ‌
Non-Controlling‌‌Interests‌‌(NCI)‌ 29‌ ‌
Intra-group‌‌Adjustments‌ 30‌ ‌
Fair‌‌Value‌‌Adjustments‌ 30‌ ‌
Chapter‌‌10‌‌-‌‌Group‌‌Accounts:‌‌Further‌‌Aspects‌ 31‌ ‌
Consolidated‌‌Statement‌‌of‌‌Profit‌‌or‌‌Loss‌ 31‌ ‌
Intra-Group‌‌Adjustments‌ 31‌ ‌
Chapter‌‌11‌‌-‌‌Interpreting‌‌Financial‌‌Statements‌‌326‌ 31‌ ‌
Purpose‌‌of‌‌Interpreting‌‌Ratios‌‌in‌‌a‌‌Business‌‌Environment‌ 31‌ ‌
Ratio‌‌Analysis‌ 32‌ ‌
Profitability‌ 33‌ ‌
Liquidity‌‌Ratios‌ 33‌ ‌
Use‌‌of‌‌Resources‌ 34‌ ‌
Financial‌‌Position‌ 35‌ ‌
Assessments‌ 35‌ ‌
‌
‌
‌
‌
‌
‌
‌
‌
‌
‌
‌
‌
‌
‌




2‌ ‌

, FSLC‌‌-‌‌Financial‌‌Statements‌‌for‌‌Limited‌‌Companies‌




Chapter‌‌1‌‌-‌‌Introduction‌‌Limited‌‌Companies‌ ‌

Uses‌‌of‌‌Financial‌‌Statements‌ ‌
- Inform‌‌users‌‌of‌‌the‌‌company’s‌‌financial‌‌position‌‌(SOFP)‌ ‌
- Inform‌‌users‌‌of‌‌the‌‌company’s‌‌performance‌‌(SPL)‌ ‌
- Inform‌‌users‌‌of‌‌changes‌‌in‌‌the‌‌company’s‌‌financial‌‌position‌‌(cash‌‌flow)‌ ‌
- Enable‌‌users‌‌to‌‌make‌‌economic‌‌decisions,‌‌e.g‌‌investing‌ ‌
- To‌‌assess‌‌management‌‌stewardship‌ ‌
- Stewardship‌‌=‌‌the‌‌accountability‌‌of‌‌management‌‌for‌‌the‌‌resources‌‌entrusted‌‌
to‌‌them‌‌by‌‌the‌‌owners‌‌of‌‌the‌‌entity‌ ‌

Not-for-profit‌‌Organisations‌ ‌
- Types‌ ‌
- Charities,‌‌clubs‌‌and‌‌societies‌‌=‌‌owned‌‌by‌‌member‌‌or‌‌trustees,‌‌created‌‌for‌‌a‌‌
specific‌‌non-commercial‌‌purpose‌ ‌
- Public‌‌Sector‌‌Organisations‌‌=‌‌owned‌‌by‌‌the‌‌general‌‌public‌ ‌
- Chief‌‌Characteristics‌ ‌
- Quality‌‌is‌‌more‌‌important‌‌than‌‌profit‌‌ ‌
- Efficiency‌‌of‌‌resources‌‌is‌‌important‌ ‌
- Focus‌‌is‌‌on‌‌small‌‌profits‌‌or‌‌breakeven‌ ‌
- Need‌‌to‌‌satisfy‌‌a‌‌lot‌‌of‌‌stakeholders‌ ‌
- Compare‌‌performance‌‌against‌‌budgets‌ ‌
- Use‌‌Key‌‌Performance‌‌Indicators‌‌(KPIs)‌ ‌
- Length‌‌of‌‌waiting‌‌lists‌ ‌
- Amount‌‌of‌‌aid‌‌provided‌ ‌
- Amount‌‌of‌‌donations‌‌spent‌‌on‌‌aid‌ ‌
- The‌‌Three‌‌E’s‌ ‌
- Economy‌‌=‌‌business‌‌conducted‌‌with‌‌the‌‌least‌‌expenditure‌‌of‌‌money,‌‌
manpower‌‌or‌‌other‌‌resources‌ ‌
- Efficiency‌‌=‌‌resources‌‌are‌‌used‌‌in‌‌the‌‌most‌‌advantageous‌‌way‌ ‌
- Effectiveness‌‌=‌‌policy‌‌objectives‌‌or‌‌other‌‌intended‌‌effects‌‌are‌‌achieve‌ ‌

Profit-making‌‌Organisations‌ ‌
- Types‌ ‌
- Sole-traders‌‌=‌‌owned‌‌and‌‌managed‌‌by‌‌one‌‌person‌ ‌
- Partnerships‌‌=‌‌owned‌‌and‌‌managed‌‌by‌‌two‌‌or‌‌more‌‌people‌ ‌
- Companies‌‌=‌‌a‌‌separate‌‌legal‌‌entity‌‌from‌‌its‌‌owners‌ ‌
- See‌‌previous‌‌exam‌‌notes‌‌for‌‌more‌‌information‌‌on‌‌sole-traders‌‌and‌‌partnerships‌ ‌
- Unincorporated‌‌=‌‌no‌‌legal‌‌distinction‌‌between‌‌the‌‌business‌‌and‌‌its‌‌owners‌ ‌
- The‌‌owners‌‌have‌‌unlimited‌‌liability‌ ‌
- Tax‌‌does‌‌not‌‌appear‌‌in‌‌the‌‌accounts‌‌as‌‌owners‌‌are‌‌taxed‌‌personally‌ ‌




3‌ ‌

, FSLC‌‌-‌‌Financial‌‌Statements‌‌for‌‌Limited‌‌Companies‌



Incorporated‌‌Entities‌ ‌
- Incorporated‌‌=‌‌legal‌‌distinction‌‌between‌‌the‌‌business‌‌and‌‌its‌‌owners‌ ‌
- Enter‌‌into‌‌contracts,‌‌acquire‌‌assets‌‌and‌‌incur‌‌liabilities‌‌in‌‌its‌‌own‌‌right‌ ‌
- Owners‌‌have‌‌limited‌‌liability‌‌=‌‌can‌‌only‌‌lose‌‌the‌‌amount‌‌they‌‌invested‌ ‌
- The‌‌owners‌‌are‌‌called‌‌shareholders‌ ‌
- Types‌‌ ‌
- Public‌‌Limited‌‌Companies‌‌=‌‌may‌‌raise‌‌capital‌‌from‌‌the‌‌public‌ ‌
- Private‌‌Limited‌‌Companies‌‌=‌‌can’t‌‌invite‌‌the‌‌general‌‌public‌‌to‌‌invest‌ ‌
- Advantages‌‌ ‌
- Limited‌‌liability‌ ‌
- Easier‌‌to‌‌raise‌‌finance,‌‌more‌‌shareholders‌‌and‌‌less‌‌risky‌‌so‌‌more‌‌attractive‌ ‌
- Continues‌‌to‌‌operate‌‌even‌‌if‌‌ownership‌‌changes‌ ‌
- Taxed‌‌as‌‌separate‌‌entity,‌‌its‌‌shown‌‌in‌‌the‌‌accounts‌ ‌
- People‌ ‌
- Shareholders‌‌=‌‌classed‌‌as‌‌the‌‌owners‌‌when‌‌they‌‌invest‌‌in‌‌the‌‌business‌ ‌
- Stakeholders‌‌=‌‌those‌‌who‌‌have‌‌an‌‌interest‌‌in‌‌the‌‌business‌ ‌
- Directors‌‌=‌‌appointed‌‌to‌‌manage‌‌a‌‌company‌‌on‌‌behalf‌‌of‌‌the‌‌owners‌ ‌
- Financial‌‌Statements‌‌enable‌‌shareholders‌‌to‌‌assess‌‌the‌‌way‌‌in‌‌which‌‌the‌‌directors‌‌
are‌‌safeguarding‌‌the‌‌assets‌ ‌

Profit‌‌or‌‌Loss‌ ‌

‌ 20X2‌ ‌ 20X1‌ ‌

Revenue‌ ‌ X‌ ‌ X‌ ‌

Cost‌‌of‌‌Sales‌ ‌ (X)‌ ‌ (X)‌ ‌

Gross‌‌Profit‌ ‌ X‌ ‌ X‌ ‌

Distribution‌‌Costs‌ ‌ (X)‌ ‌ (X)‌ ‌

Administrative‌‌Expenses‌ ‌ (X)‌ ‌ (X)‌ ‌

Profit‌‌from‌‌Operations‌ ‌ X‌ ‌ X‌ ‌

Finance‌‌Costs‌ ‌ (X)‌ ‌ (X)‌ ‌

Profit‌‌Before‌‌Tax‌ ‌ X‌ ‌ X‌ ‌

Tax‌ ‌ (X)‌ ‌ (X)‌ ‌

Profit‌‌for‌‌the‌‌year‌ ‌ X‌ ‌ X‌ ‌


‌
‌
‌




4‌ ‌

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller caitlintownsend. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £5.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

79271 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£5.49  1x  sold
  • (0)
  Add to cart